S ome thought Scottsdale dodged a housing bullet with some slick maneuvering last year. Throughout 2024, the Arizona Legislature crafted multiple bills aimed at adding to the supply of low- to moderate-income housing. While some were rejected by Gov. Katie Hobbs, several became laws – sending shivers down some Scottsdale spines. One planning commissioner muttered “God help us.” Another worried new housing laws would “create a slum” in Scottsdale. Laws that went into effect this year allowed homeowners (when not regulated by an HOA) to build multiple casitas and commercial property owners to “flip” underused office space to apartments. Councilwoman Solange Whitehead called the housing laws “an assault on our local control and our neighborhoods.” But Scottsdale planners found a workaround. In December, despite a warning from a key state leader, City Council followed its Planning Commission recommendation in approving amendment to the city codes allowing casitas and “adaptive reuse” – but with some key exclusions to the new state laws. The most wide-reaching was a broad interpretation of “in the vicinity of” airports language. Phoenix and other cities pretty much rolled over, saying there was little they could do about the commercial conversion and casitas state laws. But Scottsdale added local zoning wording specifying the housing laws do not apply to homes and properties within roughly a 10-mile radius from Phoenix Sky Harbor International Airport and Scottsdale Airport. The city’s interpretation covers much of the city, including South Scottsdale and Old Town. And Council approved the extreme low end of another provision of the law – saying Scottsdale has to allow only 1 in 100 commercial properties to be eligible for “flipping” from office/industrial to apartments. A joint from Arizona House Majority Leader Leo Biasiucci insisted, “Scottsdale is now in violation of the laws passed in HB2297 (‘adaptive reuse’) and in HB2720 ('casitas’)." Biasiucci and others worked on revisions to the adaptive reuse language this year, with Gov. Katie Hobbs signing the amendments into law April 7. This, in turn, will require the city to revise its “multifamily conversion” code. The city will hold two open houses “addressing recent State of Arizona legislation of HB2110 intended to allow for the adaptive reuse or redevelopment of existing commercial, office, or mixed-use parcels for multifamily residential use.” The first open house is 11 a.m. to 1 p.m. Monday, May 12, at One Civic Center, 7447 E. Indian School Road. The second is 5-7 p.m. Thurssday, May 15, at Mountain View Community Center, 8625 E. Mountain View Road. Last summer, city planner Brad Carr walked the Planning Commission through three housing changes – “Adaptive Reuse,” “The Casitas Law” and “Middle Housing” – that then-Mayor David Ortega and others warned would have horrific impacts on the city. Carr will be leading the open houses on the adaptive reuse changes. With the changes, can Scottsdale stick to its airport exclusions? Carr told the Progress, “It is our understanding that these Traffic Pattern Airspace locations are still exempt from the requirements of the legislation.” One crucial change: the original version of the legislation required cities to allow “up to 10%” of existing commercial, office, or mixed-use land to be converted to multifamily residential housing without a public hearing process. “After analysis, in 2024 Scottsdale chose to allow 1% of the existing commercial, office, and mixed-use land to be converted,” Carr noted. “However, under the new version of the legislation, the state required that a municipality must allow at least 10% of existing commercial, office, and mixed-use land to be converted to multifamily residential housing without a public hearing.” Carr noted the new version “adds additional qualification provisions regarding average sound levels at a qualifying parcel” – with language permitting buildings with measured sound “below 65 decibels.” And there are new guidelines on how building height and density allowances are applied. “The original version of the legislation built building height and density allowances based upon what was currently allowed in residential zoning districts within one mile of the potential conversion site,” Carr said. “The new version of the legislation expands this basis to allow a conversion site to match building height and density for any existing commercial zoning districts within 1 mile of the potential conversion site as well.” That potentially allows developers to build higher. And there are revised definitions for low-income housing and moderate-income housing. With the state changes, cities like Scottsdale must fall in line. Scottsdale guidelines call for public outreach – the open houses – to review zoning amendments.
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