Arizona advances bill to boost home inventory

Arizona lawmakers advanced a bill to revise city zoning regulations in an effort to increase home inventory and combat housing affordability issues in the state.

The Arizona Starter Homes Act passed on a bipartisan basis in early March by a vote of 16 to 13 and comes after the state's House moved forward on its own version of the legislation in January. The 2025 act is an update from a similar bill politicians put forth last year that failed after a veto by Gov. Katie Hobbs. 

The legislation's major provisions would circumvent potential zoning restrictions from local government officials that might impede efforts to create starter-home inventory aimed to support new and first-time buyers. 

Cities with populations of more than 70,000 would be obligated to allow for single-family construction on lot sizes of a minimum of 3,000 square feet on any new developments covering more than than five acres of land.  The minimum mandated lot size is an increase from 1,500 square feet in a previous iteration of the bill.

If passed into law, new regulations would likewise prevent local jurisdictions from putting onerous standards on the types of materials, features and designs in new-home construction as long as they do not supersede building, fire or public health rules. 

Also included is a provision that prohibits local municipalities from requiring services and maintenance be provided from a shared entity, as found in homeowner and condominium association agreements.

"Both Senate Republicans and Democrats agree that the Arizona Starter Homes Act is a common-sense solution to help Arizona families, teachers, first responders, young professionals and other working-class citizens who've been priced out of the housing market, the ability to afford a home and start creating generational wealth," said Republican Senator Shawnna Bolick, who sponsored the legislation. 

The 2025 version of the act addressed some of the issues that led to Hobbs' veto last May, the senator added. At the time, the governor cited the exclusion of certain areas surrounding military airports and expressed reservations on the limits placed on cities to regulate housing development. 

"I'm optimistic she will take the right action this time by signing the bill when it hits her desk," Bolick said.

Arizona saw a boom in home buying boom and subsequent inventory crunch beginning at the start of the Covid-19 pandemic, spurred by interest from both new residents moving in from out of state and investors. 

The median price of a single-family home in January was $470,500, according to analysis from real estate brokerage Redfin. The current median skyrocketed by 58.9% from $296,100 for the same month in 2020. 

"Today's bipartisan vote is a result of weeks of negotiations to make the Arizona Starter Homes Act as effective as possible at achieving its goal: to make homeownership attainable for hardworking Arizona families once again," said Democratic Senator Analise Ortiz. 

"Throughout this process, we've asked skeptics of the bill how old they were when they purchased their first home and how much it cost. Overwhelmingly, we discovered almost everyone was in their mid-20s and bought their homes for $150,000 or less," she added. 

On the other side of the argument is the League of Arizona Cities and Towns, whose lobbying helped kill 2024 attempts to pass a starter homes act. The league is likely to oppose the Senate's new bill after offering up different proposed legislation in February addressing the same issue.   

For reprint and licensing requests for this article, click here.
Housing affordability First time home buyers Housing markets Arizona
MORE FROM NATIONAL MORTGAGE NEWS