Phoenix is the epicenter of institutional landlords, new study shows
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The Valley is one of the biggest markets for institutional investment landlords — that is, professional investors managing huge pots of money who buy up single-family homes, per a new study.
Why it matters: Housing affordability in the Phoenix area is already a problem, and the prevalence of corporate landlords makes it only harder for the average resident to afford a home.
- Phoenix has been transformed "from a place where ordinary families have a shot at owning a home to one where they are more likely to become permanent corporate tenants," says the study, released Wednesday by the nonprofit American Economic Liberties Project (AELP).
By the numbers: In 2022, institutional investors owned more than 38,000 single-family properties in Phoenix, second only to Atlanta.
- As of 2024, they owned about 13-14% of the Valley's single-family rental market — between 33,000 and 72,000 homes.
- Mesa's 85209 ZIP code has 3,251 investor-owned properties, the most in the Valley.
Flashback: Phoenix "was part of the rise of this business model from the beginning," says study author and AELP research manager Laurel Kilgour.
- As big banks and big homebuilders edged out more locally focused counterparts, investors could snap up properties and sit on them for years.
- In 2012, Invitation Homes purchased its first single-family rentals in Phoenix. A year later, in a first for Wall Street, it securitized a batch of properties, allowing investors to buy and sell shares in it as a financial product.
- At one point during the height of the COVID-19 pandemic, the study says, institutional investors bought "up to 31%" of Arizona single-family rentals, "the second-highest share in the nation."
The intrigue: A more recent phenomenon involves build-to-rent properties, particularly whole housing developments not intended for purchase at all.
- More than 25,000 build-to-rent units came online in the Valley over the past five years, the most in the nation.
State of play: The study recommends several measures to rein in institutional investors, which have attracted the attention of President Trump.
- Earlier this year, Congress passed the ROAD to Housing Act, capping the number of single-family homes investors could own at 350. (It became law without Trump's signature.)
- AELP also suggests nixing tax breaks that allow investors to sit on properties and barring investors from bidding on them immediately after they hit the market.
Zoom in: The study explicitly endorses GOP state Rep. Nick Kupper's "Own Something and Be Happy Act," which would limit institutional investors in the state to 50 single-family properties and bar them from bidding on newly listed homes for 60 days.
- The bill never got a vote during the last session, but Kupper tells Axios that he's "encouraged to see people on both sides of the aisle embracing the concept of real ownership rather than a society that subsists off Big Brother."
Yes, but: Institutional investors are only "an aggravator of the crisis we have right now," says Arizona Housing Coalition executive director Nicole Newhouse.
- "The problem now is there is very little in the way of stock that's affordable for most Arizonans," Newhouse says. "The problem isn't that it's built to rent. It's just: Is it affordable?"