That run-down strip mall down the street? Imagine new condos or apartments.The set of empty lots in the middle of an established neighborhood? Think of them filled with as many small homes with no yards as a developer could cram onto the space.Those and a series of other proposals designed to address Arizona’s housing shortage by limiting city zoning rules are making their way through the Legislature this year.
And unlike previous years — when cities succeeded in holding back efforts to strip them of their power over zoning, planning and even home design standards — many appear to have bipartisan backing and could very well make their way to Gov. Katie Hobbs’ desk.Many Democrats and Republicans agree they need to do something. They argue the state is short more than 270,000 homes and the shortage has contributed to big increases in home prices and rents.The housing shortage developed in the past several years as a growing population collided with a decade of lower-than-normal new home construction.That came in part because developers were gun-shy after the Great Recession that hit in 2008 led to a mortgage crisis that left metro Phoenix with the nation’s highest number of foreclosures.Adding to that mix was a lack of available land for new homes, investors snapping up homes to turn into long- or short-term rentals and shortages of workers and materials.Soaring rents and home prices, on top of interest rate increases, added to the affordability problem.Enter home builders and apartment developers, who through their lobbying associations tried to push through a massive overhaul last year that stripped cities and towns of much of their zoning power, all in the name of boosting supply.But the group that represents cities and towns, backed by residents of established neighborhoods and others who leaned on their legislators to oppose the measure, succeeded in holding it off.This year, separate bills together address all the issues that had been packed into last year’s legislation and other proposals.Topping the list is a bill backed by Republican House and Senate leaders called the Arizona Starter Home Act.It would ban cities from requiring costly neighborhood amenities and homeowners’ associations that levy fees to maintain them, a bar on city design standards and, most importantly, a prohibition on cities requiring minimum lot sizes or rules setting how close homes could be built to each other, called setbacks. It’s being pushed by homebuilders.Opponents note nothing in the proposal actually requires any of the resulting new homes to be small and affordable and argue it could change the character of existing neighborhoods.Another major proposal would give developers the right to convert any commercial property in the state to home or apartment sites.Other ideas which have picked up some support among Democrats would allow backyard casitas, place limits on requirements for parking spaces and allow duplexes, triplexes and fourplexes in many areas.House Majority Leader Leo Biasiucci told lawmakers that the measure remains a work in progress.“If there are things we need to fix and tweak and get better, that’s how good policy gets through this chamber and signed by the governor,’’ Biasiucci told the House Commerce Committee on Jan. 30 before it passed on an 8-1 vote. The Senate version advanced on a 5-2 vote.Biasiucci said he was tired of hearing from business owners who lost workers because they couldn’t find a place to live that they could afford.At the same hearing, Democrats lined up behind the plan.“We have to do something,’’ Mesa Democrat Lorena Austin said.
“I’m so confident that this is not going to pass as is,’’ Austin continued. “Everyone on this committee knows that. There’s going to be conversations and different iterations on this bill.’’The measures are opposed by some members of both parties, and by many cities, represented by the League of Arizona Cities and Towns.Nick Ponder, a lobbyist for Phoenix and Tucson, told lawmakers they were buying into a myth when homebuilders told them they didn’t have enough land to build on.“Currently, just in this county alone, there are 275,000 units in the pipeline,” he said, “and 106,000 of those units already have permits and could be built today.’’Those include nearly 61,000 permitted single-family homes throughout the area, including in Phoenix.This year’s push to overhaul city zoning rules has a different tenor than previous efforts because of what appears to be a broad undercurrent of support from lawmakers.But opposition remains.Sen. John Kavanagh, a Fountain Hills Republican who opposed last year’s zoning overhaul effort and said it amounted to “kneecapping” cities, said he is less hopeful this year’s proposals can be held back.“The problem is the Democrats, who traditionally respected local zoning, are now worshipping a new sacred cow called affordable housing,’’ said Kavanagh who used to be on the Fountain Hills town council and whose wife was once town mayor. “Even though the housing that comes out of these things is usually not affordable.’’Rep. Analise Ortiz, D-Phoenix, told Capitol Media Services, “Everyone kind of agreed that we do need a statewide approach to roll back some of the most onerous zoning regulations that are holding up development of not only multifamily housing but also smaller starter homes.”She said the question was how to do that in a bipartisan way that does not completely remove local control and does not abolish single-family zoning.Still, lobbyists for cities pointed at a myriad of issues they have with the major proposals.For instance, the bill that gives developers the right to convert any commercial-zones property into homes or apartments could force cities to pay landowners if the Legislature later changes the law because too much commercial property has been converted or other reasons.And cities and some lawmakers also oppose many aspects of the starter home bills, HB 2570 and SB 1112. They say many residents of established neighborhoods are worried the character of their community could be changed by cramming in small houses.“In an Arizona where House Bill 2570 becomes law, neighborhoods would become checkerboards of ranch homes, sleek, contemporary modern structures, red castles and tiny homes,’’ Rep. Matt Gress, R-Phoenix, said at the recent hearing where his was the lone ‘no’ vote.He said limits on HOA-funded amenities and a push to cut developer fees would cause city taxes to skyrocket.Gress is sponsoring a measure that would require cities to do housing needs assessments and to cut the time it takes to approve zoning change applications to six months.Packing more homes and apartments into already developed cities is a major part of all the overhauls, and is needed, according to Elliott Pollack, an economist who has studied the region’s real estate for decades.But Pollack added, “There are some things that government should protect. You certainly have to have cities develop the ambiance that they want.’’Yet, he also said, cities have to take into account that there can be higher density.A study Pollack did in 2022 for a group he helped found called Home Arizona determined that Arizona needs about 35,000 new homes and apartments each year just to handle population growth. And to make up for the housing shortage, another 7,000 new homes and apartments are needed in each of the next five years, bringing the total to 42,000 a year.In 2022, the most recent year completion figures were available from the Maricopa County on its home completions, just over 31,000 were finished, fewer than before the Great Recession.
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