After failing to turn starter-home legislation into law, Arizona lawmakers are advancing two bills that would curb local control over design standards, homeowners associations and contractor licensing – a renewed attempt to chip away at costs amid the state’s housing shortage.
Lawmakers are close to passing a measure that would strip municipalities of much of their authority over new-home aesthetics and would end shared-amenity requirements that can force builders to create homeowners associations (HOAs). A second bill would limit local authority over contractor licensing requirements.
House approval of either bill will depend in part on how lawmakers respond to pressure from the League of Arizona Cities and Towns, which is lobbying against 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. Arizona’s proposal more explicitly targets mandatory HOAs as a cost driver. The licensing legislation mirrors a Florida law enacted in 2021 that pre-empted local occupational licensing.
Arizona housing advocates and lawmakers have sought to address years of underbuilding as population growth accelerated. Home prices and rents climbed quickly. The nonprofit think tank Common Sense Institute has estimated a long-term need for 121,000 homes.
Over the past two years, lawmakers have introduced multiple affordability bills with limited success. A starter-homes measure has failed twice, largely due to League opposition to proposals that shift authority away from local governments.
Design standards and HOAs
A bipartisan group of sponsors behind Senate Bill 1431 says the bill would help lower costs and speed up construction.
The bill would bar municipalities from requiring developers to form an HOA as a condition of approval. It also would sharply limit local design standards for single-family homes and accessory dwelling units.
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 the price of a home and can push entry-level buyers out of the market.
“Local governments should focus on health and safety, not unnecessary architectural requirements that drive up prices,” Republican Sen. Shawnna Bolick, a sponsor of the bill, said in a video after it passed.
On the bill’s HOA provisions, Bolick told The Center Square that eliminating mandatory associations could help first-time buyers.
“HOA fees can add another few hundred dollars onto a first-time homebuyer’s monthly mortgage,” she said.
Senate debate signals friction ahead in the House
During the Senate floor debate, Democratic Sen. Analise Ortiz spoke in favor, saying HOA fees can block younger buyers from homeownership 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 can produce sameness in new construction.
“As property owners, we need choices,” Hatathlie said.
Opponents questioned whether the bill could affect neighborhood quality and raised local-control concerns.
Democratic Sen. Lauren Kuby, who voted against it, called the proposal a “one-size-fits-all mandate” that could undermine efforts to build “healthy, social communities.”
“Cities and towns should retain their ability to require thoughtful design and shared amenities, like a small green space,” Kuby said during the floor debate.
The bill nearly failed, but several senators switched their votes after supporters said the measure could be amended in the House.
Contractor licensing pre-emption
Bolick’s Senate Bill 1670 drew less debate as it moved through the Senate. She has framed the bill as a way to expand the construction workforce and reduce delays.
“When cities require extra licenses on top of state credentials, it slows projects down and raises labor costs,” Bolick said.
The bill would prohibit a city or county from requiring someone who is already subject to state contractor licensure to obtain a municipal journeyman license. The primary impact would be on residential or specialty contractors such as drywall, concrete, roofing, fencing, masonry and floor covering.
The bill would still allow cities and counties to require journeyman licenses for plumbing, pipe fitting, mechanical trades, HVAC installation, and electrical or alarm-system trades.
What’s next
Both bills could change as they move through House deliberations. Either could stall under pressure from local governments. Even if one or both pass, Gov. Katie Hobbs could veto the measures, as she did in 2024 with a starter-homes bill that drew bipartisan opposition.
For builders, the proposals could reduce soft costs and shorten the path from entitlement to construction. Looser design rules — and the ability to avoid mandatory HOAs — would give builders more flexibility on product, finishes and subdivision layouts.
If the licensing bill advances, builders and trades could face fewer jurisdiction-by-jurisdiction requirements, making it easier to work across multiple cities. Over time, larger and mid-sized builders could trim overhead tied to local compliance, expand buyer choice, and bring entry-level homes to market faster when deals pencil out.
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