Queen Creek, Arizona — The Arizona Department of Housing routinely failed to document mandatory health and safety inspections for subsidized affordable housing units across the state and delayed alerting landlords to critical hazards, according to a legislative sunset review released by state auditors.
The performance evaluation, conducted by Arizona Auditor General Lindsey Perry, examined how the state administers properties subsidized through the Low-Income Housing Tax Credit (LIHTC) framework and related state programs. State records indicate that between 2020 and 2025, the housing department distributed over $4.3 billion in public tax incentives to encourage developers to build, renovate, or acquire 21,549 rental units designated for lower-income families. Under program agreements, participating property owners commit to keeping those apartments affordable for eligible tenants, typically over a 30-year compliance horizon.
Auditors sampled 153 residential unit inspections and discovered that state inspectors failed to document whether they evaluated federally mandated safety elements in 126 of those units. The report noted that inspection files frequently omitted checks on essential household components, including smoke detectors, water heater discharge lines, electrical panels, and stoves. When inspectors did identify urgent hazards requiring remediation within 24 hours—such as pest infestations, exposed electrical wiring, and obstructed emergency exit pathways—agency notifications to building management lagged anywhere from 40 to 115 days.
