Governor Katie Hobbs described housing affordability as a central threat to the "Arizona promise" and urged a set of legislative and executive responses.

She called for an extension of the state low-income housing tax credit (referred to as Prop 123 funding in her address), stronger local input on vacation rentals, and expanded down-payment assistance through the Arizona is Home program. "We will double the number of first time homebuyers who receive assistance," Hobbs said, citing the administration's intent to scale the program.

Hobbs also announced an executive-budget down payment to create a Homes for Heroes Fund aimed at preventing veteran homelessness and issued a challenge to lawmakers and elected officials "to fully commit to ending veteran homelessness in Arizona in the next decade." The governor said local and state governments, nonprofits and veterans organizations would all need to participate.

On short-term rentals, Hobbs said out-of-state corporations buying properties and converting family homes into vacation rentals are worsening affordability and community disruption. She asked the legislature to give neighborhoods more voice on those conversions.

The address included a personal example: Maria Magdalena Contreras, described as a widow and medication technician who used down-payment assistance from Arizona is Home to purchase her first home after eight years of renting.

Hobbs asked lawmakers to cut regulatory red tape that she said increases housing costs and to support small-scale residential infill such as casitas, duplexes and triplexes in downtown areas as part of a broader supply-side approach to affordability.