I was recently invited to participate in a panel discussion about state housing legislation. To prep for the panel, I spent a few hours (!) boning up on the subjects and trying to memorize some research facts and the minutia of various bills. Especially since I live in Pennsylvania where none of these statewide reforms have been passed, it’s impressive to see how many other states have adopted great housing policy.
My main takeaway after poring over state housing legislation, is that the cutting edge in zoning is really happening in states, not cities, these days. After decades of local control over zoning and land use, states are stepping in with reforms that aim to increase housing supply, improve affordability, and dismantle exclusionary barriers. That said, many state policies are scaled-up versions of ideas that were tested — and proven — at the city level first.
Take Houston, which reduced minimum lot size requirements to just 1,400 square feet back in 1998, leading to tens of thousands of small-lot single-family homes. This year, Texas enacted SB 5, which ensures that minimum lot sizes for new construction don’t exceed 1,400 square feet in cities of more than 150,000 people. The state bill goes further, preventing municipalities from adding additional requirements like excessive setbacks or open space mandates that would undermine the flexibility these smaller lots provide.
This local-to-state progression is playing out across multiple policy areas. Here are eight major directions in state housing legislation:
- Shrinking minimum lot sizes
Minimum lot size requirements have long been a tool of exclusion. A University of Colorado Boulder economist found that when cities increase their minimum lot sizes, home prices rise, neighborhoods see increased White homeownership, and household incomes go up.
States are pushing back. Beyond Texas’s 1,400 square foot standard, Maine recently signed LD 1829 into law, capping minimum lot sizes at 5,000 square feet in designated growth areas — a little more than one-tenth of an acre. For a state that ranks 38th in population density, that’s meaningful progress toward building the density needed for more affordable housing.
- Reviving the starter home
There are perverse incentives in the housing market to build as large a home as possible on large lots, making housing expensive and inaccessible. By creating smaller lots and enabling attached housing, states are trying to bring back the “starter home.”
Rhode Island’s H. 5798 explicitly allows townhouse construction where each unit has its own single-family home property, without any minimum lot size requirements. Utah took a different approach with its Homes Investment Program, created in 2024, which provides low-interest loans to developers who build starter homes that are 1,400 square feet or less and cost under $400,000. The program runs for three years and is managed by the Office of State Treasurer.
- Accessory dwelling units go mainstream
According to the Mercatus Center’s annual taxonomy, 18 states now have statewide ADU reforms in place. The best ADU reforms build off past legislation and share common characteristics: no homeowner occupancy requirements, no parking mandates, and no discretionary review processes.
It has seemed like the fewer barriers the better, but you can take that too far. San Diego’s ADU bonus program initially allowed essentially unlimited ADUs, which led to a good deal of pushback. The policy was scaled back to three ADUs per lot, with lots over 10,000 square feet allowed up to six ADUs. Between 2021 and 2024, San Diego permitted 5,720 ADUs — though only 875 were part of bonus program developments, including just 368 affordable homes.
California’s AB 1033 is breaking new ground by allowing ADUs to be sold separately if a city opts in. San Diego was one of the first to adopt this policy, motivated by having one of the lowest homeownership rates for people under 30.
To speed ADU adoption, some states are promoting pre-approved designs. Many California cities have pre-approved ADU plans that fastback the permitting process, while Oregon has created a permit-ready plans program for detached garages and is expanding to dwelling units.
- Yes in god’s backyard leads to dense housing
Florida’s “Yes in God’s Backyard” (YIGBY) legislation allows multifamily housing on any religious parcel regardless of underlying zoning — an impressively permissive move. Arizona, Colorado, Kentucky, Massachusetts, Minnesota, New York, and Texas have all considered YIGBY legislation this year, though none has passed yet. The Furman Center has explored the potential for faith-based organizations to develop housing, with an eye to the implications in New York.
- Connecting housing to transit and jobs
States are increasingly tying housing policy to transportation infrastructure and employment centers.
Washington passed H.B. 1491, which allows six-story buildings within a half-mile of rail stations and four-story buildings near bus rapid transit. The bill includes 20-year property tax exemptions to essentially offset the costs of inclusionary zoning that requires affordable housing.
California’s SB 79 will also enable multifamily development in transit-rich neighborhoods and require affordability. And Hawaii’s H.B. 1409 provides for siting housing near transit stops and prioritizes affordable housing funding toward transit-connected areas.
- The single-stair revolution
Single-stair reform has really taken off in just two years. Pew found that 14 states have passed some type of single-stair bill since 2023. The benefits are compelling: more large family-friendly apartments, lower construction costs, and the ability to create smaller, neighborhood-friendly residential structures like courtyard apartment buildings.
As a result of recent reforms, Montana, Texas, New Hampshire, and Colorado now allow single-stair buildings beyond the traditional three stories allowed in the rest of the country.
- Eliminating parking mandates
A University of Colorado report found that reforming parking alone would increase housing by up to 70 percent in transit-oriented areas. In cities like Buffalo and Seattle that have reformed parking, the result has been more bedrooms per parking unit than before.
Washington now prevents localities from mandating more than 0.5 parking spaces per home for multifamily housing and one parking space for single-family housing. There are now no parking requirements for homes under 1,200 square feet, subsidized housing, and senior housing. Montana, New Hampshire, and Texas have all reformed their parking laws.
- Opening the door to factory-built housing
Zoning policies have long discriminated against manufactured housing through location restrictions, design standards (like specific cladding materials and foundation types), and minimum lot sizes that eliminate the cost savings these homes offer. These barriers limit manufactured homes and perpetuate affordability gaps.
Kentucky recently passed a bill prohibiting local governments from adopting or enforcing zoning regulations that exclude or discriminate against qualified manufactured homes.
Maryland now permits manufactured or modular homes in any zone that allows single-family homes, as long as the home is new and treated as real estate like site-built homes.
Manufactured home buyers there can now access traditional mortgages.
Creative financing rounds out the toolkit
Beyond zoning reform, states are experimenting with financing mechanisms. Programs like the Maryland Housing Innovation Pilot Program (HIPP) provide low- or no-interest loans to local housing authorities or governments to acquire existing housing stock.
New York’s Pro-Housing Community designation rewards communities that have increased permitting or adopted pro-housing zoning with access to discretionary funding opportunities.
The path forward
What’s clear from this wave of state legislation is that housing reform is no longer confined to a handful of progressive cities. Red and blue states alike are recognizing that restrictive zoning has created an affordability crisis, limited economic mobility, and reinforced segregation. The question now is whether these state-level reforms will produce enough housing fast enough — and whether the success stories at the local level will indeed translate when scaled up across entire states.
Diana Lind is a writer and urban policy specialist. This article was also published as part of her Substack newsletter, The New Urban Order. Sign up for the newsletter here.
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