Progress Around the Edges & The Work Ahead (Blog)

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July 30, 2026
Authors: Nicole Newhouse (Executive Director, AZHC) & Austin Bates (Public Policy Analyst, AZHC)

Arizona Housing Coalition’s recap of the 2026 legislative session—what passed, what didn’t, and how the state session, a new federal housing law, and the July primary shape the work ahead.

The 2026 legislative session is over. The housing work is not.

Arizona got closer than it has in three years to passing a version (rural) of the Low-Income Housing Tax Credit (LIHTC), then watched the bill die without a Senate hearing or a place in the budget. The Legislature approved narrower measures involving infrastructure, eviction records, reentry, treatment, and veterans. The Coalition stopped every bill it formally opposed. Arizona still ended the session without the major housing investment or statewide prevention and coordination systems it needs.

Then two other things happened. The 21st Century ROAD to Housing Act became federal law. Arizona held a primary election with turnout tracking near 26%—the lowest rate since 2008. The general election is still ahead, but the people, alliances, and arguments that will shape the 2027 session are already changing.

The state record, the new federal law, and the primary results have to be read together. They tell us what changed, what’s unfinished, and where the Coalition has work to do before another bill is filed.

How We Chose the Work

Housing instability rarely begins on the street. It begins when rent outruns a paycheck, an eviction record blocks the next lease, someone leaves foster care, prison, a hospital, or treatment without a safe place to go, or even when a small town has land for housing but not the water line or roaded needed to serve it.

Policy debates often split those problems apart. The Coalition organized its work around three connected parts of one housing system: affordable housing, prevention, and homeless response. That is why we screened 405 bills—not only those with “housing” or “homelessness” in the title.

The Session in Plain Numbers

Lawmakers introduced 2,030 bills this session. The Coalition screened 405 for their effect on housing stability, narrowed the field to 31 bills for close tracking, and took 13 formal positions: seven in support, five in opposition, and one amendment request.

Thirteen is not the number of bills we read, discussed, monitored, or worked to improve. A formal Coalition position requires policy review, member and partner input, sponsor and committee meetings, testimony or Request to Speak work, amendment analysis, vote counting, and follow-through in both chambers and the budget. We concentrated that effort where the bill directly affected our priorities and Coalition involvement could change the result.

All five bills we opposed failed. One of the seven bills we supported became law. Another 55 housing-related bills among the 405 we screened also became law without a formal Coalition position. Those numbers show a strong defensive record and a much weaker record on adding the funding, production, prevention, and coordination tools Arizona still lacks.

The Biggest Unfinished Item: State LIHTC

Arizona tried again to restore a state Low-Income Housing Tax Credit. The statewide bill, HB2644, never received a hearing in its chamber of origin. The narrower HB2804 would have created a rural credit for every county except Maricopa and Pima. It was capped, time-limited, and tied to the federal LIHTC program.

More than 30 rural mayors and county leaders asked the state to pass it. The bill cleared the House 35-22, which is the farthest an Arizona LIHTC proposal has moved in three years. Senate leadership assigned it to Rules in the closing days of the session but never gave it a hearing or floor vote. It was also left out of the final budget.

The Arizona Free Enterprise Club remained a major headwind. The Club opposes targeted tax credits and has described LIHTC as a carveout that benefits investors, banks, and developers rather than renters. Senate President Warren Petersen has been closely aligned with the Club and has favored broad tax cuts over a credit aimed at one specific need. Senate leadership controls hearings, floor calendars, and the final budget table. Support from rural communities, housing providers, and a bipartisan House majority was enough to cross one chamber. It was not enough to clear that barrier.

The 2027 strategy cannot simply be to file the same bill and hope for a different result. The Coalition will need an early Senate path, a stronger economic case, continued rural leadership, and more employers and economic development voices explaining what the housing shortage is costing their communities.

Other Bills Showed Where the Debate is Headed

The middle-housing rollback in SB1118 failed in the House. The result preserved the statewide framework enacted in 2024 and showed that arguments about property rights, local authority, infrastructure, neighborhood change, and housing supply will continue into 2027.

HB2533 proposed a statewide homelessness office and centralized reporting. Better coordination and better information belong on the agenda. The bill failed twice on the House floor because the proposed structure did not adequately address Continuum of Care roles, HMIS data, privacy, agency responsibility, or whether the required measures were workable.

HB2532 proposed a statewide audit of homelessness spending. The accountability goal was legitimate. Taking $1.25 million from the Housing Trust Fund to pay for it was not. The bill passed the House and died in Senate Rules.

Three enacted bills changed the development side of the equation. HB2999 created affordability infrastructure districts that can finance roads, water lines, and other public improvements needed for housing. SB1336 continued the State Land Department and added oversight and process requirements. HB2946 changed how cities and counties assess development fees. Those tools may help a project move once financing is assembled. They are not the financing.

Several narrower prevention bills also became law. HB2041 clarified that poverty alone is not child neglect. HB2198 opened a path to seal certain petty-offense records. HB2244 created a clearer process for showing that a paid eviction judgment has been satisfied. HB2440 allowed a one-time extension of transition services for some people leaving prison. Each closes one route into housing instability. Together, they still do not amount to a statewide prevention system.

SB1630 created a three-year enhanced residential treatment pilot for people with serious mental illness, subject to federal approval and available funding. Other new laws addressed veterans’ diversion, mental health transportation, and substance use treatment. That bipartisan work is useful. Treatment is not housing, and a discharge plan only works if a safe place is available at the end of it.

The budget largely held existing ground. It carried previously appropriated funding into fiscal year 2027: $15.5 million for coordinated homeless services, $1.5 million for homeless veterans’ services, and $500,000 for a veterans’ homelessness strategic plan. It also increased mobile-home relocation assistance. Extending one-time dollars keeps programs operating. It is not the same as establishing a stable state commitment.

Congress Moved: The ROAD Act is Now Law

The 21st Century Renewing Opportunity in the American Dream (ROAD) to Housing Act became Public Law 119-101 on July 11. The final package passed the Senate 85-5 and House 358-32. President Trump neither signed nor vetoed it during the constitutional review period, so it became law without his signature. The law takes effect January 7, 2027, with many individual provisions requiring additional rulemaking or agency action.

It is the broadest federal housing package in decades. For Arizona, several provisions deserve close attention.

Community Development Block Grant recipients can use those funds directly for new housing construction.
HOME program changes expand flexibility for workforce housing and allow some communities to pay for housing-related infrastructure.
Federal environmental review is streamlined for some housing and rural projects.
New grants and pilots support regional planning, public-land inventories, pre-approved home designs, whole-home repairs, and communities that improve housing production.
Rural Housing Service reforms strengthen preservation and administration of rural affordable housing.
Manufactured and modular housing, small-dollar mortgages, community-bank investment, and voucher participation receive policy or financing changes.
Large institutional investors face limits on some future purchases of single-family homes.

What the Federal Law Does Not Do

It does not restore Arizona’s state LIHTC, put new money into the State Housing Trust Fund, override local zoning, or guarantee that an Arizona project will receive funding. Many provisions require federal rulemaking, agency guidance, appropriations, or competitive applications. Some will take a year or more to become usable.

The ROAD Act gives Arizona more options. It does not make the state and local decisions for us. Communities will still need workable sites, infrastructure, water, matching resources, local approvals, capable partners, and applications ready when federal opportunities open.

The Coalition will follow the federal implementation schedule, flag the provisions most useful to Arizona, and help members and local partners prepare before grant notices and comment periods open.

The Primary Changed the Field… And Very Few Voters Did the Changing

Ballot counting was still being implemented in late July, but statewide turnout was tracking near 26%. That would be Arizona’s lowest primary turnout since 2008, nearly ten percentage points below 2022, with roughly 1.1 million ballots cast. The official statewide canvass is scheduled for August 6.

The primary set a sharp gubernatorial contest between Democratic Gov. Katie Hobbs and Republican nominee Andy Biggs. Senate President Warren Petersen won the Republican nomination for attorney general, which means the Senate will have new leadership in 2027 regardless of the general-election result. Legislative primaries also brought back familiar figures, displaced some incumbents, and produced several close races. Housing interests spent heavily across both parties, further evidence that housing supply, zoning, development costs, and affordability have moved into the center of Arizona politics.

A primary electorate this small is not a broad public mandate. It is a reminder that a relatively small group of voters can choose the candidates everyone else sees in November. The general election will decide the governor, legislative balance, and the people who control committees and calendars. Those decisions will determine which housing proposals have a path in 2027.

The Arizona Housing Coalition is nonpartisan. We will work with whoever Arizona elects. That work cannot wait until opening day.

What Changes for 2027

The next legislative agenda will be built before bills are filed. The Coalition’s policy cohorts will work across affordable housing, prevention, and homeless response to identify where systems fail, test proposals against real experience, work through cost and implementation, and build support before positions harden.

Five pieces of work now move to the front:

Rebuild the state housing finance case. Return the LIHTC and the Housing Trust Fund with clear leverage, cost, time limits, rural and urban impact, and accountability.
Make prevention concrete. Pair rental assistance with stabilization, improve court and mediation connections, and build safer housing exits from foster care, corrections, behavioral health, hospitals, and treatment.
Design statewide homelessness coordination before drafting another bill. Clarify governance, CoC and agency roles, privacy, responsible data use, performance measures, and the funding source.
Prepare Arizona for the ROAD Act. Track federal rulemaking and grants, identify local and Tribal readiness gaps, and help members act before federal notices are released.
Make the advocacy work easier to see. Publish the agenda, explain why and when the Coalition takes a position, issue targeted action alerts, and report the results without inflating them.

The 2026 record is neither a victory lap nor a reason to start over. The Coalition stopped harmful proposals, moved rural LIHTC farther than before, and helped keep housing in the state debate. We did not secure the major state investments or system changes in our published priorities.

The federal government has now changed the toolbox. Arizona voters are changing the people who will decide how—and whether—we use it. The Coalition’s job is to enter 2027 with proposals that are technically sound, politically viable, and supported by people who can explain what the policy would change on the ground.

Join a policy cohort. Share the barrier you see in your community. When an action alert comes, use it. The 2027 agenda will be stronger if the people who build housing, prevent homelessness, respond to crises, and live with the consequences help shape it.