Changes to Arizona 'casita' law denied by committee

PHOENIX — Arizona House lawmakers have rejected a Republican colleague’s proposal to let homeowners or developers pack even bigger “auxiliary dwelling units” in the yards of single family homes than now — and move them closer to the lot lines of their neighbor’s properties.

The proposal by Rep. Khyl Powell, R-Gilbert, would have been a major change to a 2024 law requiring cities with populations of at least 75,000 people to allow owners to build up to two casitas or ADUs on their lots.

But it was a step too far for a majority of the 18 members who make up the House Appropriations Committee, with Powell’s proposal failing by one vote Monday. The vote came after members heard testimony from homeowners and a lobbyist for the League of Arizona Cities and Towns opposing Powell’s bill.

Most cities changed their zoning rules to allow at least one backyard unit when the 2024 law was enacted. That did not satisfy proponents who cited Arizona’s housing shortage and high home and rent costs to push for the change.

After contentious negotiations, the Legislature passed and Gov. Katie Hobbs signed the new law requiring 16 larger Arizona cities to allow one attached and one detached ADU. Cities were allowed to limit their sizes to 1,000 square feet or 75% of the main home’s size, whichever is less. And it blocked cities from requiring that newly built casitas to be set back from a lot line by more than 5 feet.

Powell’s bill, House Bill 4028, would have eliminated the 1,000 square foot limit while retaining the 75% size restriction.

That would mean that a 3,000 square foot home could build auxiliary dwelling units as large as 2,250 square feet. And it removed the maximum 5 foot setback limit.

Powell said his proposal would not let new units be built any closer to fence lines, but the League’s lobbyist and several homeowners disagreed, saying removing that prohibition could force cities to allow new housing to be built as close as possible to a neighbor’s property.

Powell said he wants to give homeowners the ability to build units that accommodate large extended families, put the new units in good locations on their lots and design the home as they want.

“So we’re simply asking for the towns to allow us to have some more considerations, other than restricting us to limitations,” Powell told the committee. “We’re also asking that the town allow us to build the elevation or the outside appearance of the home the way we want.”

Nick Ponder, the League’s lobbyist, said his group opposed the proposal because it is a major change from the 2024 law that was the result of two years’ negotiations. He said the 1,000 square foot size limit on ADUs wasn’t arbitrary as Powell contends.

“That number was put in there for a reason, and that is to ensure that that dwelling unit is an ‘accessory’ to the main dwelling unit,” Ponder told the committee. “And I will point out that Arizona, what we did in 2024, we have some of the most permissive ADU legislation in the country.”

In addition to allowing homeowners to build two ADUs “by right,” 1-acre properties can construct as many as three.

Besides removing the setback requirement, which Ponder said could theoretically allow someone to build right up to the property line, Ponder also noted Powell’s proposal removes the ability of cities to limit “elevation.”

“Elevation means height,” Ponder said.

No lobbyist or member of the public spoke in favor of Powell’s proposal, while three Phoenix-area residents involved in their neighborhood associations spoke against it, raising concerns about overly large ADUs that dwarf nearby homes, blocking out views or simply making neighborhoods much more dense for the benefit of “speculators and flippers.”

“I see it as an unbridled limit,” said Paul Davenport, a board member of a neighborhood association in east central Phoenix. “If you have a big house, you get a nearly as big, large ADU. And I think a 1000-square-foot ADU is a realistic size.

“That’s several rooms, and an ADU is designed for maybe a couple of people, like a married couple, for instance, or maybe adult child or grandparent,” he said. “And a couple rooms would suffice for that kind of auxiliary housing.”

The bill did get support from some Republicans who believe property rights trump the concerns of opponents.
While acknowledging concerns about investors and saying Powell’s proposal needs work, Rep. Nick Kupper, R-Surprise, said he was backing it because he agrees with the underlying sentiment that a property’s owners should allowed to develop their land as they see fit.

“I do believe private property rights are different between an individual who owns and lives in the house versus a corporation,” Kupper said. “But if you own and live in the house, my philosophy is do whatever the hell you want with your property.”

Fellow Republican Rep. Quang Nguyen said he disagreed, noting that when he chose his Prescott Valley home in 2024 he signed onto the town’s zoning laws and homeowner’s association rules.

“As much as I dislike HOAs, I agree to the rules, I agree to the town of Prescott Valley zoning laws, and I agree to everything, because I want that perfect home in the perfect neighborhood for my kids and my wife,” Nguyen said.

“And so I certainly at this point, I don’t want the state to be able to go in and change that dynamic that was perfect for me,” he said. “So yeah, I agree you have private property rights, but we all agree that this is the neighborhood we want to live in.”

The 2024 law and any potential proposal won’t affect HOAs because those are private contracts the state can’t override.

Rep. Walt Blackman, R-Snowflake, said he worried that making Powell’s change in the 2024 casita bill would open the door for other changes, including lowering the population threshold and eventually affecting the small rural towns he represents.

“We’re talking about phases,” he said.

“Right now it’s 75,000 (population),” Blackman said. “The next phase it could (be) lower based on us opening the door and doing this with this particular piece of legislation. And I don’t want to sign onto a bill that could potentially hurt a smaller community down the road.”

Rep. Nancy Gutierrez, D-Tucson, said she’s glad the Legislature passed the 2024 casita bill considering the state’s housing crisis. But she said she could not support Powell’s proposal because she believes zoning is a matter of local control and because much larger ADUs could change neighborhoods and potentially lead investors to buy up homes, split the lots and build multiple units.

“We do have an affordable housing crisis in Arizona, but this bill does not speak to that,” she said. “This creates chaos in the neighborhoods, and it just gives the developers another way to make money.”

The final vote against Powell’s bill was 8 in favor and 9 opposed, with one member absent. At this point in the legislative session, Powell’s chances of reviving the measure are few, if any.