Legislation Puts Local Exclusionary Zoning on Notice

A new bipartisan piece of legislation proposed by Republican State Representative Steve Kaiser and Democratic State Representative César Chávez would, among other items, preempt municipalities from using zoning regulations to restrict residential development and enact ‘zoning by right’ to simplify and accelerate the process for both traditional single-family and multifamily developments around the state.



Bureaucratic opposition or inertia is regularly cited as one of three key factors hindering the construction and development industry’s ability to generate supply at a pace that can address demand, the other two being the ongoing labor shortage and construction materials costs and availability.


As defined by The Community Planning and Land Use Community of Practice, “A ‘use by right’ is a use permitted in a zoning district and is therefore not subject to special review and approval by a local government.”

Major multifamily project proposals have been scrapped or placed on indefinite hold in several cities around the state – including Scottsdale, Sedona and Flagstaff – due to opponents’ invocation of existing zoning regulations and approval bodies’ fear of political backlash. Ironically, Flagstaff has declared an affordable housing crisis but remains one of the most difficult jurisdictions in which to win approval for new projects.



The proposed legislation sets a single standard for ‘by right’ development around Arizona, mandates approval conditions and timelines, limits design criteria restrictions and imposes a process for developers to appeal violations of the new process to Superior Court, which would be barred from evaluating the alleged violation under any criteria except the explicit process set by the statute.

In the week since the legislation was first reported, coverage and discussion has exploded in the media, among developers and construction professionals, and in the various public opposition groups.



Things are Heating up


In my December column, “Organized Resistance a Plague on New Development” (AZBEX, December 3rd,2021), I pointed out that The Arizona Republic, is not an outlet known for quick response in covering large-scale trends. While it may be considered gauche to quote oneself, something I said then bears repeating. “…by the time the Republic takes note of a trend and assigns one of its most senior staff writers to report on it, you can be certain it is an actual, deeply entrenched trend rather than a fly-by-night fad or passing issue.”



Senior Real Estate Reporter Catherine Reagor spent a not insignificant 550-plus words discussing the proposed legislation in a February 3rd article, examining the high-level view and getting input from various area stakeholders on its potential impacts.


Not surprisingly, most housing advocates that have spoken about the proposal have expressed strong support. Municipalities and their supporters, including the League of Arizona Cities and Towns, have been united in their opposition.



The Republic article quoted League Deputy Director René Guillen as saying, “This bill would represent the most aggressive and restrictive zoning preemptions in the country should it pass.” He went on to say, “We are very concerned about legislation that removes decision-making from local elected leaders and their ability to ensure that development fits the needs of the community and surrounding residents.”



As of February 7th, four people, including a representative of the Greater Flagstaff Chamber of Commerce, have publicly declared their support for the bill.



Opponents so far number 91. Nearly 20% of the listed opponents are declared lobbyists for various groups and interests, mostly municipalities around the state.



Zoning a Preferred Tool for Development Opponents


Opponents to residential development, particularly multifamily, have made existing zoning a primary tool in their efforts to thwart new projects. Known as NIMBYs for their “Not In My Back Yard” stance, their reliance on existing zoning ordinances, many of which are decades old, have led to dozens of projects around the state being canceled or put on hold.



In Scottsdale alone, zoning has been used as a criterion to delay and cause multiple revisions to at least three major projects: District at 9400 Shea, 92 Ironwood and Greenbelt 88, which would provide a total of more than 800 new units. District at 9400 Shea and 92 Ironwood would provide additional housing options for the healthcare workers at the nearby HonorHealth facility, and Greenbelt 88 would revitalize a declining, primarily big-box retail location from the 1970s at the corner of Hayden and Osborn roads.



Scottsdale leaders opposed to more dense development have publicly stated the projects will not advance to approval in their current states. District at 9400 Shea was pulled by its developer for additional revisions and may be resubmitted at a later date. Greenbelt 88 has undergone multiple revisions and is scheduled for another hearing this week. Odds of its approval are unlikely.

Developer Dominium has pulled out of one planned affordably-focused housing development in Buckeye and placed another in Surprise on indefinite hold due to opposition from vocal residents and local politicians.



Referring to projects like these and others around the state that have had to go through multiple costly revisions, the Republic quoted Rep. Kaiser as saying, “The single biggest barrier to increasing the housing supply are municipal regulations and restrictive zoning laws which impede growth.”



Opposition, both by individual citizens and organized groups, has been a growing source of delay for project approvals around the state, as local politicians often fear political backlash from vocal minorities of residents. Interestingly, it also appears that the more prosperous an area, the more likely opposition is to be expressed and accommodated.



Hindering Development and Blocking Inclusion


Most people who follow residential development in Arizona have no doubt heard of Larry Kush. Kush served on the Scottsdale Planning Commission for six years and has emerged as an extremely vocal critic of the current City administration’s anti-density policies and reliance on existing zoning as a means to prevent new developments.



In my past columns, I have avoided citing Kush and his frequent opinion pieces in the Scottsdale Independent because he is a polarizing figure, and the very mention of his name tends to bring an abrupt halt to any chance of reasonable discussion with the advocates of the status quo in the administration and the various NIMBY groups. Besides, as the myriad other sources cited in previous columns show, there is a multitude of less controversial and more objective material out there.



So, why bring Kush up now? Because he is one of the few people to bring up some of the more controversial aspects of zoning maintenance in the current debate – particularly economic segregation and racism.



In a November 1st, 2021 opinion piece in the Scottsdale Independent, Kush wrote, “I for one, fear that the time is not far away when Scottsdale will be sued for its disregard and flagrant lack of desire to create an inclusive city over its continued lack of support for multifamily homes.”



He went on to cite a 1981 lawsuit against the town of Huntington, New York for violations of the Fair Housing Act. The claim alleged Huntington refused to allow multifamily housing in an area of town that was primarily White and zoned for single-family residential.

Kush said, “In 1988, the plaintiff won their lawsuit, proving that Huntington not only implemented a policy with a racially discriminatory effect that would have ‘significantly perpetuated segregation’ but also that the alleged reasons for doing so – traffic, parking, and fire problems, and inadequate play areas, among others – were ‘weak justifications.’”



While it is more productive to look at effects rather than to speculate on motives, ever since outright racial segregation was banned at the federal level under the Civil Rights Act of 1968 and the Fair Housing Act, countless studies and investigations have shown zoning restrictions have been used as a less overt means of ensuring that Persons of Color and households with incomes lower than the neighborhood average do not “invade” established areas.



The often-cited development opposition rationales of, “Preserving neighborhood character,” and “Negative neighborhood impacts,” have been repeatedly called out as code phrases for keeping “others” out of a given area. Regardless of whether or not the opposition is racially motivated or merely elitist, a cursory glance at opposition discussion threads on social media sites like NextDoor quickly shows the segregationist mindset.



A casual review will show any number of variations on, “We don’t want cheap apartments in our area,” even though the developments under consideration are rarely, if ever, low-income or even workforce affordable-focused. Remember, more than 90% of apartments delivered to market in Arizona fall within the top two property tiers.



My personal favorite still remains a NextDoor comment I quoted in the column, “Scottsdale’s ‘Otherness’ Undermines Valley Livability’ (AZBEX, December 7th, 2021)” “Hey! If they can’t afford to buy a piece of land and build a single family home in Scottsdale they need to go elsewhere. We do not want cheap apartments in our backyard.”



A January 2021 paper titled, “Zoning and Segregation in Urban Economic History,” published by the National Bureau of Economic Research summarized the issue this way in its abstract: “Recent work has argued that zoning is responsible for racial segregation, disparities in public goods provision, growing regional inequality, and exploding housing costs in productive areas.” It goes on to say, “We also discuss the long-run impact of zoning on the development of cities and highlight the key gaps in our understanding of the role of urban and suburban zoning in fostering segregation within cities and across metropolitan areas. A key lesson from our work in this area is that racial dimensions are important when studying land use regulations, even when the policies in question are ostensibly race neutral.”



A Shot Across the Bow


At this early point in the process, it is too soon to lay odds on HB2674’s chances of becoming law, and unsupported speculation is a bad habit best avoided.



What can be discussed is the evolution of legislation in the American political process. This bill is ambitious in its scope, and ambitious bills have traditionally struggled when initially introduced. Proposals that introduce sweeping changes often fail in their initial outings or become so watered down in the debate and committee processes that their impacts are greatly reduced.


What they do achieve, however, is the introduction of a paradigm shift into the social and legislative thought about the issue in question. As a result, smaller measures are introduced over time, encounter less opposition and eventually can end up having a greater impact on the ultimate issue than the original proposal would have.



The foremost example of this approach in Western history is the U.K.’s Fabian Society. In the late 1800s, socialist reform was gaining ground in Britain, but resistance to grand-scale societal changes was deeply entrenched. The Fabian approach pursued smaller changes on the status quo under the banner of what would today be called “common sense legislation,” and eventually won so many victories that the U.K. is now one of the world’s leading industrialized welfare states.



Leaving aside any value judgments on the merits of socialist policies in a civilized society, the effectiveness of incrementalism as a tactic cannot be disputed. In the U.S. it has been successful in everything from firearms ownership restrictions to the fundamental structure of the healthcare industry, from labor laws to the entire gamut of public safety and environmental regulation.



Historically, legislative and policy bells cannot be un-rung. While Arizona’s traditionally conservative stance on cultural and local autonomy matters has undergone a dramatic liberal shift – particularly in the last decade and largely due to in-migration from dark blue areas like California, New York and Chicago – the fact that this bill was introduced by prominent legislators from both the Republican and Democratic parties is indicative that this has become a matter of importance across the centers of both political leanings. It addresses both the “liberal” drive for affordable housing and inclusion and the “conservative” drives for property owner rights and economic development.



I said it is too soon to predict the outcome of this particular bill. What I will speculate, with better odds than even money, is that something will pass to in some way curtail municipal zoning authority and advance housing development, either in this session or in one soon to follow.



The Republic article quoted Arizona Multihousing Association CEO Courtney Gilstrap LeVinus as saying the bill will help address the Arizona housing supply shortfall but that it would be better if the bill’s backers and cities worked together to address concerns.


That would always be the case in a perfect world, but anti-development politicians and their NIMBY constituents have, so far, shown no willingness to work for consensus.



The shot has been fired across the bow of cities’ outdated and exclusionary use of archaic zoning restrictions to hinder responsible development. The introduction of HB2674 has, in no quiet voice, told them to get their collective act together. Wise city officials will take notice and begin revising their policies to stave off having tighter policies thrust upon them.



In his August 31st Independent opinion piece lambasting NIMBY in Scottsdale, Kush prophetically warned, “We need to make room for our fellow citizens and we need do it ourselves before the state or federal government steps in and does it for us.”



Time will tell if that ship has sailed. Stay tuned.



AUTHOR: Roland Murphy for AZBEX

SOURCE: https://azbex.com/

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