Panel OKs cuts on zoning regulations for housing 

A Senate committee passed legislation on Feb. 8 to drastically reduce zoning regulations on housing, despite opposition from municipalities that want to retain the power to make zoning decisions themselves.

The bill passed the Senate Commerce Committee with a vote of 5-2, but some of the “yes” votes said they’ll potentially retract their support if the bill goes forward without further changes and stakeholder input.

Sen. Steve Kaiser, R-Phoenix, attempted to pass a version of this bill last year, but it was transformed into legislation that established a Housing Supply Study Committee – which Kaiser chaired in the interim between sessions. The Housing Supply Study Committee held a dozen meetings over six months and heard from more than 70 individuals, before the members made their recommendations.

Out of the committee’s research and an extensive stakeholder review process, Kaiser crafted Senate Bill 1117. The dense bill would not only cut zoning regulations, but it would put “shot clocks” on the timeline of cities to approve developments and make allowances for restricted forms of housing.

Kaiser’s bill requires municipalities to discuss applicant requests within five working days of the request being made, and to offer instruction for the applicant to make any necessary corrections. Municipalities will adopt new policies, under which they must consider building applications within 30 days if they meet all requirements and approve the application within 90 days, unless a property owner in the area proves that the proposal will be harmful to them.

One of the most important aspects of the bill prohibits municipalities from imposing housing design element regulations.

Developments have been shot down over wall texture, paint color or even the attractiveness of trees developers planned to use. This would stop those aesthetic detail-based rejections and create more variety, according to Kaiser.

Glendale Mayor Brigette Peterson was one of many city representatives who opposed the bill and warned it will have “unintended consequences” that don’t fix the problem it’s trying to solve. Phoenix, Tucson, Tempe, Flagstaff, Scottsdale and nearly every other large Arizona city signed in to show their opposition to the bill.

Attorney Frank Cassidy argued against the bill on behalf of the League of Arizona Cities and Towns.

“This bill eliminates most city and town authority over housing residential issues, and it does it so that you’ll create a flood of housing with the idea that having a flood of housing will make housing more affordable,” Cassidy said.

Sen. Anna Hernandez, D-Phoenix, responded that she fails to see the problem with a flood of housing. Cassidy acknowledged that studies show a greater housing supply leads to more affordable housing, but not in the short term.

Although Kaiser reiterated several times that the bill will not apply to cities and towns with populations under 25,000, which would exclude many rural areas and small Valley towns like Paradise Valley, Cassidy disagreed.

Kaiser also stipulated that existing municipal bylaws or HOA rules take precedence over this bill.

An earlier draft of Kaiser’s bill involved giving money to the Housing Trust Fund, but for strategic reasons, he said he removed that from this bill and is instead supporting a bill from Sen. Lela Alston, D-Phoenix, which would add to the fund.

Sen. Anthony Kern, R-Glendale, read portions of emails he said he received from opposers of the bill accusing the Legislature of acting to make developers richer and capitulating to interest groups.

“If we did nothing and just kept to the status quo … that’s what benefits the developers more,” Kaiser said. “When you really critically think about it, this does the opposite.”

Tempe Mayor Corey Woods, a member of the Housing Supply Study Committee, spoke against the bill, which he said does not implement the recommendations he made to Kaiser. Woods asked the committee to make provisions for inclusionary zoning – which mandates that a portion of all units in new housing projects must be affordable. He also asked the state to address the high cost of land.

Spencer Kamps, vice president of legislative affairs with the Home Builders Association of Central Arizona, which supports the bill, said that although the high cost of land and building materials are important factors that discourage homebuilding, they are not state regulated, and therefore law changes like those in Kaiser’s bill are what the Legislature should focus on.

Cassidy said the league has no problem with multifamily developments, but it wants to make sure the buildings are well-thought-out, and cities put “the right thing in the right place.”

Bill supporters also include the Arizona Association of Realtors, the Arizona Multihousing Association and the Urban Phoenix Project.

Matt Contorelli, Arizona Realtors Association government affairs director, referred to the United States’ overall housing supply shortage, which was a deficit of more than 5 million homes, as of 2021, according to the National Association of Realtors.

Jake Hinman, Arizona Multihousing Association Government Affairs consultant, also addressed the committee in vehement support of the bill. Hinman argued that this is an issue that unites politicians of all creeds. He referred to efforts by the Biden, Trump and Obama administrations to address the zoning issue that affects every state in the country and said the process for this bill reflects an exaggerated zoning case like you could find in many cities.

The timing component of Kaiser’s bill is one of its more popular elements. Sen. President Warren Petersen, R-Gilbert, has made it clear he wants to speed up the building process so that homes can pop up months rather than years after the developers propose their plans.

Hinman agreed: “My guys often tell me they would rather a short ‘no’ than a ‘yes’ after 760 days. Time is an absolute killer.”

“Architects go to school for a reason,” Hinman continued. “They’re trained to make good design choices…our great cities. This notion that prescriptive design requirements give us uniqueness or give us character. … I would say it’s really the opposite.”

In response to concerns that buildings won’t have enough parking or won’t be built with attractive features if those things aren’t required by city rules, builders argue that it will always be in the best interest of developers to include whatever residents need. Hinman noted that long before the concept of zoning was invented, people survived in appropriate housing.

The bill specifically adds protections for accessory dwelling units (like “mother-in-law suites”), manufactured homes, single-family units, duplexes and fourplexes. Duplexes and similar structures are known as the “missing middle” in housing, because they’ve been zoned out of many states since the 1940s and they land somewhere between large multi-family apartment buildings and traditional detached single-family homes. They also tend to land in the middle in terms of affordability.

The bill also includes protection for single-room occupancies, which means dorm-style living where residents have their own rooms but share some common areas. This type of housing is often affordable, but severely restricted in Arizona.

Other bill provisions establish a rural infrastructure grant program, requiring municipalities to regularly publish housing data, offer an appeals process to developers whose housing applications are denied and establishing an “objective” standard for officials to use when considered housing applications.

Some Democrats and Republicans on the committee supported the bill, and others opposed it. It’s not yet clear what Gov. Katie Hobbs’ thoughts are on the proposal.

Hobbs lists zoning changes as a priority in her housing plan. Some of those specific proposals line up with the contents of Kaiser’s bill, but other provisions do not.