The bipartisan bill that could chip away at housing unaffordability in Arizona

Correction: A previous version of this story incorrectly stated municipalities require homes to be a certain square footage. We regret the error.

Arizona is facing a perpetual shortage of housing for working class families — an issue the Arizona Starter Homes Act seeks to resolve.

Senate Bill 1229 aims to make home ownership more affordable and attainable for Arizona families and serve as a middle ground between purchasing a home that comes with home owner association fees or renting indefinitely.

Sen. Shawnna Bolick, R-Phoenix, and Sen. Analise Ortiz, D-Maryvale, are two of the bill’s most ardent supporters — but from very different perspectives.

Ortiz is an Arizona native who worked her way through college to minimize debt and has been in the workforce for over a decade, but has been unable to save enough money for a down payment due to high rent prices.

“I’m 31, born and raised in this state, went to college, worked a full-time job all the way through college, unable to afford a home [and] rent is so high I can’t save,” Ortiz said of her experience during a committee meeting on Feb. 5. “Do you think that people like me don’t deserve a shot at home ownership?”

From the opposite side of the aisle and from the perspective of a homeowner, Bolick described how she’s watched her son and his wife struggle find a way to purchase their first home together.

“The bill would allow the homebuyer to choose how they want to build their home and how they want it to look — not some unelected government bureaucrat,” Bolick said. “In today’s housing market crunch, the middle class and young families are continually priced out of the housing market.”

Smaller houses

Both Ortiz and Bolick see the Arizona Starter Home Act as a way to break down some of the barriers to home ownership they’ve seen in their lives and the lives of their families.

One of those barriers? Lot size requirements.

Many cities develop complex zoning codes that make it difficult to keep building costs down for developers, who then pass those expenses onto the homebuyer. The bigger the house, the higher the price tag, leaving apartments, condos, and townhomes for people looking for a smaller space. But those come with pricey HOA price tags or are only used as rental units, a barrier some see as enough to keep home ownership at arm’s length for anyone who can’t afford a large home.

In Goodyear, for example, any home built on a lot smaller than 5,500 square feet is required to have a certain number of additional neighborhood amenities, such as a clubhouse, park, or detached sidewalk with an irrigated planter. These required amenities drive up the cost in the form of HOA fees, and Arizona has some of the highest HOA fees in the country.

Local ordinances that require lot size minimums would be mostly abolished under the Arizona Starter Homes Act, which would allow for more flexibility in lot sizes. Supporters of the bill believe this could lessen the cost of housing right off the bat and lower the average price of a home in Arizona, which is currently $450,000.

Fewer monthly fees

In the ‘50s and ‘60s, starter homes—smaller, less expensive homes that first-time homebuyers could afford—were readily available. These houses were constructed with the interests of younger homeowners and families in mind, offering a cheaper alternative to renting, and the neighborhoods offered minimal amenities compared to what a modern-day HOA may provide at a steeper cost, such as landscaping, pools, and private playgrounds.

This ownership, and development of equity in turn, has become scarce in Arizona’s housing market. Without a pathway to ownership, Arizona’s younger generations could become trapped in the cycle of renting, something that the Arizona Starter Homes Act seeks to avoid.

It would also prevent municipalities from mandating amenities that would require an HOA, serving as a buffer for those who wish to avoid—or can’t afford—expensive HOAs.

Almost one-third of homes in Arizona are currently part of an HOA, making them difficult to get around.   Ending HOA requirements would allow potential homeowners more of a choice in deciding whether or not to participate in an HOA rather than feeling forced to incur the additional costs they bring. By avoiding potentially unwanted frills and fancies, the act could allow younger families to become homeowners.

Next steps

The Starter Homes Act passed in the Arizona Senate with bipartisan support by a slim margin of 16-13. It is currently being debated in the Arizona House and, if passed, will be sent to Gov. Katie Hobbs to be signed into law.