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Commercial buildings and zoning to be impacted by new Arizona law

On Behalf of | May 16, 2024 | Real Estate Transactions |

Arizona real estate law can be complicated and those who are involved in the industry must stay up to date on changes as they come about. Some of these changes fundamentally impact how land is utilized. That can include zoning issues, which are a frequent obstacle for developers. Understanding how new laws will alter the landscape is imperative for everyone who has a stake in real estate.

Governor signs housing bill to transition commercial property

A new law has gone into effect after a housing bill was signed by Gov. Katie Hobbs. Its objective is to transform unused commercial buildings into affordable housing. In addition, it will avoid rezoning, which is a common challenge with real estate development.

With this law, developers will be free to change or demolish commercial buildings, offices or buildings that are used for both to create residential properties. Avoiding the zoning issue will cut significant time off the process. This will begin in 2025. Cities that have a population of over 150,000 people would need to allow up to 10% of these structures to be demolished. They would need to be viewed as obsolete for this to move forward.

For developers, the law shields them from needing to seek rezoning or a permit for conditional use. This is expected to spark development since a sticking point for many investors is the logistical challenges they face with getting the proper permits to build properties as they want.

Developers should be prepared for business under the new law

Even with the new law smoothing the process for developers to move forward with projects to convert commercial property into residential property, it is still important to understand how to proceed. There are myriad issues that arise with these vast projects and when there is a new land use and development law to assess, it is vital to be aware of the details. From financing to zoning to gauging the intricacies of this new law, it is crucial to be prepared for issues that cause missteps and can delay or doom a project.