A SPATIAL ANALYSIS OF INVESTOR-OWNED SINGLE-FAMILY RENTALS IN PHOENIX

Abstract

The City of Phoenix is the fifth most populous city in the United States as well as one of the fastest growing. According to the Census Bureau, from 2010 to 2020 Phoenix grew by 11.2% from a population of 1.4 million to 1.6 million. While it has long been characterized as a relatively affordable place to live which offered a high standard of living, the combination of a serious decline in the production of new housing units and the influx of new residents has greatly impacted housing opportunity and affordability. As of February 2022, Phoenix has seen the highest housing price increases in the country with a 33% year-over-year price increase compared to the national average of 19.8%. Phoenix's land use is dominated by suburban sprawl and single-family housing stock and was hit especially hard during the Great Recession. This created a real estate market attractive to large institutional investors aiming to purchase single-family homes as rental units. These investors often outcompete typical homebuyers with cash offers and aggressive outreach to potential sellers who have not yet entered the market. This study aims to analyze the spatial pattern of investor-owned single-family homes and compare the socioeconomic, racial, and ethnic composition of the neighborhoods where they are found. Using data from the Maricopa County Assessor's Office, the City of Phoenix, and the US Census Bureau; a methodology was established to identify investor-owned single-family rentals which were then plotted against the characteristics of the neighborhoods in which they were located. Understanding the impact these investor-owned properties have on the City’s housing stock can help better shape housing policy at the local and regional levels.