Affordable housing is a divisive issue for AZ House and Senate candidates

By Judy J. Beasley Last updated Oct 3, 2022

Arizona needs 270,000 more homes to meet demand, according to the Arizona Department of Housing. And Phoenix-area rents have jumped nearly 30% in 2021, excluding many low-income residents.

Arizonans say they want elected officials to act.

According to an August election survey by the Center for the Future of Arizona, 80% of voters from all political backgrounds agreed that housing costs were “out of control.” Almost as many agreed that “Arizona needs to do more to ensure housing options are affordable and available to middle and low income people across the state.”

Yet there are multiple state-level roadblocks to creating more affordable housing, including a law that prohibits cities from regulating vacation rentals and limiting rent increases.

The Arizona Republic has spoken to candidates in several competitive legislative races about how they plan to address the housing crisis if elected.

While candidates on both sides of the aisle agreed on the importance of building more housing and bolstering the state’s housing trust fund, their views diverged regarding the vacation rental regulations.

Build more housing

Candidates from both parties agreed: Arizona needs more housing.

“We have to keep building. And you have to build several families [homes]said State Rep. Steve Kaiser, a state Senate candidate in Legislative District 2 in North Phoenix. Kaiser co-chairs the state housing supply review committee.

He plans to draft new legislation on the policy solutions identified by the study committee, which will publish its report by the end of the year. Fixes could include streamlining municipal processes to allow developers to build faster and with fewer costly design standards, Kaiser said. In the study committee, elected officials, housing advocates and developers discussed the long waiting times for building permits and the strict design requirements, such as the obligation for homes to have garages, drive up the cost of housing.

Jeanne Casteen, Kaiser’s Democratic opponent, also supports increasing the housing supply in Arizona. The state should consider ways to incentivize developers to include low-income and worker housing in their new developments, she said.

Christian Lamar, a Republican House candidate in Legislative District 2, said in an email that his affordable housing plans include deregulating zoning “where it makes sense” and allowing developers to build more homes.

“Get the government out of the way as much as possible,” Lamar said.

State Representative Justin Wilmeth, who is running for re-election in Legislative District 2, said he will seek to zone more areas for residential development where possible.

“There are badly zoned areas that we could turn into residences, probably quite quickly,” he said.

State Rep. Judy Schwiebert, a Democrat running against Wilmeth and Lamar, said in an email that the affordable housing crisis “is a time when everyone is on deck that requires many solutions.” She said she supports zoning reform that encourages infill development “of low-density courtyard apartments, duplexes and other units that are inherently more affordable than single-family homes on large lots.”

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Increase for Housing Trust Fund

Several Democrats and Republicans have said the Legislature should replenish the Arizona Housing Trust Fund, which funds affordable housing developments and programs.

In past years, the fund brought in $10–20 million a year from the sale of unclaimed property in Arizona. But in 2012, the Legislative Assembly capped the amount the fund could receive from unclaimed property at $2.5 million a year.

The fund received a $60 million injection of public funds from the state budget this year. But some candidates want more.

“60 million dollars, we’ll take it, right?” said Lorena Austin, Democratic House candidate in Mesa’s Legislative District 9. “But we’re so behind the times that we need to infuse for the long haul.”

Seth Blattman, who runs alongside Austin, agreed. Mary Ann Mendoza and Kathy Pearce, the Republican House candidates for Legislative District 9, did not respond to requests for comment.

Casteen and Kaiser also said they would support the expansion of the Housing Trust Fund. In February, Kaiser introduced HB 2674, which reportedly allocated $89 million to the fund. The bill, which would also have imposed statewide zoning rules, was amended and instead created the Housing Supply Review Committee.

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Addressing Short-Term Rentals

The candidates disagreed on whether to regulate more strictly short-term vacation rentals, which are often booked through online companies such as Airbnb and Vrbo.

Research shows that short-term rentals drive up house prices and rents while reduce the supply of available housing for the inhabitants. The number of short-term rentals has grown exponentially in some Arizona communities over the past few years.

But a 2016 state law prohibits cities and towns from regulating the number of vacation rentals in their jurisdiction. Several Democrats have said they support giving municipalities the power to cap that number.

“We need to stop tying the hands of municipalities to make these decisions about what’s needed in their own backyards,” Casteen said.

Republicans Kaiser and Wilmeth disagreed with allowing local regulation. It would interfere with personal property rights, Kaiser said.

“If you own this house and want to rent it out, you shouldn’t have the city telling you you can or you can’t,” he said.

For subscribers: Scottsdale’s proposed short-term rental regulations are ‘very limited’ by the state, officials say

Limit rent increases

Mesa’s Democratic candidates have said they will consider legislation to limit the amount landlords can raise rents each year.

California and Oregon already have such laws in place. The California Rent Stabilization Act of 2019, sometimes referred to as rent abuse lawcaps annual rent increases on certain types of properties at 5% plus the rate of inflation, with a maximum of 10%.

While rent control generally limits rents to a fixed dollar amount, rent stabilization allows for modest increases based on a set percentage.

“Having a 5 or 10 percent price increase versus 40 or 50 percent is the difference between them losing their house,” said Eva Burch, Democratic Senate candidate for Legislative District 9.

Burch’s opponent, Republican Robert Scantlebury, did not respond to requests for comment.

Arizona law prohibits cities and towns from controlling rents unless the property is owned, funded, subsidized, or insured by the state or local government.

Attempts to reduce rents have had mixed results elsewhere. A San Francisco study found that rent control helped many tenants, but also pushed more landlords to sell their rental propertiesdecreasing the supply of rental housing by 15% and resulting in a 5% increase in rents across the city.

Austin, who is running in Mesa, said she would consider how legislation similar to California’s might work in Arizona. She has spoken to many longtime Arizonans who are considering leaving the state due to unmanageable rent increases, she said.

“It’s not perfect, and I’m sure it would bother some people…but we have to do something,” she said of rent regulation. “Because we see so many people getting up and leaving.”

Juliette Rihl covers housing insecurity and homelessness for the Arizona Republic.

Coverage of housing insecurity on azcentral.com and in the Arizona Republic is supported by a grant from the Arizona Community Foundation.