Peoria may not require owner-occupancy as a condition of building or operating an accessory dwelling unit. Arizona Ariz. Rev. Stat. section 9-461.18 (HB 2720) preempts owner-occupancy mandates for cities over 75,000 population. The Peoria Zoning Ordinance residential districts were amended to remove any prior owner-occupancy condition. Investor-owned ADUs are permitted on single-family lots.
Under Arizona Revised Statutes section 9-461.18, enacted by HB 2720 in 2024, Peoria is prohibited from requiring the property owner to occupy either the primary dwelling or the ADU as a condition of building or operating the unit. This represents a significant change from many cities' prior pilot programs, which commonly required owner-occupancy. Peoria's amendments to the Peoria Zoning Ordinance implemented this state preemption. Investor-owners and out-of-state property owners may now construct and rent both the primary dwelling and the ADU to separate tenants without violating zoning. The state statute also prohibits Peoria from limiting the number of related or unrelated occupants in either unit beyond the building code's life-safety occupancy load. Homeowners associations recorded after the effective date of HB 2720 cannot enforce contrary owner-occupancy covenants on covered properties, though older recorded covenants may have partial effect.
Peoria cannot enforce owner-occupancy as a condition of ADU permits or operation under Ariz. Rev. Stat. section 9-461.18. Any attempt to impose owner-occupancy through code enforcement, business license denial, or HOA covenant on covered ADU lots can be challenged in state court. Owners do not face enforcement for renting the main house and ADU to separate non-related tenants.
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