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Hobbs' housing agenda includes local solutions, short-term rental regulation

Woman with glasses surrounded by microphones.
Marnie Jordan/Cronkite News
Arizona Gov. Katie Hobbs on March 4, 2024.

Gov. Katie Hobbs said solutions to the state’s affordable housing shortage may come from outside of the Arizona Capitol.

Hobbs signed several housing bills this year, including a measure to allow homeowners to build casitas, also called accessory dwelling units, on their property and another to increase the supply of more dense developments like duplexes and townhomes in large cities .

But Hobbs also vetoed a bipartisan bill designed to increase the state’s supply of starter homes by reducing some municipalities’ power to ban smaller lot sizes or impose aesthetic requirements.

Heading into next year, Hobbs said legislation isn’t necessarily the answer to the problem. Instead, she said working with local leaders across the state is a key part of her plan to continue addressing housing.

“We're not just going to solve it by legislation, either,” Hobbs said. “This is an issue that affects every community. I've been across the state and talked to local leaders in Safford, in Yuma, in Holbrook. It's an issue everywhere and the solutions are different everywhere.”

However, the governor hasn’t closed the door on looking at additional housing legislation next year, saying she would like to revisit discussions about short-term rental regulations.

That could include changing a state law signed by former Republican Gov. Doug Ducey in 2016 that largely prohibits cities and towns from restricting short-term rentals.

“Well, I think giving communities back more of the local control about how those are regulated, is certainly something that a lot of leaders I talked to would like to see,” Hobbs said.

Republicans and Democrats sponsored a dozen short-term rental regulation bills this year but none received a vote at the Arizona Legislature.

The casita bill Hobbs signed in May did not include a provision sought by some lawmakers, along with cities and towns, to ban homeowners from using casitas as short-term rentals over concerns that the units would be used to increase the number of short-term rentals in the state rather than increase the long-term housing supply.

“I believe that without a prohibition on using these accessory dwelling units as short-term rentals, this will have a devastating effect on many communities in Arizona,” Sen. Ken Bennett (R-Prescott) said when the Arizona Senate passed the bill in May.

Instead, that bill requires homeowners to live on site if they use the casita as a short term rental.

Sen. Anna Hernandez (D-Phoenix) said ADUs make up a small portion of short-term rentals and the provision allows working-class families to supplement their income by renting out the units.

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Wayne Schutsky is a broadcast field correspondent covering Arizona politics on KJZZ. He has over a decade of experience as a journalist reporting on local communities in Arizona and the state Capitol.