Buying land and building a second dwelling... what is the best way?

[Drex Tanner]

So I am looking for creative ideas others have done for the following situation: 

My father owns his home on a 1.5 acre lot. About .6 acre of it is just pasture behind it, that was used for hobby cattle. I am wanting to build a home on that land, but the city will not let us subdivide the land (parcel not big enough). 

I am looking for any ideas from the community to the following 2 questions:

1) Is there a way to petition the city to allow the subdivide of the parcel? (Gilbert AZ) (from my research, this seems unlikely). 

2) What would be the best/most creative way to finance it, if unable to subdivide does not work? 
(My idea so far: My father cash out refinances the property (he has plenty of equity) - he puts my name on the refinance, and use the cash to build the second house, and I would pay the difference compared to his current mortgage). Is there a better way? 

Would love any creative ideas to the above questions, thank you!

For context: 

- we have a great relationship, and they are a few years away from retirement

- I would not be able to afford to buy him out all the way of the home with a traditional loan, and they do not want to move anytime soon.