Old wounds and new priorities for a COVID-focused Legislature

Lawmakers resume last year’s legislative efforts while addressing the ongoing pandemic

By Jake Hinman and Bastien Andruet

With the 2021 Arizona legislative session in full swing, lawmakers have introduced an overwhelming 1,800 bills and resolutions.

Despite all else with the pandemic, affordable housing has proven to be one of the focal points of the Legislature this year, with multiple bills attempting to increase housing supply and funding.

Unfortunately, we have also seen an inordinate amount of bills aimed at the rental housing industry, including proposals to enact statewide rent control in Arizona. Fortunately, the AMA was able to ensure that all these harmful bills never progressed through the process.

Affordable housing remains AMA top priority

Picking up where last session left off, the AMA is focusing its legislative efforts on creating new tools and incentives for the production of new affordable housing units. In tandem with longtime allies at the Legislature and partners in the private sector, the AMA has helped author and champion a bill establishing a state LIHTC.

State Rep. Regina Cobb (LD-5) introduced HB2562, with State Sen. David Gowan (LD-14) introducing the Senate version, SB1327, an act to create an Arizona state LIHTC that mirror’s the federal program established by President Reagan in 1986.

The national LIHTC program has been responsible for constructing or renovating almost 3 million housing units nationwide, financing almost 45,000 units in Arizona alone since 1987. With a foreclosure rate of less than 1 percent for these properties, LIHTC financing has been proven as an effective public-private partnership tool, creating jobs for builders and housing for low-income residents hurt the most by our state’s dangerously low stock of housing supply.

As hundreds of families move into the state of Arizona on a daily basis, more than 150,000 units of housing will need to be built by 2030 to match demand, and our current pace of development is consistently falling short. In the time of COVID, the state has experienced no stoppage in the influx of out-of-state residents, as remote workers seek more affordable cities than New York, Los Angeles, and Chicago in which to live.

Innovative solutions to our supply crisis, such as this state LIHTC program, will be Arizona’s best bet for providing housing for residents of all socio-economic status.

Virtual court on its way to becoming permanent

The AMA is also focusing its efforts to ensure that virtual court becomes permanent in the state for all eviction-related cases. Sen. Warren Petersen introduced SB1322 that will allow all parties, attorneys and witnesses to appear remotely via videoconference or telephone.

For rental owners, remote proceedings allow witnesses, including property management staff, police officers or neighbors, to carry out their normal day-to-day functions rather than taking time to make a court appearance in person.

Bills aimed at rental housing industry fail to move

Continuing their efforts from last year, state Sens. Juan Mendez (LD26) and Martin Quezada (LD-29) introduced a slew of bills targeting the multifamily housing industry. Modeled after policies enacted in Oregon and California in 2019, the bills seek to impose artificial price controls, significantly increase the number of documents and steps

Mendez’s SB1691, and Quezada’s SB1611, both establishing a statewide rent control, never even received a hearing in committee. Quezada’s SB1610, attempting to create a “source of income” protected class, as well as his SB1612 attempting to pass “for cause” eviction legislation eliminating non-renewal provisions, also failed to move forward.

Similarly, Sen. Mendez’s attempts to repeal the statewide prohibition on inclusionary zoning, SB1657, and his attempts to further unbalance the Landlord-Tenant Act by mandating 30- and 60-day rent increase notices with SB1692, never made it out of committee.

Other bad bills aimed at the industry

Quezada also introduced two COVID-related bills – SB1607 imposing a statewide rent freeze until 30 days after the termination of the declared state of emergency, and SB1608, mandating property owners allow at least six months for tenants who have received relief from eviction “as the result of federal law, presidential executive order or state executive order,” to pay any unpaid rent once the federal or state relief from eviction expires. While able to gain the support of fellow Senator Mendez, the bills thankfully went nowhere.

Sen. Kirsten Engel’s (LD-10) bills aimed at the industry lost momentum as well, with her SB1665 barring a landlord from evicting a tenant if any form of partial payment or “housing assistance” is accepted or received by the property owner, as well as her bill SB1663, seeking to seal any and all eviction records, including filings, pleadings, and judgments, through June 30, 2022, retroactive to March 11, 2020, both hit their “committee chair walls” and failed to proceed to a hearing.

Likewise, Engel’s other three bills aimed at the industry also failed to receive committee hearings. SB1038 seeking to increase the five-day notice to a 15-day notice; SB1134, repealing a statutory prohibition the AMA passed several years ago on counties and municipalities from requiring an owner, operator or tenant of a business, commercial building, or multifamily housing property to measure and report energy usage and consumption; and SB1664 repealing another AMA bill passed several years ago pre-empting the courts from mandating that all property owners use court-created forms for all eviction actions, notices, and pleadings all died this year at the Capitol.

Jake Hinman is the Director of Government Affairs for Capitol Consulting. He can be reached at 602-712-1121.

Bastien Andruet is a Municipal Lobbyist for Capitol Consulting. He can be reached at 602-712-1121.