Affordable housing is back in the spotlight in Arizona's 2025 legislative session

Housing — specifically, how to make it more affordable — is shaping up to be a key issue in the Legislature again this session.

Why it matters: Home and rent prices have surged over the past decade, putting ownership out of reach for many families in once-affordable Arizona.

Friction point: Though almost everyone agrees something must be done, state lawmakers and cities are at odds over how to bring down prices.

• As lawmakers have pushed to limit cities' ability to control zoning decisions, cities say what they actually need are more tools to incentivize affordable housing and clamp down on short-term rentals and investment properties.

Context: The rapid home price spike — which began before 2020 but accelerated during the pandemic — has largely been attributed to a housing shortage dating back to the Great Recession.

Driving the news: A group of lawmakers Monday announced the creation of a bipartisan housing and homelessness caucus that will meet biweekly and consult with stakeholders, experts and advocates.

• Rep. Leo Biasiucci, R-Lake Havasu City, said the lawmakers hope the governor's office will be involved, and that they'll talk with cities, whose opposition led to the defeat of housing-related bills in recent years.
• "We won't agree on everything. But … we can amplify the voices of those who are most affected by these issues and advocate for the areas where we do have common ground," said Sen. Analise Ortiz, D-Phoenix.

State of play: The League of Arizona Cities and Towns told Axios it's running two housing-related bills this session

• One will permit cities to crack down on short-term rentals by limiting the number of licenses and creating buffers between STRs so "entire neighborhoods aren't turning into de facto hotels," the league's legislative director Tom Savage told Axios.
• The other aim is to encourage the construction of lower-cost "starter homes" by limiting design and feature requirements and reducing lot sizes on larger housing developments.
• Those homes would have affordability and income requirements and be sold to individuals instead of corporations.

Meanwhile, members of the bipartisan housing caucus have either introduced or planned to introduce numerous bills.

• Biasiucci is planning a successor to the starter homes bill he and Ortiz pushed last year, which Gov. Katie Hobbs vetoed.
• Rep. Selina Bliss, R-Prescott, is running legislation on transparency for contracts at mobile homes, where she said some residents are getting priced out by rent increases, and another to use industrial development authorities to bring down housing costs.
• Sen. Catherine Miranda, D-Phoenix, has a plan that would provide state funding matches to cities for homelessness prevention.

Catch up quick: Hobbs last year vetoed Biasiucci's starter homes bill that would have overridden cities' authority over some zoning restrictions, which the league opposed.

• But she signed legislation requiring larger cities to permit accessory dwelling units on single-family lots;
• Facilitating the construction of "middle housing" like duplexes and triplexes;
• Making it easier for developers to convert commercial land for housing;
• And setting new time frames for zoning applications.

What we're watching: In her State of the State address on Monday, Hobbs proposed short-term rental legislation similar to what the league is running, the extension of the state's Low-Income Housing Tax Credit, and the expansion of the Arizona Is Home program, which provides aid to first-time homebuyers.