Arizona doesn’t have enough new housing units, but like all states has vacant office and retail complexes that could be repurposed as apartments. Arizona lawmakers have recognized this possibility and have eased requirements that have hindered this type of redevelopment. As a result, the law is changing January 1, 2025 to allow conversions of commercial, office or mixed-use building without requiring a conditional use permit, a planned unit development application, a rezoning application or other discretionary municipal review – all current significant stumbling blocks to the conversion process. Conditions include that the municipality has 150,000 or more persons, and not more than 10% of existing commercial, office or mixed-use buildings are so converted. Whether the change in the law will spur office conversions would appear to hinge on whether the commercial office market continues to contract and apartment demand stays strong.
