Market Data 
- Arizona Gov. Katie Hobbs vetoed a bill aimed at lowering housing costs.
- Arizona’s housing crisis is worsening with rising rents, home prices, and homelessness.
- The veto also contradicts President Biden’s housing affordability efforts as he visits the state.
Arizona Gov. Katie Hobbs just proved yet again how scrambled the politics of housing are.
On Monday, the Democratic leader vetoed a bipartisan bill designed to cut red tape and lower the cost of housing.
The Arizona Starter Homes Act, or HB 2570, would have prohibited cities with more than 70,000 residents from requiring minimum lot and home sizes for single-family houses, ended mandatory homeowners’ associations, and loosened requirements for how far a home needs to be from the street, among other measures.
The bill was designed to encourage the construction of more affordable homes, as smaller lots and fewer regulations make the construction of starter homes easier — and cheaper — for developers.
In remarks on Monday, the governor argued the bill was unproven and “too expansive.”
“We have no idea that this will actually solve the problem of affordable housing and I am confident that there are several bills moving through that do address these issues,” Hobbs said.
Arizona is in desperate need of new affordable housing as rents have surged about 50% and home prices have risen about 60% over the last six years. The state’s unhoused population grew by 30% between 2020 and 2023, in part as a result of soaring housing costs.
In state legislatures across the country, pro-housing policies have both Democratic and Republican supporters and opponents. For example, Montana’s Republican-led state legislature and conservative governor passed a slew of pro-housing policies last year. But in Washington, Democratic lawmakers are more likely to be interested in finding solutions, particularly as rising housing costs drive inflation.
President Joe Biden has put a strong emphasis on addressing the nation’s housing crisis recently. Notably, the president mentioned his new housing proposals in his State of the Union address earlier this month. The proposed policies aim to send federal funds to states to subsidize new housing construction, bring down costs, and help low-income renters and homebuyers.
Hobbs’ veto flies in the face of Biden’s promises and comes at a particularly inopportune time for the president as he visits Nevada and Arizona this week to promote his housing proposals.
The White House detailed the president’s housing policies and previewed his trip out West on a call with reporters shortly after news of Hobbs’ veto arrived on Monday afternoon. Asked about the governor’s decision, a White House official said he didn’t have any comment, but he noted that the administration is focused “on trying to provide incentives for state and local governments to build more housing and to reduce barriers to building housing.”
Arizona state lawmakers who championed the legislation criticized Hobbs’ move. Democratic State Rep. Analise Ortiz said she was “deeply saddened and disappointed” by the veto.
“HB2570 was a historic bipartisan solution to our state’s housing crisis and it would have created a pathway to the American dream of homeownership,” Ortiz said on X.
Hobbs sided with the League of Arizona Cities and Towns, a group that advocates for municipal power, which called the bill “a giveaway to developers.” The US Department of Defense also raised concerns about new construction disrupting the state’s military facilities and called for a veto. The Professional Fire Fighters Association of Arizona argued that increased density would pose a challenge to emergency service and also supported a veto.
Pro-housing advocates across the country were outraged by Hobbs’ decision and pointed to abundant research finding that loosening zoning laws and other land-use regulations encourages more construction and makes housing more affordable. A December 2023 Pew report found that restrictive zoning policies in Arizona have inflated housing costs and exacerbated the homelessness crisis in the state.
Some housing advocates pointed out the apparent contradiction between the Department of Defense’s stance and Biden’s positions on housing.
“Not even a week after he talked a big game about getting cities building again in the State of the Union, individuals in the direct chain of command to Biden are killing bipartisan pro-housing bills,” Nolan Gray, a city planner and research director for California YIMBY, wrote on X.
