Gov. Katie Hobbs’ nominee to lead the Department of Housing will serve as deputy director at the department after Senate Republicans rejected her nomination last week.

Joan Serviss, who had been serving in the director position since 2023, has long faced the ire of Republicans in the Legislature and was already rejected by the Senate Committee on Director Nominations during Hobbs’ first year in office. 

The Senate voted along party lines to reject Serviss on Feb. 25. Now, she is serving as the deputy director of the same department, a spokesperson for the Arizona Department of Housing confirmed on Wednesday. 

After her nomination was rejected on Feb. 25, Serviss posted a statement on LinkedIn about the “partisan politics” of the confirmation process and her commitment to keep serving the state. 

 “The current political climate at the Legislature, particularly the relentless attacks of public servants like me, creates an environment where, frankly, it’s hard to imagine how qualified individuals stepping up to lead a state agency can endure what amounts to a political circus,” Serviss wrote in the statement. “At the end of the day, whether I hold the Director title or not, I’m still a leader in the fight to end homelessness and address our state’s affordable housing crisis.”

ADOH’s previous deputy director, Ruby Dhillon-Williams, is now serving as interim director. Hobbs told reporters at a news conference on Feb. 26 that her office was not ready to talk about the next steps to replace Serviss. 

Hobbs’ office did not immediately respond to multiple requests for comment on Serviss’ new role or whether she will take a pay cut. However, Hobbs did double down on her support for Serviss before and after the Senate rejected her nomination. 

“When I became Governor, I nominated Director Serviss to steer Arizona’s housing efforts amid unprecedented cost increases and to keep Arizona affordable for years to come,” Hobbs said in a prepared statement released before the Senate vote on Feb. 25. “Today, just as two years ago, she remains the best person for the job.”

Sen. Jake Hoffman, who chairs the Senate Committee on Director Nominations, dubbed DINO, is a vocal critic of Serviss and called the move “the friends and family plan by Katie Hobbs.” He and other Republicans said they would not confirm Serviss because she was already rejected by the DINO committee in 2023.

“…she thinks that the taxpayers’ dollars and state agencies are her personal piggy bank to give out jobs to her friends,” Hoffman told The Arizona Capitol Times on Wednesday. “It’s disgusting and reprehensible that this is how she thinks state government should run. The senate advised and consented and said no and she doesn’t seem to care. So, I can’t imagine that helps her chances on future nominees.” 

Senate Republican leadership called on Serviss to resign on Feb. 20, citing the prior rejection by DINO and a report from the Auditor General finding that ADOH inadvertently wired $2 million in state funds to fraudsters as reasons why they could not confirm her. 

This is not the first time Hobbs has allowed director nominees to stay on as deputy directors. After Senate Republicans told Hobbs’ office that the nominees for the Departments of Child Services, Environmental Quality and Veterans Services would not be confirmed, Hobbs demoted the three to deputy director positions at those agencies.

However, only one of those former nominees, Karen Peters of DEQ, is still serving as a deputy director. David Lujan, formerly of DCS, left for a position at the Arizona School for the Arts. Dana Allmond, formerly of the DVS, now has a different, veteran-focused role at the Dept. of Economic Security.

Republicans criticized Hobbs for letting those nominees stay on and allowing them to keep their director-level salaries. A bill that would prohibit that exact scenario passed out of the House on Feb. 25.

The conflict began with Hobbs’ first attempt to appoint director nominees during her first year as governor. After DINO rejected and held several nominees in 2023, Hobbs pulled the remaining 19 from consideration and made them “executive deputy directors” which allowed them to run the agency without confirmation. 

Serviss was one of the nominees rejected by DINO in 2023, but her nomination was resubmitted to the Senate. During her first confirmation hearing, Hoffman accused Serviss of plagiarizing letters written while she was executive director of the Arizona Housing Coalition and cited that issue as another reason Republicans voted to reject her nomination on Feb. 25. At the time, Serviss defended herself from those allegations, saying that many housing groups used shared language when writing letters.

The DINO committee needs to hold several more confirmation hearings for Hobbs’ nominees. The next one will take place on March 6. The committee will hear from the nominees to lead the Residential Utility Consumer Office and the State Lottery Commission.