No where in the country has the expansion of build-to-rent communities happened faster than in Arizona.
The explosion of single-family homes designed and built for renting instead of buying comes as older people look to downsize their living spaces and younger people seek budget-conscious options to fit growing families.
Higher interest rates and home prices that refuse to drop have led many Arizonans to remain renters. So the nascent built-to-rent industry stepped in to provide a product that resembles a single-family home yet operates like an apartment.
“They are really an extension of the multihousing industry,” said Chris Nebenzahl, the vice president of rental research at John Burns Research and Consulting. “Phoenix is one of the first markets with build-to-rent. You saw incredible growth from 2016 on, especially after the pandemic.”
About 80,000 build-to-rent units were added in 2023 alone. But in 2024 and 2025, as financing grew tighter, the pace fell to about 30,000 annually/
What Are Build-To-Rent Communities?
Build-to-rent communities feature single-story structures, small yards, low maintenance and community amenities with the look and feel of a single-family neighborhood.
The Sun Belt remains attractive for this type of housing, especially in Arizona.
One of the main attractions is not needing to obtain a 100-year certificate of water assuredness. Developers of single-family home communities in the Phoenix and Tucson metro areas must prove access to 100 years’ worth of water.
But rental developments, such as apartment complexes and build-to-rent units, don’t face that requirement. That makes this new housing product attractive to developers who have been shut out of the housing market on the outskirts of the Phoenix metropolitan area.
Housing That Appeals Across Generations
BTR communities are akin to apartment complexes and that makes them a popular product, Nebenzahl said.
It’s a horizontal multifamily development,” he said. “What we saw was that Baby Boomers wanted to downsize, but they still wanted a 2-3 bedroom house, a dining room. And Millennials wanted more space. Phoenix has been one of the Millennial migration hotspots.”
Industry Concerned About New Legislation In Congress
However, recent legislation has posed an existential threat to the industry.
Congress is considering a monumental bill called the 21st Century ROAD to Housing Act.
One provision would limit institutional investors like build-to-rent developers to owning fewer than 350 properties at a time.
Although the legislation seeks to make homebuying more affordable for Americans, Nebenzahl warned that this provision could be the death knell for the build-to-rent industry. And in fact, financing is already drying up in this space.
“That would greatly reduce the interest of developers and investors for BTR,” he said.
