Restrictive housing policies hold Arizona cities prisoner. Gov. Hobbs can free them

After several sessions where legislators struggled to agree on any substantial legal remedies for our worsening housing problem, suddenly the dam has broken. We have a bipartisan majority for reform.

It’s none too soon.

The one bill that passed both chambers was vetoed by Gov. Katie Hobbs. But seven others have passed in either the House or the Senate, and others are under consideration.

Among bills that have passed one chamber:

• House Bill 2297 and Senate Bill 1506 relate to allowing new apartments on commercially zoned lots. 
• HB 2720 and SB 1415 permit backyard casitas and garage apartments (accessory dwelling units, or ADUs) on single-family home lots. 
• SB 1665 streamlines permitting approvals.
• HB 2815 allows churches to build affordable housing on their properties.
• HB 2584 allows building materials of any kind and prefabricated buildings as long as they meet national code standards.

When 1 city clamps down, we all suffer

You might wonder why some of this was ever illegal. Mainly, it’s because our metropolitan areas are divided into smaller municipalities, creating what economists call a “prisoners’ dilemma.”

If each agrees to generous housing policies, regional rents stay low, newcomers can move here and most neighborhoods change only slowly.

But when a single municipality clamps down on new housing to limit crowding or ensure that only wealthy newcomers can move in, nearby municipalities must accept a little more of the change, growth and growing pains.

One municipality gains at everyone else’s expense.

So, over the last century, every municipality has tried to do just that.

Affordability suffers everywhere. That’s the prisoners’ dilemma: Everyone aiming for local perfection at everyone else’s expense becomes the enemy of everyone’s “good.”

Affordable housing solutions aren't hard

For decades, we skated by. There was always a hay field or orange grove on the horizon where nobody would object to who the new neighbors would be.

We could avoid the slightly uncomfortable, but ultimately edifying, process of real city building as each city played the defector in the prisoners’ game.

We can’t do that anymore. We’ve used up the easy outs. It’s time to build a mature city.

The solution isn’t that hard. Apartments along the light rail line here. An ADU there. Fit in a couple townhomes over there.

In most neighborhoods, we might barely mind the changes. If everyone does it, neighborhoods won’t suddenly become slums.

In fact, slums are what the prisoner’s game gives us. Have you tried finding a park lately that isn’t scattered with litter from the game’s unhoused victims?

Why Arizona lawmakers must step in

It’s tempting to instead imagine new standards abused and neighborhoods drastically changed. And, yes, some of those new fourplexes might have questionable paint-color choices or pop up near statelier homes.

But overall, the reforms don’t fundamentally change our zoning system — they mainly soften some hard edges.

Put it this way: We all want an affordable, welcoming city and some control over our surroundings. For decades, only the latter demand has been well represented.

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It’s time to let the policy pendulum swing back a bit in the other direction. The moral weight and necessity of these competing demands is too far out of balance.

No single municipality can do this on their own.

The state alone can reinstitute a generous housing policy so that every city allows some growth and the entire area shares in a gentle urbanization that keeps rents low, change manageable, and our neighbors out of tents and in homes.

Despite a veto, we must keep working

Unfortunately, Gov. Hobbs vetoed HB 2570, which would have limited municipalities from requiring exceedingly large lot sizes or homes, excessive street-setback distances, onerous design review processes and homeowners’ associations for new developments.

Hobbs said the bill was “not the right step for our state” but also left the door open for other legislative efforts, noting that she supports “ongoing efforts in the Legislature to reach a more balanced solution on other reforms that are still moving through the process, including proposals related to accessory dwelling units (ADUs, also known as casitas), missing middle housing options, commercial repurpose and reuse, and streamlining local approval processes.”

If we all agree to reforms that will allow ADUs and apartments in more places or add a few feet to building-height maximums and lot dimension minimums, we will save lives shattered by double-digit rent inflation, displacement and homelessness.

The pros clearly outweigh the cons. Some reform requires difficult compromises. And some, like these, require coordination more than compromise.

Our city council members won’t stop it. That’s OK. They are the prisoners in this dilemma.

We need state-level leaders, free from this coordination problem, to make what should be easy decisions.

Kevin Erdmann, a Gilbert resident, is a senior affiliated scholar with the Mercatus Center at George Mason University. He writes at the Erdmann Housing Tracker. Reach him at kebko@yahoo.com.