By Matthew Holloway |
A new report examining corporate ownership of Phoenix-area housing calls for restrictions on institutional homebuyers, expanded financing for local builders, and changes to federal tax policy. The report also endorses an Arizona proposal from Republican state Rep. Nick Kupper (R-LD25).
The American Economic Liberties Project’s September case study, authored by Laurel Kilgour and Allie Gross, argues that consolidation in banking and homebuilding, purchases of foreclosed properties, and the expansion of build-to-rent communities have contributed to difficulties facing prospective homeowners.
The nonprofit, which advocates against concentrated corporate power, acknowledges that institutional investors did not create the housing supply shortage. Its report contends that investors capitalized on that shortage while changes in financing weakened smaller builders’ ability to compete.
The report’s focus on construction shortfalls follows earlier research covered by AZ Free News in May. The Common Sense Institute identified prolonged underbuilding after the Great Recession as a principal driver of Arizona’s housing shortage, citing annual housing permits that fell from nearly 90,000 in 2005 to approximately 12,600 in 2010 and recovered to about 45,000 by 2019. That study examined short-term rentals such as Airbnb and found no consistent statistical relationship between their growth and home-price appreciation across Arizona communities.
Phoenix has gained prominence in the institutional rental market in recent years, appearing in Urban Institute research published in 2023. Using 2022 property records, researchers identified 33,406 single-family rental properties held by “mega” rental operators in the Phoenix-Mesa-Chandler metropolitan area, second to Atlanta among the markets examined. The study defined those operators as investors owning more than 1,000 properties across multiple locations. However, the Urban Institute also cautioned that its data should be treated as a sample and that smaller institutional investors were incompletely captured.
A 2024 Government Accountability Office (GAO) review found that institutional investors may have contributed to increases in home prices and rents while helping stabilize neighborhoods after the financial crisis. The GAO said their effects on homeownership opportunities and tenants were less clear because of limited data and inconsistent definitions of institutional investors.
The new Phoenix report also examines build-to-rent developments, where homes are constructed for rental occupancy. Its recommendations include phased sales of institutional holdings, giving prospective owner-occupants and nonprofits an initial opportunity to purchase foreclosed homes, and reducing tax incentives for institutional rental ownership. The authors also recommend financing programs for local homebuilders and taxes intended to discourage holding undeveloped land.
In Arizona, the report endorses Kupper’s House Bill 2325, introduced in January as the “Own Something and Be Happy Act.”
The introduced legislation would prohibit covered institutional investors from owning more than 50 single-family homes statewide, bidding during the first 60 days a home is publicly offered for sale, or making bulk purchases. Investors already exceeding the ownership limit would be barred from additional acquisitions and could voluntarily sell properties to comply.
The bill includes exemptions for affordable housing nonprofits, government housing agencies, community land trusts, qualifying homebuilders, and people or entities owning fewer than 50 single-family homes in Arizona. It would also require annual ownership disclosures to the Arizona Department of Housing. The proposed enforcement provisions would allow local prosecutors to act when the attorney general declines enforcement in a particular matter.
“When large investment firms buy up neighborhoods, families lose and prices climb,” Kupper said.
HB 2325 did not receive a hearing in the House Commerce Committee.
At the federal level, the 21st Century ROAD to Housing Act, enacted July 11, includes restrictions on additional single-family home purchases by large institutional investors. Its definition generally covers qualifying investment entities controlling at least 350 homes, subject to exclusions.
The federal purchase restrictions take effect 180 days after enactment. The law includes exceptions for qualifying build-to-rent purchases and other transactions, and it does not require investors to sell homes purchased before enactment.
Arizona’s House delegation split 5–3 on the final version in the June 23 vote. Reps. David Schweikert (R-AZ01), Eli Crane (R-AZ02), and Andy Biggs (R-AZ05) voted against it. Reps. Juan Ciscomani (R-AZ06) and Abraham Hamadeh (R-AZ08) joined Reps. Yassamin Ansari (D-AZ03), Greg Stanton (D-AZ04), and Adelita Grijalva (D-AZ07) in support. Rep. Paul Gosar (R-AZ09) did not vote. Sens. Mark Kelly (D-AZ) and Ruben Gallego (D-AZ) both supported the final Senate version in the June 22 vote.
President Donald Trump said that he would withhold his signature in protest over the Senate’s failure to pass the SAVE America Act, which would require documentary proof of citizenship for voter registration and photo identification for voting. The housing legislation became law July 11 without his signature, following the constitutional review period of 10 days, excluding Sundays, without a veto.
Matthew Holloway is a senior reporter for AZ Free News. Follow him on X for his latest stories, or email tips to Matthew@azfreenews.com.
