Arizona leads nation in built-to-rent construction

Arizona continues to lead the nation in built-to-rent home construction, with the vast majority of planned units popping up in the Valley.

Driving the news: There are 2,011 built-to-rent homes planned or under construction per million residents statewide, the National Rental Home Council counts.

• Nationwide, the average is 345.

Why it matters: Built-to-rent housing offers a new home with property management perks but without the need for a down payment or long-term commitment, Axios' Felix Salmon reports.

Between the lines: Colliers researcher Thomas Brophy told Axios Phoenix this type of housing is particularly appealing to people who've lived in an apartment for 10-plus years and are looking to start a family.

• Many people at this stage can't yet afford a single-family home in the Valley — especially as increased interest rates have spiked monthly payments.
• The rent in one of these housing developments is typically $1,500 less per month than the average single-family home's monthly mortgage payment, Brophy told us.

Driving the news: Phoenix tripled its number of single-family homes for rent between 2018 and 2022, per a recent report from listing service RentCafe.

• That means 6,000 of the 8,200 built-to-rent units in the Valley came on the market in the last five years.

Flashback: Single-family rentals are nothing new. Like multi-family housing, the built-to-rent market has developed over many decades, per commercial real estate company CBRE.

• Yes, but: Built-to-rent properties took off in Phoenix in 2016 when big home builders saw the potential to pull younger families into their communities with a rental product. Their goal was to eventually sell these renters a home in the same neighborhood when they could afford it, Brophy said.

Reality check: Single-family rentals are an important option for many Arizona families, but they aren't going to solve our housing supply crisis.

• And even though we're leading nationally on new unit construction, we still need to build more single- and multi-family homes faster if we want to get a handle on our affordability challenge, Brophy said.