Maximizing the Impact of HB2721: A Bold Approach for Phoenix Zoning Reform
Arizona’s HB2721—known as the “missing middle” housing bill— passed on May 15, 2024, and mandates that all cities over 75,000 residents allow duplexes, triplexes, fourplexes, and townhomes on residential lots within one mile of their central business district (CBD) by January 1, 2026.
For Phoenix, this presents a rare opportunity to make progress on multiple challenges at once: housing affordability, infrastructure efficiency, climate resilience, and long-term fiscal stability.
The City of Phoenix’s newly expanded CBD. (Credit: City of Phoenix/Phoenix Business Journal)
An Expansive View of “Within One Mile”
To fully realize the potential of HB2721, Phoenix should interpret "within one mile of the CBD" as encompassing all areas that extend one mile beyond the full boundary of the city’s recently expanded CBD, through to the next furthest arterial. This inclusive and geographically logical approach would ensure that zoning reforms reach some of the city’s most transit- and amenity-rich neighborhoods, and that these zones be easy to identify (arterial streets would fully border the rezoned area).
Targeting these areas of Phoenix’s core for infill development would maximize beneficial outcomes for the economy, environment, and equity.
Smart Infill Strategies for a Growing City
Permitting more housing growth in Phoenix’s core supports both the city’s sustainability and housing affordability goals. The closer Phoenicians live to downtown, the fewer cars they own and the less they drive. Concentrating new home development in the core also reduces emissions and congestion while boosting transit ridership. Infill housing additionally strengthens the tax base while minimizing added liabilities, unlike development on the urban fringe. Every additional housing unit built near downtown Phoenix means one fewer home carved into sensitive desert land far from jobs, schools, and transit.
Setting a target of 20 dwelling units per acre, the threshold for walkability, within the HB2721 zone will unlock neighborhood-scale business viability over time, benefiting local entrepreneurs and retail competition. This threshold can be easily achieved with a mix of two and three-story apartments, townhomes, fourplexes, and accessory dwelling units, blending seamlessly into established neighborhoods while minimizing underutilized land. Since downtown has the highest concentration of jobs in the Valley, there is no other area of Phoenix that can accommodate as many new residents while minimizing added wear and tear to our roads and the need for future road expansions.
The Fiscal Case: Build More, Spend Less
Phoenix faces budget shortfalls and escalating infrastructure maintenance costs. Neighborhoods characterized by one- and two-story homes on 6,000-square-foot lots, mandated by our current zoning codes, are expensive to serve and contribute little in tax revenue per acre. These areas require more extensive road, sewer, and utility infrastructure per resident and encourage car trips. In many cases, such neighborhoods are a net-negative on a city’s balance sheet, with the corresponding losses being offset only by more space-efficient downtown neighborhoods.
By increasing the number of housing units per acre in already developed areas, Phoenix can raise revenue while limiting new public expenditures, improving its balance sheets. Zoning reform isn’t just a housing solution—it’s a fiscal strategy. Every additional unit downtown lightens the load on city resources.
Historic Neighborhoods Can Lead the Way
The Fontenelle House in downtown Phoenix. (Credit: historicphoenixdistricts.com)
Historic neighborhoods within the expanded boundary should be viewed not as exceptions, but as assets. Many of Phoenix’s most cherished historic districts already feature high-quality multi-unit buildings, such as The Fontenelle fourplex and the Knickerbocker Apartments, that demonstrate how smart land use and design excellence can coexist. These structures enhance neighborhood charm while contributing to walkability and boosting housing supply.
With thoughtful design standards and collaborative input from historic neighborhood boards, Phoenix can ensure that new development in these areas complements existing aesthetics and invites long-time residents to return to the urban core. Historic districts can be leaders in demonstrating how gentle infill supports both preservation and progress.
Encouraging Homeownership in the Urban Core
Today, 84% of residents in the Phoenix Downtown Redevelopment Area are renters. To promote long-term community investment, state and local leaders should complement HB2721 with policies that encourage condominium development and ownership opportunities. Nationwide, legal liability risks have discouraged condo construction, but Arizona can chart a different course.
One approach would allow developers to opt into stricter construction and materials standards in exchange for either a modest reduction in the statute of repose (from eight to six years), the right to build more units per parcel or both. Since the City of Phoenix now offers reasonably priced monthly parking rates in its downtown garages, adding parking flexibility can allow more condo projects near these structures to pencil out.
These reforms could reduce insurance premiums and unlock financing for more condo projects. Additional measures might include explicit warranties, "right to repair" provisions, or requiring HOA approval before litigation. Expanding condo development in the core would also reduce demand for build-to-rent single-family detached homes while allowing more families to benefit from downtown's rich amenities.
Building Codes for Urban Quality of Life
As Phoenix continuously updates its building code, city leaders should prioritize aligning construction standards with the goal of enabling high-quality, family-sized multi-family housing in the urban core and along major transit lines. Builders adding more units per parcel should be required to meet quality benchmarks that ensure safety, efficiency, and livability.
For example, fire-rated walls can practically eliminate sound transfer between adjoining units while enhancing fire safety, all with minimal impact on construction costs. The national single-stair reform movement also offers insight: single-stair buildings are just as safe as their double-stair counterparts, and they enable more housing units on smaller lots. By incorporating these modern best practices, Phoenix can update its code to support infill while maintaining high standards for livability.
Stormwater Solutions as Lot-Coverage Alternatives
For decades, Phoenix has used strict lot coverage limits, requiring around 35% of each parcel to remain undeveloped, as a means to reduce stormwater runoff from individual properties. However, advances in green infrastructure, such as porous pavement and high-capacity infiltration basins, now offer more flexible and effective ways to manage runoff. By allowing more building area per lot in exchange for on-site stormwater mitigation, Phoenix can support more well-located housing while still protecting public drainage systems.
Conclusion: A Smarter Path Forward
HB2721 provides Phoenix with a rare and vital opportunity to reshape its growth model. By expansively defining the CBD-related rezoning boundary, setting a 20 dwelling unit per acre benchmark therein, partnering with historic neighborhood boards, and modernizing its zoning and building codes, Phoenix can build a more affordable, sustainable, and economically independent future.
The status quo has left the city with a housing crisis and a growing budget gap. This mandate is a chance to turn the page. Phoenix should lead the way with bold, thoughtful reforms that meet the needs of today and tomorrow while reducing reliance on unpredictable federal resources.
Let’s Make It Happen
Residents can voice support by contacting their council member via their form or email address on the city website. Share an opinion in person by attending a Planning Commission, Village Planning Committee or Council meeting.
