After a major bipartisan housing legislation package fell through in the 2023 legislative session, affordable housing advocates were hoping the 2024 session would prove different.
While there are some affordable housing measures signed by the governor, stakeholders say there’s still much work to be done.
Gov. Katie Hobbs signed three major housing bills during the recent legislative session, including HB2297, HB2720 and HB2721, which relate to commercial adaptive reuse, accessory dwelling units and middle housing, respectively.
“I was born and raised in an Arizona where a middle-class family could buy their own home,” Hobbs said in a statement during the legislative session of the housing bills. “In the past year alone we have made dramatic strides towards making that the reality again for the next generation.”
HB2297 will require major cities to establish objective standards that allow up to 10% of existing vacant commercial, office or mixed use buildings be reused for multifamily residential development while skipping traditional public hearing processes to rezone.
HB2720 requires cities to also allow homeowners to build accessory dwelling units, or “casitas,” on their residential lots.
Mesa Mayor
John Giles said he wasn’t sure how much of an impact those bills would have in creating opportunities for people to obtain affordable homes, but was much more optimistic about HB2721, which will require municipalities to allow the development of middle housing options near downtown areas, including duplexes, triplexes, fourplexes and townhomes.
“Cities are thrilled,” Giles said. “We want to approve fourplexes and fiveplexes particularly in urban areas where multifamily housing is absolutely what we favor.”
While Giles said cities have supported the idea of accessory dwelling units, the League of Arizona Cities and Towns opposed HB2720 out of concerns that property owners would use their attached units as short-term rental units.
Rep. Analise Ortiz, D-Phoenix, said she thought it was incredibly important for Hobbs to sign the casitas bill despite the league’s opposition, which she said was an attempt to create a “manufactured outrage” over the bill.
“Short-term rentals make up a really small percentage of the housing stock. While it is a problem and it can decimate certain cities, it is not the key to solving the housing affordability crisis,” Ortiz said.
Giles said short-term rentals and affordability are two separate issues, but he saw the casitas bill as a victory for the vacation lodging industry rather than for affordable housing.
While the bills signed in 2024 make strides to address affordable housing, Ortiz, Giles and other stakeholders say there’s much more work that needs to be done.
Republican consultant Chuck Coughlin said he thought the housing bills were “fairly worthless.”
“I think (Department of Housing Director) Joan Serviss is doing more on the housing front to get awards and money in the system to build affordable housing, which is needed,” Coughlin said. “I just don’t see much of what they did as being deeply meaningful.”
House Speaker Ben Toma, R-Peoria, said housing was one topic the Legislature didn’t address to the extent that he had hoped for.
One measure many lawmakers had high hopes for during the session was the “Arizona Starter Homes Act,” which included several provisions aimed at regulating lot sizes for developers to build smaller homes aimed for first-time homebuyers.
Hobbs vetoed the starter homes measure, HB2570, despite the bill being supported by a bipartisan group of legislators, including Ortiz and House Majority Leader Leo Biasiucci, R-Lake Havasu City.
The governor wrote in her veto measure that the bill could have “unintended consequences,” including safety concerns of increased density near military operations and smaller roads.
City leaders also attributed opposition to the measure to an elimination of zoning.
“The thing that we didn’t like about that bill is that it abolished zoning. Everything else in it was great,” Giles said. “The development industry is taking advantage of the affordable housing crisis as a way to try and get out and under any local regulation.”
Both Giles and Ortiz said they are hopeful an agreement can be reached for a bill next session. Negotiations over the measure continued through the end of session, but lawmakers were unable to reach a deal by sine die night, Ortiz said.
“We really need power brokers at the Legislature to get up to speed with what governors, both Republican and Democrat from across the country, have already identified, which is smaller lot sizes equal cheaper housing.”
Another element that halted the bill was a lack of a guarantee that developers be required to build affordable homes in it. Ortiz said she wasn’t sure how to include a guarantee like that in the bill without market regulation, which she said Republicans don’t support and the Governor’s Office has been unclear on its stance.
Another potential way to tackle the issue is to include an area median income requirement in the bill, but Ortiz said she was hesitant about that solution because many of her constituents make more money than an area median income but are still struggling to pay bills.
Requiring an affordable housing guarantee isn’t simple for municipalities either. Cities are currently unable to pass any land use ordinances that require developers to build a specific percentage of homes at a development because Arizona is one of seven states that prohibit this practice, called inclusionary zoning.
“It is a mystery to me why the quote-un-quote housing advocates didn’t push on this issue,” Giles said. “That really seems like a low-hanging fruit if folks in the Legislature want to do something that will actually result in affordable housing being built.”
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