Metro Phoenix Is Sprouting the Most Build-To-Rent Communities. Here’s Why

Thousands of new homes have gone up in metro Phoenix during the past few years that homebuyers can’t purchase.

But the new houses are for rent, and many people are opting for them over apartments.

Called single-family rentals, the Valley is considered “the birthplace” of houses that typically are just like homes built to sell. More houses are under construction in the Phoenix area than anywhere else in the U.S., and more have been built.

And the houses that rent for more than the typical apartment are drawing different tenants than apartments.

“It’s simplified living,” said Phil DiMartino, who moved from Southern California to a one-bedroom in the build-to-rent community called The Village at Camelback Park in west Phoenix last October. “It has a neighborhood feel that you don’t get when you rent an apartment.”

He worked at movie and TV studios in the Los Angeles area but was injured and moved to Phoenix to be closer to his daughter, who is attending Arizona State University.

Most single-family rental communities are gated and have security cameras, detached homes, community centers and small yards for each rental.

“Phoenix is really the birthplace for build-to-rent homes,” said Trevor Koskovich, president of commercial real estate and research firm Northmarq. “Why Phoenix? Affordable land.”

Also, the area’s growth in residents means more renters. That demand has drawn more developers to build-to-rent projects, including big home builders that typically sell houses to buyers.

What’s behind the boom in build-to-rent houses?

More than 8,000 build-to-rent houses are under construction in the Phoenix area now. That’s more than any other city, according to Northmarq.

Dallas, Houston, Atlanta and Charlotte are the other U.S. cities ranking for the most construction of rental houses.

The Valley now has more than 17,000 single-family rentals in 100 developments.

The homes go up within bigger planned communities as well as on their own land with no other developments.

The Valley’s median rent for single-family rental houses is $2,435, according to real estate research firm CoreLogic.

The median apartment rent in metro Phoenix is $1,670, according to real estate data provider Yardi Matrix.

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