Affordable Housing Bill Clears Committee Hurdle as Cities Propose Alternatives

A bipartisan housing bill aimed at assisting first-time homebuyers has made progress in an Arizona House committee. The measure, known as HB2371 or the “Arizona Starter Homes Act,” passed through the House Commerce Committee on Tuesday amid preparations for negotiations with municipal leaders.

Rep. Leo Biasiucci, R-Lake Havasu City, the bill’s sponsor, emphasized the importance of collaboration. “This is the start of the process. We need to figure something out,” he commented.

The proposed legislation would limit city regulations on specific home design features, such as walls, fences, garages, and building materials. It would also set a maximum minimum lot size of 1,500 square feet for new developments exceeding five acres.

Although similar to last year’s vetoed version, HB2371 now includes a clause addressing military installation concerns, specifically regarding density near Luke Air Force Base in Glendale.

A significant challenge arises from the differing perspectives on addressing housing affordability between municipal leaders and homebuilders. Spencer Kamps from the Home Builders Association of Central Arizona noted that starter homes are effectively banned in many communities, particularly in the Phoenix metropolitan area.

Kamps cited a proposed San Tan Valley project priced at $260,000, where adding a garage would raise the cost to $350,000 due to municipal pushback. “They never get to the city council because staff says no. We want entry-level housing,” he stated.

Municipal leaders express skepticism about the bill’s potential to create affordable housing. Nick Ponder, a lobbyist for the League of Arizona Cities and Towns, highlighted the absence of a requirement ensuring these starter homes would remain affordable or not be purchased by corporations for resale at inflated prices.

The median home price in Arizona was approximately $450,000 as of December, showing a substantial increase from $287,000 in December 2019. Proponents of the bill argue that by reducing lot sizes, construction costs and therefore home prices could decrease.

Jake Hinman, a political strategist advocating for the Arizona Neighborhood Project, stated that builders are eager to offer affordable homes but face obstacles in navigating local regulations.

The bill is limited to cities with populations over 70,000, primarily in the Phoenix area. Biasiucci expressed a desire to expand the legislation’s reach but noted that the current population threshold was necessary to secure initial support.

Outside of the conversation around HB2371, municipal leaders introduced an alternative housing bill designed to enhance affordable housing supply, currently under review by the Legislative Council for language refinement.

This alternate proposal suggests a larger minimum lot size of 4,000 square feet to help cities manage density effectively. Additionally, it includes a provision requiring developers to sell homes to individuals or families earning no more than 120% of their area’s median income.

Chairman Jeff Weninger, R-Chandler, encouraged collaboration between cities and builders to develop a mutually acceptable version of the legislation. “I look forward to hopefully some compromise,” he remarked, acknowledging the need for adjustments for the bill to progress.