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AZ Legislature sends bipartisan affordable housing bills to Hobbs

Older neighborhoods of single-family homes near the downtowns of large Arizona cities could see major makeovers into more dense developments of duplexes, triplexes and even fourplexes and townhomes under a zoning reform measure headed to Gov. Katie Hobbs’ desk.

The measure approved by the House on Wednesday requires cities to allow those developments in single-family home areas within a mile of the "central business districts" of all cities with a population of 75,000 and more — essentially Tucson, Phoenix and 13 other metro area municipalities. Cities designate those areas, and they can extend far beyond older downtown areas.

The new rules in HB 2721 also require cities to allow at least 20% of new single-family housing developments of 10 acres or more to be zoned for those multi-family homes.

This measure, along with HB 2720 requiring those cities to allow backyard homes known as accessory dwelling units or casitas to be built in existing neighborhoods that also passed the House Wednesday, are part of a package of bills lawmakers are pushing this year to address Arizona’s housing shortage. 

Both had already won Senate approval so go to Hobbs for her signature or veto.

Both are designed to spur construction of smaller, cheaper homes that can appeal to and be affordable for first-time homebuyers. Soaring home prices for traditional homes along with higher interest rates have priced many younger people out of homeownership.

The "middle housing" bill was the result of a negotiated deal between Rep. Michael Carbon (R-Phoenix) builders and affordable housing advocates and the League of Cities and Towns. The League fought Carbone’s initial middle housing proposal because it covered entire large cities, but the scaled-back version won its backing.

Hobbs vetoed a major housing bill that was backed by Republican leaders in the House and Senate in March.

That bill drastically limited city power over housing and required them to allow very small homes and lots across vast swaths of existing cities and in all new developments. It was vehemently opposed by cities and other groups.

The governor said she instead wanted negotiated deals.

That appeared to make a difference. And since then, she's signed laws approved with bipartisan support — and with the blessing of the cities — allowing older commercial buildings to be demolished and turned into apartments and cutting the time cities have to approve zoning changes.

None of the bills affect existing areas with homeowner’s associations, because they are contracts that can’t be overruled by zoning rules.

Carbone said both the casita bill and the middle housing bill were the result of hard-fought negotiations.

"She wanted both sides to come to agreements," he told Capitol Media Services.

"We did," Carbone said. "Both sides gave up stuff on here."

The middle housing bill has the greater potential to remake existing neighborhoods.

In essence, it says if there are vacant lots zoned for single-family housing within a mile of the "central business district" they can now be used for those multi-family structures, all without further review or consent by the city. And, as worded, it even would allow a developer to tear down single-family homes within that district and replace them with the multiplexes — essentially putting multiple families onto a residential lot that, prior to that, would be home to only a single family.

Carbone said, though, it will take time before more housing becomes available. But he also said he disagrees with concerns that it will radically change established neighborhoods, saying that already is being done by big apartment developments.

"Will it make it denser — yes, to some capacity" Carbone said.

"But we don't have the same arguments when we're talking about (building) 130 units at eight stories or 10 stories up," he said. And Carbone argued that the change will help create the kind of homes people want to live in and help rejuvenate downtowns, he contends.

"Middle housing’s purpose is to be close to your necessities — close to food, close to health care, those things and close to transportation," he said. And the benefits, Carbone said, extend beyond the housing itself being less expensive.

"A lot of these folks that have middle housing, they don't need a car, might not be able to own a car," he said. "But they can least walk to work."

In fact, the legislation even suggests that the new occupants of these multiplexes will be less reliant on vehicles. It prohibits cities from requiring more than one off-street parking space per unit.

HB 2720, the legislation on accessory dwelling units, has proven more controversial.

It is opposed by the League of Cities and Towns and some neighborhood groups, mainly because it allows them to be used as short-term rentals. They argue that allowing backyard additions to be used as Airbnbs does nothing to address Arizona’s big housing shortage. The state is estimated to be short about 270,000 housing units.

Carbone, however, noted there is a safeguard: As sent to Hobbs, the legislation requires that an owner must live in one unit for a new casita to be rented an Airbnb.

That, however, isn't the only objection by cities. They also point out that the measure precludes them from requiring the outsides of these new additions to match existing homes.

But HB 2720 allows just one attached accessory dwelling unit and one detached one if the home site is less than an acre. A second detached dwelling can be built on larger lots.

Rep Sarah Liguori (D-Phoenix) called the measure an "easy and quick and affordable solution to our affordability crisis in this state."

She brushed off concerns about investors buying homes to add casitas and turn them into Airbnbs because of the provision in the bill requiring owner-occupancy to rent out a new casita.

Carbone said in an interview before Wednesday's votes he hopes Hobbs signs the casita bill, even though it does not have complete buy-in from the cities and those neighborhood groups.

"They wanted negotiations," he said.

"We've negotiated a long (time), six months on this, plus," Carbone said. "I feel that we did our part. I hope the governor will sign this."