Arizona’s effort to ease the housing shortage is backfiring, Gilbert officials say — and getting in the way of local planning.

In May 2024, Arizona Gov. Katie Hobbs signed House Bill 2720 into law, which allows up to two casitas on every single-family residential property in cities in Arizona. This bill was meant to create more long-term rental opportunities that would help mitigate the Arizona housing shortage. 

The bill has facilitated an increase in short-term rentals in Phoenix suburbs and frustrated municipal governments. 

It has no components that restrict the use of casitas as short-term rentals, which is what keeps the new houses from helping with the housing shortage, Councilmember Jim Torgeson said. 

“They’ve taken away the zoning and the planning from the municipality and replaced it with a free-for-all,” Torgeson said. 

The law circumvented local city planning. This means that municipalities no longer control the appearance, parking, rental policies or placement of casitas in their communities. 

“People can now see small houses popping up five feet from their property line,” Torgeson said. 

Amber Smith, a Gilbert resident, has already seen new casitas appearing in her community, which has no homeowners association. 

“I know people who have just built casitas to be short-term rentals,” Smith said. “It’s a good way to make a little extra money, but it does not do anything for the housing crisis.” 

Smith said the casitas are primarily built in neighborhoods without HOA’s, because many Gilbert neighborhoods have strict policies against the additional properties. 

Any HOA policy supersedes the state law, Torgeson said. There may be more restrictive policies created in the aftermath of the state law, but it is a challenge to get three-fourths of any neighborhood to show up and vote “yes” on new rules. 

Derrick Land, the president of the Ray Ranch HOA in Gilbert, said he is grateful to lead a community that preemptively had policy in place for property upgrades. Any casita plans have to go through an approval process with the architectural committee, according to the HOA Guidelines and Restrictions. 

“That is how you maintain the feel of a community,” Land said. “When you start to take that away from people, it causes trouble.” 

Cassie Kresin is a student in the Walter Cronkite School of Journalism and Mass Communication at Arizona State University.