States Have Been on a Housing Affordability Roll. Can Cities Stop Standing in the Way?

Just a few months ago, we reported on state lawmakers stepping up for housing affordability and creating big, bold changes. If Congress is slow to act, at least the states can bring relief to the people. Optimism, and the winds of change, have gained strength. Texas even passed a law to stop small groups of people from blocking rezoning for housing.

Now, it’s the cities and towns crying “Not in our back yards!”

We Can’t Afford to Lose the Momentum

Last year, state after state successfully welcomed housing into underused commercial areas. This is one of the best housing boosters—a win-win that adds to housing, while revitalizing underused real estate that’s already built. It also opens the way for residents to access jobs and businesses right near home, by cycling, walking, or using city transit.

Maryland, Nevada, and Virginia are letting housing fill in commercial zones. Hawaii, Washington, Colorado, and Montana have all begun to incentivize the building of small units such as condos. And California has eased the environmental permitting process when “urban infill housing” is created—that is, multi-unit housing placed on already-built areas. Washington and Texas have been dismantling parking space minimums to allow for more new housing on existing lots.

Florida, Maryland, and Illinois are now encouraging more housing near public transit sites. California, Oregon, Colorado, Florida, and Massachusetts set the trend. Last year alone, Arizona, Texas, Maine, Montana, Nevada, New Hampshire, Rhode Island, Washington, and Hawaii all legislated to allow homes in commercial zones or around public transit stops.

It’s a refreshing change from strictly use-based zoning. That’s the traditional model that keeps homes separate from business districts, with people going by car from one place to the other. At the same time, opening business districts to housing development can significantly cut down the need for parking spaces. Yet another gain for flexibility.

Texas is also opening city business areas to housing. And the new Texas Starter Homes Act allows lots as small as 3,000 square feet for new urban homes.  

Oregon decided homeowners should be able to have up to six homes on their properties, as long as financial accessibility is part of the plan. Another win-win.

Live Free or Die?

But in New Hampshire, the local zoning authorities pushed back.

Last year, New Hampshire passed a law that said local governments have to open commercially zoned areas to home builders. The idea is sensible: let’s replace underused mall and office buildings with housing, allowing developers to build without needing a city’s approval.

But the state legislature buckled under pressure. Now, it’s rewriting the law, to avert lawsuits. With adjustments written in, the bill is being reconsidered in the New Hampshire Senate. This is just one of the time-consuming setbacks afflicting last year’s pro-affordability laws in New Hampshire.

The same story is playing out in many states. With cities and towns making workarounds, or flat-out rebelling, states are backtracking on last year’s bold moves.

But sometimes it’s the developer who is arguing against affordable policy. In Denver, Pittsburgh, and elsewhere, developers are going to court to fight inclusionary zoning. In these programs, cities direct housing developers to include affordable units, or pay fees.

What Happened to Kentucky’s Affordability Law?

It’s not as easy as it should be to acquire a deed in Kentucky. And that’s due to an imbalance in supply and demand. Kentucky needs well over 200,000 homes.

So, it was great to hear about a Kentucky housing affordability law in the works. Kentucky lawmakers were ready to show the country how they could open up ways for local governments to boost construction. Ease costs. Make the permit process user-friendly.

But Senate Bill 9 didn’t pass. Not this year. Differences between state Senate and House versions of the bill couldn’t be reconciled by the time the legislative session closed in April. And why not?

Lawmakers couldn’t agree on how short-term rentals would be handled. Should the bill keep its provision barring cities and counties from imposing strict rules on Airbnb and other short-term rental platforms? Or should it be cut? Did it go too far to override local rules?

They also could not get on the same page on whether or how building inspections could move faster.

And so on.

Another provision would have given faith-based groups the right to build housing on their Kentucky property. Again, sensible as well as creative. This, too, faltered.

Kentucky’s frustrated attempts to create more affordable housing show how tricky housing politics continue to be.

Meanwhile, in Arizona, Florida, Connecticut, Minnesota…

The Starter Home Act flopped in Arizona last year. Like a similar bill being considered in Texas, Arizona Senate Bill 1229 initially would have stopped cities from mandating large lot minimums and controlling how homes are designed. The bill came up against pushback from the Arizona League of Cities and Towns. So the lawmakers changed the bill, which now has bigger lot minimums. Still, Arizona managed to pass House Bill 2928, which supports accessory dwelling units. If at first you don’t succeed…

In Florida, lawmakers have continually amended a law passed in 2023, the Live Local Act, to take out loopholes that local governments have been finding to avoid adding housing into their hubs.

After a suburban revolt in Connecticut, the governor had to rewrite a housing reform bill he promoted and signed into law.

And facing pushback from city officials in Minnesota, the Starter Homes Act was derailed for the year. It was intended to allow more types of homes to be built in Minnesota neighborhoods: duplexes, triplexes, townhomes, and backyard cottages. The bill was pro-deed. Smaller homes are what’s needed to get deeds into people’s hands. There are enough developers working on large houses and apartment properties.

America’s Housing Comeback? Or Setback? It’s Up to Us All.

Last year, the National Association of REALTORS® championed America’s Housing Comeback. Importantly, it’s a project that the National League of Cities created. It asks federal, state, and local decision makers to join forces and make housing financially accessible. And we saw a robust response across states. Momentum formed and increased. State lawmakers rallied to meet housing needs with creative and workable approaches.  

In 2026, we’re seeing some rollbacks. But the United States needs more homes than ever. If deeds aren’t accessible, neighborhoods and economies suffer. Cities should know this—and help their state legislatures lead.

Because so much of the opposition is at the local level, we can be effective influencers. We can all use our voices to get America’s Housing Comeback on track again.