Phoenix Report Targets Corporate Homebuyers
Institutional investors hold 33,406 single-family rentals in the Phoenix metro area, a figure second only to Atlanta. This consolidation has intensified housing costs for local buyers.
The American Economic Liberties Project released a new report on September 30. It calls for strict limits on institutional homebuyers in the Phoenix area. The document supports a pending Arizona state bill aimed at curbing corporate land grabs.
Urban Institute data from 2022 identified 33,406 single-family rental properties in the region. These assets are held by operators with more than 1,000 units. The report argues this consolidation weakens local builders and inflates prices.
Legislative Proposal Caps Ownership
Representative Nick Kupper introduced House Bill 2325 in January. The measure prohibits covered investors from owning more than 50 single-family homes statewide. It also bans bulk purchases and bidding during the first 60 days of a sale.
Investors exceeding the limit cannot acquire additional properties. They may voluntarily sell units to comply with the cap. The bill requires annual ownership disclosures to the Arizona Department of Housing.
Exemptions apply to affordable housing nonprofits and community land trusts. Entities owning fewer than 50 homes are also excluded from the restrictions. Local prosecutors can enforce the law if the attorney general declines to act.
Supply Shortage Drives Demand
The report acknowledges that investors did not create the housing shortage. It states they capitalized on existing deficits in construction. Financing changes have reduced the ability of smaller builders to compete.
Annual housing permits in Arizona fell from nearly 90,000 in 2005 to 12,600 in 2010. They recovered to about 45,000 by 2019. This prolonged underbuilding remains a primary driver of market tightness.
Recommendations Target Tax Policy
The authors propose phased sales of institutional holdings. They suggest giving prospective owner-occupants first right to purchase foreclosed homes. Reducing tax incentives for institutional rental ownership is also a key recommendation.
Financing programs for local homebuilders are part of the strategy. Taxes on undeveloped land aim to discourage speculative holding. GN auto markets/housing: rental market notes these measures seek to balance supply and demand.
