municipalities; starter homes developments; regulation.

SB 1698 requires Arizona municipalities with over 30,000 residents to allow "starter homes" (defined as single-family homes with income restrictions at 120% of area median income) in at least 10% of new single-family residential developments larger than 10 acres, starting January 1, 2027. The bill limits local zoning rules by prohibiting requirements for minimum lot sizes of 4,000+ square feet, front yard setbacks of 20+ feet, rear yard landscaping, or patio requirements. It exempts historic districts, military areas, and existing planned communities from these rules. The law expires December 31, 2035, and does not override building or fire codes. This directly affects developers and cities in larger Arizona communities seeking to increase housing options for lower-income buyers.