Housing Affordability Buzz: Pennsylvania’s Governor Just Laid Out the Plan

For many Pennsylvanians, deeds are out of reach. Housing is relatively scarce in some of its most popular areas: the Philadelphia suburbs, Harrisburg, York, and Lancaster, and its northeastern cities.

The governor has a plan to make housing attainable. Housing costs are rising, Josh Shapiro told Pennsylvanians. “And the housing we do have is getting older and is in need of more repairs.”

States across the nation are realizing that they have to act. Now, Governor Shapiro has announced a plan for housing breakthroughs in Pennsylvania. Will all hands jump on deck to back it?

Lagging Behind, But Looking for Change

In some parts of Pennsylvania, demand is far outstripping supply. And housing costs are painful where the shortages are felt the most.

On top of this, Pennsylvania wage growth is not keeping up with the monthly cost of living in a home. This is one big reason why residents are, more and more, facing foreclosure today.

Another pressing issue is the lack of small homes. The demand for smaller units is surging. Many more people are living alone than in the past. The average household size in Pennsylvania is shrinking and development hasn’t caught up.

For well over a year now, Governor Shapiro has been working to form a broad coalition that can make legislation happen. Lindsay Powell, a State Representative for Pittsburgh and Housing Caucus co-chair, thinks there are ways to make change.

Other states have been passing laws that allow for “upzoning”—that is, finding ways for land owners to create extra units.

Yet zoning transformations are rarely easy. They come down to local processes. And local rules and expectations are hard to change.

Meeting People Where They Are: How a Budget Took Shape

Pennsylvania certainly hasn’t rushed into this. It’s number 44 out of all states in new housing development in recent years. At the same time, it has a growing population. Given the demand for housing, official estimates put Pennsylvania at about half a million units short.

More than half of Pennsylvania homes are 50+ years old. Repairs and renovations on older homes can be costly, of course. (Last year, the governor pressed for a $50 million repair initiative, but that was dropped from the budget that lawmakers ultimately passed.)

Why is more action on Pennsylvania housing coming to the forefront now?

It was late 2024 when a concerned Governor Shapiro signed an executive order. It instructed Pennsylvania’s Department of Community and Economic Development to review current housing initiatives, and design something new.

The Department began the assignment by inviting comments from interested people and groups. Hundreds of submissions flowed in. The Department also held outreach sessions where people’s concerns and ideas were heard.

Informed by the process, Shapiro discussed housing costs in his annual budget address to the legislature this month.

February 2026: Shapiro Reads a New Budget Speech

Key points in Shapiro’s speech included these:

• The cost of living is going up, and a “lot of people are worried about whether they can afford a house at all.”

• Pennsylvania’s minimum wage “has been stuck at $7.25/hour for the last 16 years.” Shapiro pointed to Ohio, which is raising theirs to $15. If Ohio can do it, Shapiro’s suggesting, so can Pennsylvania.

• Pennsylvania’s housing progress depends heavily on local decision-making. Local zoning rules are specific to 2,560 different municipalities. Shapiro wants all these various rules catalogued.  

• Then, Pennsylvania’s government must work with towns and cities to update planning and zoning standards and cut bureaucracy. Shapiro has already been busy easing housing development permitting standards at the state level.  Making local permitting procedures easier is seen as the next hurdle.

• Local planners must make room for mixed-use development (housing units on land that’s now  zoned for commercial use only), and development around transit hubs.

• Pennsylvania’s local planners should legalize accessory dwelling units, like backyard cottages and basement flats.

The 2026-27 budget includes a billion-dollar Critical Infrastructure Fund, supported by government bonds, for housing and infrastructure upgrades.

Pennsylvania needs hundreds of thousands of new units, Shapiro acknowledges. “This is how we build them.”

Budget Speech Slams Out-of-State, Private Real Estate Investors for Rising Costs

Shapiro pointed to people present at the capitol during the speech—people living in a manufactured home community. The residents of this community own their homes. But a company holds the deed to the land underneath.

So they are still paying fees—renting, essentially. There’s no way for them to acquire their own deeds. Meanwhile, monthly fees charged at this particular community have doubled since 2020.

Shapiro called this “far too common across these kinds of communities” for tens of thousands of households. Increasingly, Shapiro said, people are living on real estate that investment firms are buying up.

“I’m asking you to pass legislation,” Shapiro told the lawmakers, “limiting annual lot rent increases for manufactured home communities to protect grandmoms…from predatory private equity.”

That’s important. It would help people buy their own homes. That’s because it would allow more people a chance to build savings for down payments.

Where There’s a Will…

Attempts to change zoning laws meet vocal opposition from people who live in the towns. This is why it’s important for all of us to make our voices heard in local planning meetings.

Pennsylvania can press things along by creating incentives for local governments to allow more housing. These local planners could rack up points. Points could create eligibility for state funds. New York, California, and Massachusetts are three examples of states with such incentives.   

This concept, like much of Shapiro’s budget plan, needs the support of state-level lawmakers. Pennsylvania is politically divided. So, can the legislature agree on the governor’s plan?

The need for housing is obvious to all. We can look at what’s already happened with housing to see that lawmakers can come to agreements that work.

Onward! Building on the Advances Already Under Way

Governor Shapiro has made a number of pro-housing affordability proposals. And some are already working. Consider the increased rebate amounts for rent and property tax payments. These higher rebates are helping an expanded group of seniors and residents living with disabilities, since 2024.

Transit hub area development is under way in some of the places it’s needed most. Joe Picozzi, a Republican state senator from Philadelphia, will introduce a bill to bring grants to local governments supporting developers as they build housing in and around job hubs.

Now that the governor has outlined the new budget framework, 2026 could be the year for major inroads in affordable housing. Readers in Pennsylvania and in all states with urgent housing needs: press your representatives—and your local governments—to take action now. Let’s hold them accountable.