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Feb. 12—There are two points of view on Arizona's housing crunch and how to fix it. State legislative leaders see it one way, but city leaders see it completely different.
The problem for the cities is that state law trumps their approach, Chandler leaders say.
The Arizona Department of Housing estimated the state was short 270,000 housing units of what it needed in its 2022 annual report. That need continues to grow.
The U.S. Census estimates over 77,000 people moved to Arizona than left the state in 2022. All that demand and a limited supply is one reason the cost of housing continues to rise.
Senate President Warren Petersen, a Gilbert Republican, said cities themselves are holding housing back, blaming lengthy delays in approving new developments, impact fees, and design reviews for increasing developer costs.
"Government has been the problem, particularly local governments," Petersen told the Capitol Times. "This problem becomes bigger and bigger every time local government starts restricting builders from building."
City leaders say not true.
"Despite Senator Petersen's remarks on the inadequate housing — which we're building a lot — we're building a lot," Chandler Mayor Kevin Hartke said.
Hartke is vice president of the Arizona League of Cities and Towns — which opposes Republican efforts to reduce municipalities' regulatory power over residential development.
Hartke, who will become the league's president next year, said, "I read an article that stated the Phoenix region was adding more multi-housing than any other region in the United States right now.
"We have a lot of projects that we have approved in Chandler."
Hartke said the holdup in getting those plans off the blueprints and into neighborhoods is the financing.
The city says it has approved 2,460 multifamily units and 235 single-family homes to be built as of Jan. 7, but so far, construction has not started.
More than a year ago, City Council approved the Downtown District, a multi-use project planned for the southwest corner of Pecos Road and Arizona Avenue. Part of that plan includes 800 apartment units.
No construction has started on that site yet. Part of the plan included 364,000 square feet of office space. The market for office space has changed dramatically since the pandemic, when many employees started working from home.
Another major housing development the city has approved is One Chandler at the southeast corner of Arizona Avenue and Chandler Boulevard. That building in the heart of downtown includes nearly 300 new apartment units.
Council approved that project, which will also include office space and retail stores, in August. The city says it expects a groundbreaking there later this year.
There are also big multi-housing projects approved outside of downtown. In September, Council approved a 345-unit complex at the southwest corner of Arizona Avenue and Queen Creek Road called Chandler Farms.
The city has a lack of affordable housing. Apartments.com reports there are more than 2,000 units available in the first week of February, but the average cost for a one-bedroom unit is more than $1,500 a month.
To address the housing crunch, state legislators are considering bills HB 2570 and SB 1112. These would prevent cities and towns from setting minimum lot sizes and requiring setbacks of more than 5 feet on new developments. The bills would also bar cities from setting minimum square footages for new homes.
The bills would also prevent municipalities from requiring specific designs or aesthetic elements and from requiring homeowner associations, common walls or landscaping.
The city issued a statement in response: "We have concerns with any proposal that seeks to take away the right of our City Council and the residents to have input on shaping how our community is built."
Hartke added, "If everything passes, it would basically preempt our ability to say what's the best use on a redevelopment project but it also, by right, allows multi-housing pretty much anywhere where there is a single-family development now, which really contains the whole matrix of a neighborhood."
Chandler is at 94% of build out, meaning there is very little land left to build new housing. Most of what land there is available has been reserved for business growth to bring more jobs to the city.
Hartke said most of the housing projects the city will see in the coming decades will involve redeveloping properties. While the bills focus on new construction, it will also impact Chandler in its efforts to redevelop properties, he said.
A similar bill came up in last year's legislative session and Hartke said they were able to negotiate a compromise. He continues to push for that.
"If someone came in for a redevelopment project ..., it gives cities the ability to decide if this is a good idea," Hartke said. "It changes that tax structure so that basically it reduces the tax load for a limited amount of time. That would kind of recoup the cost of redevelopment."
Essentially the city's proposal is for tax incentives to developers to help them obtain the financing they need to start construction. Then a city could turn a vacant shopping center, such as the one at Alma School and Warner roads, into housing.
"I'm not sure ... this is going to get through this year or not, but it's that type of idea," Hartke said. "That's a great idea that we are trying to come to the table to say, 'We're not your enemies when it comes to housing. We want more housing.'"