TUCSON, Ariz. (KGUN) — Arizona Governor Katie Hobbs made affordability the centerpiece of her State of the State address Monday, announcing new initiatives to tackle housing affordability.
During her speech, Hobbs unveiled the Housing Acceleration Fund, which would combine public and private money to build affordable housing more quickly and invest more than $2 million in the effort.
"We've launched a war on the cost of housing and it's starting to pay off," Hobbs said.
The governor highlighted that Arizona has broken ground on more affordable housing units in the past three years than in any other three-year period in state history. She pointed to the Arizona is Home program, which has offered down payment assistance and interest rate buydowns to help residents purchase homes.
"Let's keep fighting to bring back the Arizona that I grew up in, one where a working class couple could buy a house to call home and raise their family in," Hobbs said.
However, many younger Arizonans say homeownership remains out of reach. Isabel Holliday, a University of Arizona student, said housing prices need significant reductions.
"Tucson in general doesn't have that many attractions besides retirement and the U of A, and besides that, it's really expensive," Holliday said.
She feels as if there needs to be more variety of housing, including a range of prices.
"It's either really high end houses or apartments and stuff, so maybe having more in the middle, like reinforcing the middle class," Holliday said.
Hobbs also announced the Arizona Affordability Fund, designed to help working-class families pay utility bills, weatherize their homes to lower energy costs, and build more affordable housing units. The state is investing $20 million into the program.
"Utility bills are now one of the largest expenses people pay every month, and too many Arizonans are falling behind," Hobbs said.
To fund the initiative long-term, Hobbs proposed imposing a nightly fee of $3.50 on short-term rental stays.
Ann Barker, a snowbird visiting Arizona, expressed skepticism about the fee's effectiveness.
"The people who own the properties and resorts will just increase the fees accordingly," Barker said.
Barker suggested property tax reform as an alternative approach.
"What you really have to do more than anything for affordability is to balance the property taxes," Barker said.
The housing crisis extends beyond Arizona's borders. According to the National Association of Home Builders, home prices increased 55% nationally from 2020 to the third quarter of 2025.
President Trump has also addressed housing affordability, recently posting on social media: "I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it. People live in homes, not corporations."
At the state level, Republican State Senator John Kavanaugh has proposed converting empty classrooms into housing.
"You have a lot of districts with empty school buildings just sitting there. This comes at a time when we have an affordable housing crisis," Kavanaugh said.
Republican Senate President Warren Peterson has also focused on affordability issues, with Republicans planning to send additional tax-cutting proposals to Hobbs in the coming days.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
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Andrew Christiansen is a reporter for KGUN 9. Before joining the team, Andrew reported in Corpus Christi, Texas for KRIS6 News, Action 10 News and guest reported in Spanish for Telemundo Corpus Christi. Share your story ideas with Andrew by emailing andrew.christiansen@kgun9.com or by connecting on Facebook, or Twitter.
