Lawmakers, cities and others are negotiating bills to alleviate Arizona's housing crisis

Negotiations brokered by Gov. Katie Hobbs over possible legislation to alleviate Arizona's housing crisis have been underway since she vetoed a bill intended to foster construction of lower-cost starter homes in March.

Why it matters: The state faces a shortage of 270,000 housing units, according to a 2022 report by the Arizona Department of Housing, while rising prices have made available homes unaffordable for many Arizonans .

Catch up quick: Hobbs in her veto letter called the starter homes bill, which would've prohibited cities from requiring certain aesthetic and design features on single-family homes and barred mandates that people form homeowners associations, "a step too far."

• She said she was optimistic about separate legislation promoting accessory dwelling units and "middle housing" like duplexes, triplexes and townhomes.
• But Hobbs at the time said she didn't think her involvement was necessary in any discussions about housing legislation.

The latest: Lawmakers and representatives for cities, homebuilders, Realtors and others have held multiple meetings to discuss possible legislation, which they hope to pass before the session ends.

• Rep. Michael Carbone (R-Buckeye) told Capitol Media Services he's close to a deal on his bill to increase middle housing in larger cities.

Zoom in: While Hobbs facilitated the meetings, her administration's role has been more of a "referee between opposing sides," said Tom Farley, a lobbyist for the Arizona Association of Realtors, which supported the vetoed legislation.

• The administration hasn't made any proposals or worked to shape potential legislation.

Between the lines: Passing a starter homes bill will "take some give by local governments to give up some of their existing authority," Farley told Axios.

• Rep. Leo Biasiucci (R-Lake Havasu City), who sponsored the starter homes bill, said they're in "middle zone" discussions, figuring out what cities, the governor and other stakeholders can agree on.

The other side: The League of Arizona Cities and Towns, which adamantly opposed the vetoed bill, wants to ensure any legilslation that comes out of the discussions is "narrowly tailored" and doesn't grant a "blanket entitlement" to developers statewide, lobbyist Nick Ponder, who represents the league, told Axios.

What's next: Over the past few weeks, the debate over repealing Arizona's pre-Roe abortion ban has put housing and other issues on the back burner.

• The next meeting on housing is scheduled for Wednesday, Rep. Analise Ortiz (D-Phoenix) told us.

Reality check: Participants know they face a ticking clock and it could be difficult to get an agreement before the legislative session ends — which could be any time before the end of June, depending on when a budget is passed.