Key Points:

• Housing was a priority for both parties at the start of the session

• Legislators and league have disagreed on bills to lower home prices for years

• Starter Homes bill in limbo as legislative focus shifts to budget

Leaders of both parties at the Arizona Legislature have stated that housing is a priority for them this session, but the only major housing bill appears to have stalled at the Capitol. 

Sen. Shawnna Bolick, R-Phoenix, the sponsor of the “Arizona Starter Homes Act,” told the Arizona Capitol Times on April 30 that discussions for the measure have stopped since meeting with Gov. Katie Hobbs’ staff about a month ago when the bill was considered and passed by the House Commerce Committee. 

House leadership has not yet scheduled the bill for a floor vote, as lawmakers are now focusing on the state budget.

Initially, there were two mirror versions of the bill, but House Bill 2371 also stalled in the House in February. Bolick said she wishes that both versions of the measure were still under consideration in the event of a veto, but Senate Bill 1229 may be the last opportunity lawmakers have this session to address housing. 

“If the governor doesn’t like the idea, she can call us up and say, hey, we really need a win for this year. Let’s work on some other language where we agree. But sadly, I don’t think they even agree with the current language that’s in the bill and it’s not worth going back to the drawing board this year,” Bolick said. 

Hobbs said at an April 30 press conference that stakeholder discussions for the bill are still continuing, but didn’t share any specifics as to what’s holding up the measure. 

Last year, Hobbs vetoed a similar Starter Homes Act proposal, which the League of Arizona Cities and Towns urged her to do. 

The league has run its own starter homes bill, Senate Bill 1698, sponsored by Sen. Vince Leach, R-Tucson. However, it wasn’t heard in the Senate Regulatory Affairs and Government Efficiency Committee, which Bolick chairs. 

State legislators and the league have disagreed with one another on housing bills aimed at lowering home prices for years, dating back to then-Republican Sen. Steve Kaiser’s efforts in 2023. 

Bolick said she doesn’t think the league likes anything about SB1229. However, the league does support a striker amendment offered by Rep. Janneen Connolly to the bill that would replace it with ideas that the league has pitched. These include a 15-year residency requirement for starter home owners. League officials say their measure would prevent corporations from buying up starter homes and further inflating prices. 

The league’s proposal also gives cities better control over the density of neighborhoods.

“Growing communities require expanded fire and police services, well-connected streets, sidewalks, parks and other essential infrastructure,” Chandler Mayor Kevin Hartke, who is president of the league, said. “We must have participation from residents if we’re going to have thoughtful, community-driven solutions.”

SB1229 would prohibit cities from requiring specific features, amenities and other design elements of a home with the goal of building smaller homes that fit with the budget constraints of first-time homebuyers.

A survey commissioned by the league, published on April 23, found that 73% of respondents have the most confidence in their local city or town to determine housing needs of the community over the state Legislature. 

And 85% of respondents said they wanted local residents to have input in how their community is planned and developed, while 77% of respondents agreed that more affordable housing is needed in their communities.

“It’s clear that Arizonans don’t want developers to shut them out of the planning process,” the league’s Executive Director Tom Belshe said in a news release.“Their voice is critical to proper planning for housing. We need starter homes for residents of Arizona, not handouts to Wall Street real estate speculators.

Home sales have fallen nationally to a level comparable to home sales during the Recession. Politico reported the number of homes sold in March was at its lowest level since 2009, decreasing to an annualized rate of four million units.

The league isn’t the only organization that has opposed the measure. The Legislative District 2 Republican Precinct Committee voted on April 28 to censure both of their Republican legislators, Bolick and Rep. Justin Wilmeth for supporting the Starter Homes Act.

Both censure resolutions said the measure conflicted with the will of LD2 constituents and that the bill would enable the construction of “15-minute cities.”

Bolick said she didn’t understand the censure as a “Reagan Republican.” 

“It doesn’t add up to me why the Republican Party has all of the sudden abandoned private property rights,” she said. 

Other conservative groups support SB1229. Americans for Prosperity Arizona and the LIBRE Initiative Arizona sent House Speaker Steve Montenegro a letter urging him to hear Bolick’s bill on the House floor. 

Stephen Shadegg, the director of Americans for Prosperity Arizona said he believes the opposition to SB1229 comes from people who own homes and want to protect their accumulated wealth.

“They have every right to do that, but they’re putting pressure on legislators to not pass legislation that would open the door for the next generation,” Shadegg said.

Americans for Prosperity also sent Montenegro a custom Lego set of a “Cozy House,”  which has a label on its box indicating that the set requires city zoning and is recommended for anyone 38 or older, the average age of a first-time homebuyer in the state. 

The number of Lego pieces labeled on the box is $450,000, which is roughly the median home price in Arizona. 

“On behalf of Americans for Prosperity Arizona, THE LIBRE Initiative Arizona, and the undersigned Arizona residents and constituents, we want to thank you for your leadership,” the two organizations wrote to Montenegro. “Thanks to your leadership, this LEGO Home is the only home future generations can afford.”

Jake Hinman, a lobbyist who has advocated for the Stater Homes Act, said he and other supporters of the measure remain hopeful the bill will reach the governor’s desk in a form that she can sign. 

“It’s really quite discouraging to see everything that has been stacked against the middle class and anyone under the age of thirty-eight from achieving their American Dream of homeownership,” Hinman said. “Every prior generation had access to a starter home to build wealth and raise a family in. This is a truly historic period in America where the government has made those homes illegal to build for current and future generations.”