After failing to pass the first home rule into law, Arizona lawmakers advanced two bills that would reduce local control over zoning standards, homeowner associations and contractor licensing — a renewed effort to cut costs amid the state’s housing shortage.
Lawmakers are close to passing a measure that would strip municipalities of much of their authority over the quality of new homes and would eliminate shared resource requirements that would force builders to form home owner associations (HOAs). A second bill would restrict local authorities in addition to contractor licensing requirements.
House approval of either bill will depend in part on how lawmakers respond to pressure from the Arizona Association of Cities and Towns, which lobbied for both measures.
Similar pre-emption laws have passed in other states, often limiting local design standards and, in some cases, linking those standards to HOA and amenity requirements. The Arizona proposal very clearly targeted mandatory HOAs as a cost driver. The licensing law is similar to a Florida law passed in 2021 that preempted local occupational licenses.
Arizona housing advocates and lawmakers want to address years of slow construction as population growth increases. Home prices and rents have risen rapidly. The nonprofit think tank Common Sense Institute estimated the long-term need for 121,000 homes.
Over the past two years, lawmakers have introduced several affordability bills with limited success. The first housing initiative failed twice, mainly due to the opposition of the Federation to the proposals that removed the authority from the local governments.
Design standards and HOAs
The bipartisan group of sponsors behind Senate Bill 1431 says the bill will help lower costs and speed up construction.
The bill would prohibit municipalities from requiring developers to create an HOA as a condition of approval. It would also significantly reduce the area design standards for single-family homes and mixed-use dwellings.
Those rules can cover everything from roof pitch and facade materials to window placement and color palettes. Supporters say the requirements add thousands of dollars to a home’s value and can drive entry-level buyers out of the market.
“Local governments should focus on health and safety, not unnecessary building requirements that drive up prices,” Republican Sen. Shawnna Bolick, the bill’s sponsor, said in a video after it was passed.
On the HOA provisions of the bill, Bolick told Center Square that eliminating mandatory associations would help first-time buyers.
“HOA fees add another few hundred dollars to a first-time buyer’s monthly mortgage,” she said.
The Senate debate foreshadows the conflict to come in the House
During the Senate debate, Democratic Sen. Analise Ortiz agreed, saying that HOA fees could prevent young buyers from becoming homeowners and calling the bill a “common sense measure.”
Democratic Sen. Theresa Hatathlie, who voted for the bill, said she agreed with Republican Sen. Warren Petersen that existing standards would produce the same for new construction.
“As landowners, we need to make choices,” Hathathlie said.
Opponents questioned whether the bill would affect the quality of the area and raise concerns about local control.
Democratic Alliance President Lauren Kuby, who voted against, called the proposal a “equal mandate” that could undermine efforts to build “healthy, civil communities.”
“Cities and towns should retain their ability to require thoughtful design and shared resources, such as a small green space,” Kuby said during the floor debate.
The bill nearly failed, but several senators changed their votes after supporters said the measure could be amended in the House.
Pre-issuance of contractor’s license
Bolick’s Senate Bill 1670 drew little debate as it moved through the Senate. He introduced the bill as a way to increase construction workers and reduce delays.
“When cities require more licenses on top of federal guarantees, it slows down projects and increases labor costs,” Bolick said.
The bill would prohibit a city or county from requiring a person already under a state contractor’s license to obtain a municipal travel license. The primary impact will be on residential or specialty contractors such as drywall, concrete, roofing, fencing, masonry and floor coverings.
The bill would still allow cities and counties to require licenses for plumbing, plumbing, mechanical, HVAC installation, and electrical or alarm system trades.
What’s next
Both bills are subject to change as they proceed through House debates. Or it can stop under the pressure of local governments. Even if one or both succeed, Gov. Katie Hobbs could oppose these measures, as she did in 2024 with the first housing bill that attracted bipartisan opposition.
For builders, the proposals can reduce soft costs and shorten the path from building rights. Looser zoning regulations — and the ability to avoid mandatory HOAs — can give builders more flexibility in product, finish and subdivision layouts.
If the licensing bill evolves, builders and tradesmen can face fewer requirements for each area, making it easier to operate across multiple cities. Over time, large and mid-sized builders can cut the overhead tied to local compliance, increase buyer choice, and bring entry-level homes to market as quickly as deals pencil out.
