Real Estate – Navigating the New Normal

February 3, 2026

Managing zoning referenda in Arizona real estate development

BY SHANE A. ROSS

In recent years, voters in Arizona counties and municipalities have used the referendum process more and more frequently to challenge or stop rezoning cases after they have been approved by a city council, board of supervisors, or other legislative body. The Arizona Constitution allows the people to “use at their own option, the power to approve or reject at the polls, any Act, or item, section, or part of any Act, of the Legislature.” Ariz. Const. Art. IV, pt. 1, §1(1). Amplified by the flourishing “not in my backyard” (NIMBY) sentiment throughout Arizona, referenda have become a favored tool to halt zoning and development projects following legislative approval.

Opponents of a rezoning case must gather signatures from a specified percentage of registered voters within 30 days of an approved ordinance. The number of required signatures for a petition is based on the total votes cast in the most recent municipal election at which the mayor was selected,preceding the submission of the application for a referendum petition. If enough valid signatures are collected and verified by the county recorder, the zoning decision is suspended, and the issue is placed on the next general election ballot for voters to decide. Although the referendum is an important part of direct democracy, special interest groups and activists are turning to this process with increasing frequency and ease.

A recent high-profile example involves Axon, a Scottsdale-based public safety technology company. Axon recently sought the City of Scottsdale’s approval to rezone land for a major expansion of its headquarters. The proposed project included nearly 2,000 multifamily residential units, a 425- room hotel, and significant retail and restaurant space. Despite City approval, the project faced significant opposition. A grassroots group, forming the political committee “Taxpayers Against Awful Apartment Zoning Exemptions,” mobilized and gathered enough signatures to force a referendum.

Enter SB 1543, signed by Governor Katie Hobbs in April 2025. This narrowly-tailored law addresses situations like Axon’s. In municipalities with populations between 200,000 and 500,000, the law allows land zoned for light industrial to be used for hotels and multifamily housing as ancillary uses without requiring a public hearing. By reclassifying this from a legislative act (which is subject to a referendum) to an administrative act (which is not), the law effectively shields qualifying projects from the referendum process. Because SB 1543 was applied retroactively, it nullified the referendum against the Axon project.

Still, SB 1543 itself may end up on the 2026 ballot as a veto referendum. Regardless, it represents a step in the right direction. Future efforts to create reasonable limits on referenda would encourage economic growth in local communities, allowing zoning approvals to stand based on their individual merits and the unique needs of each community, rather than being derailed by broad public sentiment or organized opposition.

While the referendum process is designed to support democratic participation, its increasing use—particularly when driven by NIMBY sentiment—has, in some cases, hindered responsible and thoughtful development and economic growth. As Arizona’s communities continue to grow, zoning and land use attorneys play a critical role in navigating the intersection of legal strategy and political dynamics in today’s evolving landscape.

IN THE ZONE

If you need assistance with land use or zoning issues, please contact the attorneys at Tiffany & Bosco, P.A.