A Phoenix Biz Journal article by Kristena Hansen yesterday sheds some light on a growing trend of institutional investment in single-family homes.
Hansen cites statistics that show institutions and landlords that own more than ten homes each were involved in 15 percent of June 2013 home sales in Arizona…approaching double the national average.
A single equity firm owns 4,400 single-family rental homes in the Valley.
This is frightening to me for four reasons:
- Renters are by definition less invested in the community, and generally less interested in the long-term quality of life.
- Out-of-state landlords–especially corporate landlords–look at such transaction as business deals, not investments in the economic sustainability of the community.
- Institutional investors are largely interested in quarterly or annual profits, and/or short-games from flipping their investments; which could hasten another housing bubble.
- Scottsdale Mayor Jim Lane and the City Council have approved tens of thousands of new apartment units in the past couple of years. Excessive supply (which is not in accordance with Scottsdale’s General Plan) will contribute not only to declining rents, but also to owner-occupied home values.