Lawmakers Target Local Fees Driving Up Arizona Home Prices

The Arizona House of Representatives approved bipartisan House Bill 2946 on Wednesday, a measure sponsored by Representative Khyl Powell (R-AZ) that aims to slash local government fees that inflate new home prices and sideline working families from homeownership.

The bill advances the House Republican Majority's affordability agenda by tackling one of housing's highest hidden costs: development fees passed directly to buyers.

“Arizona families are being priced out of homeownership, and government-added costs are part of the problem,” Rep. Powell said. “HB 2946 is a bipartisan, commonsense reform that helps make housing more affordable by bringing clarity and consistency to fee collection, reducing uncertainty, and stopping unnecessary local cost pressure from being passed onto working families trying to buy a home.”

HB 2946 boosts predictability for developers by redefining "grandfathering" protections. Currently tied to the first building permit, which can delay projects for years, the bill links it to 24 months after a new or increased fee ordinance passes, streamlining construction timelines.

The legislation also curbs excessive fees on accessory dwelling units (ADUs). Water and wastewater charges would reflect actual infrastructure needs based on meter size differences, while all other fees would cap at the lesser of 20% of a single-family home fee or the ADU's fair share. This ensures costs match real impacts.

“HB 2946 will not solve every housing affordability challenge facing Arizona, but it addresses a problem the Legislature can directly control: local government costs that make housing more expensive before a family ever gets the keys,” Powell added.

National Crisis

The push comes amid a national cost-of-living crisis, with a February 2026 Current survey finding 38% of Americans (51% of Gen Z) relocated due to high expenses.

Arizona ranks middling at #25 least affordable (41% of residents call it affordable), trailing neighbors like New Mexico (40%) but ahead of California (27%) and Nevada (24%). Top affordable states include Mississippi (62%), Alabama (61%), and Oklahoma (60%).

With Arizona facing a shortage of 131,000 affordable homes for low-income households, will HB 2946's journey through the Senate deliver the relief working families need?