Lawmakers aligned with both housing advocates and homebuilders are close to striking a deal with cities on a proposal designed to help address Arizona’s housing shortage by boosting construction of townhomes, duplexes, triplexes and similar homes in larger municipalities on land now set aside for single family homes.

The proposed deal will require cities who have long opposed the Legislature’s efforts to preempt their authority over zoning rules to allow the smaller, cheaper homes on lots within a mile of the central business districts of larger cities.

The agreement also requires those cities to permit up to 20% of those smaller, multi-family "missing middle'' homes in any home development of 10 acres or more. The compromise will apply to 15 cities that have 75,000 or more residents.

The proposal by Rep. Michael Carbone (R-Buckeye) has been stuck in the Senate for weeks after narrowly passing in the House in mid-March. The delay came amid opposition from the League of Arizona Cities and Towns, the association that works to ensure city interests are heard at the Legislature.

Carbone said in an interview Monday that a final deal is in sight.

"We’re right there with a deal being made,'' Carbone told Capitol Media Services. "We're all trying to get to that last point.”

Carbone said that in addition to boosting housing supply, allowing smaller, in-fill developments like duplexes and townhomes will help small contractors build their businesses. He argues that those firms are now essentially locked out by large, corporate contractors.

The measure could come up for a Senate vote as soon as Wednesday.

Cities initially opposed Carbone’s proposal because it would have required them to allow townhomes, duplexes, triplexes, fourplexes and even fiveplexes on any lot, anywhere in a city, zoned for single-family homes. A Senate committee cut fiveplexes out of the bill, and the new deal covers just those business district and larger developments.

Carbone's legislation, House Bill 2721, is one of many proposals advanced this year as lawmakers work to address the biggest housing shortage Arizona has experienced in recent times. The League, at the urging of Democratic Gov. Katie Hobbs, has been deep in negotiations to try to reach deals on some of the housing proposals.

Hobbs vetoed one of the most far-reaching bills, a measure sponsored by Republican legislative leaders that had bipartisan support they called the Arizona Starter Home Act.

HB 2570 would have overridden local zoning rules and allowed small lots anywhere in larger cities while barring a host of other local rules affecting homebuilding. In her veto letter, Hobbs called it a far-reaching "housing reform experiment'' that had unknown and far-reaching consequences.

She has since signed some housing measures, including one allowing apartments to be built in areas now zoned for commercial and industrial uses after the League eventually backed it.

It mandates cities with a population of 150,000 or more to allow up to 10% of their existing commercial, office or mixed-use buildings to be converted — and torn down, if necessary — to make way for apartments or condominiums without zoning changes or public hearings. The “adaptive reuse” bill, HB2297, says the affected buildings must no longer be commercially viable and allows cities to protect certain business areas from home development.

Cities also backed a measure signed by the governor that requires them to approve or deny any zoning change within six months and to do a housing needs assessment every five years.

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