Arizona bill aims to ease housing shortage by overriding city control

Legislation that would force cities to allow more apartments could alleviate Arizona's housing and homelessness crisis but must overcome opposition from cities and, importantly, Gov. Katie Hobbs.

Details: Senate Bill 1117 would make several major changes to limit cities' ability to restrict multifamily housing, including:

• Requiring allowances for duplexes, triplexes and lots smaller than 4,000 square feet;
• In areas designated for commercial, multifamily or mixed-use developments, cities must permit new housing to have the greatest density previously allowed in the city, and must allow the greatest height of any building within a mile;
• If the development is within 2 miles of a rail stop, housing developments can't be limited to less than 80 feet in height.

Of note: Most of the bill's provisions don't apply to cities with fewer than 25,000 people.

Why it matters: New housing largely screeched to a halt when the market crashed in 2008 and never picked up enough to meet demand created by Arizona's growing population.

• Now, the state needs about 270,000 additional housing units.

The other side: Cities vehemently oppose the legislation, which they say unacceptably eliminates much authority to regulate housing.

• "We don't see any way to fix it, and we would encourage the legislature to discuss other alternatives," Tom Savage, legislative director for the League of Arizona Cities and Towns, tells Axios Phoenix.
• Savage says the legislature should instead consider inclusionary zoning that imposes requirements for certain numbers of affordable housing units, tax increment financing, or legislation similar to a 2019 affordable housing law in Utah that encourages cities to permit more affordable housing.

Between the lines: Hobbs has expressed skepticism about the bill, which requires her signature.

• The governor has spoken often about addressing homelessness and housing problems but said the state must work with local jurisdictions.
• "There's not a one-size-fits-all approach. And it's important that we're not coming in and upending … cities' local plans," Hobbs told reporters last week. "I think I've been clear on my concerns on just a unilateral approach."

Sen. Steve Kaiser, a Phoenix Republican who sponsored the legislation, said he's met with her administration and will work to ensure the governor signs the bill.

Catch up quick: The Senate Commerce Committee approved SB 1117 on a 5-2 vote Feb. 8, with three of its four Republican members and two of three Democrats supporting the bill.

• Several members who voted in favor noted they have reservations and want to see continued negotiations.
• Some Democrats and other critics questioned whether the measure would create more affordable housing or simply incentivize market-rate and luxury apartments.
• The bill's next stop is the full Senate.

Zoom in: The Phoenix City Council approved a rezoning request for a new 55-foot-tall apartment complex at Seventh Avenue and Camelback Road last week.

• If this bill were in place, the developer could have built an 85-foot-tall complex without city approval or neighborhood input, Phoenix planning staff said.
• Council Member Laura Pastor, who represents the area, said she worked with the developer and neighborhood for months to come to agreements on traffic, landscaping and sidewalks.

What they're saying: "It takes the council person who represents the district out of the process. [They] probably know that area and neighborhood much better than a statewide bill [could account for]" Phoenix Council Member Deb Stark said at a meeting Wednesday.