Making Deeds Affordable: State Lawmakers Bring a Breath of Fresh Air

People need homes. Solutions are possible. Where are the politicians and what are they doing — or not doing?

We’ve already highlighted the federal ROAD to Housing Act of 2025. We’re watching Congress to see how that proceeds in a turbulent year. With a government shutdown casting its chaotic shadow of confusion and delays, many are turning to their states to see what’s being done.

Making Commercial Zoning More Flexible? It’s Doable.

The need for housing in the United States is so strong right now that state policy makers are putting aside their ideologies and working together to bring reforms. In 2025, state lawmakers have made impressive progress to increase housing for struggling households from coast to coast.

There’s a trend in play: opening commercially zoned areas to home builders. Arizona’s large cities, under a new state law, have to welcome multi-unit redevelopment over 10% of their mixed-use or commercial areas. New Hampshire, Rhode Island, and Maine now all allow housing to crop up in commercial zones.

Montana is making room for apartments in industrial areas. Nevada counties now welcome mixed-use and residential properties in places zoned for commerce.

Texas is now opening metropolitan business areas to apartment complexes. Texas developers who make housing out of former office space now enjoy relaxed zoning and parking space rules. Texas has also enacted the Starter Homes Act, which lets people plan free-standing houses on lots as small as 3,000 square feet in new developments in cities. That’s a far smaller area than what used to be required for a house.

Interestingly, Texas has also passed a law to stop small groups of people from getting in the way of re-zoning for housing. Key zoning reforms are being pressed forward by law and policy makers — regardless of their political affiliations.

Yes, In Our Back Yards: More Cottages!

Basement flats and backyard cottages are now being greenlighted in areas where single-unit houses have long been the norm. Accessory dwelling units now get support from Republicans as well as Democrats. The result of their working together? Eighteen U.S. states now have laws letting deed holders install accessory dwellings.

Iowa, for example, just enacted a law legalizing accessory units. The new law, Iowa Senate File 592, says deed holders can make extra units for their relatives or employees, up to a half the size of their property (but no more than a thousand square feet).

Manufactured homes are welcomed under Iowa’s new law, if installed on a permanent foundation. (Kentucky, Montana and Texas have all made zoning easier to promote the availability of manufactured homes.)  

Here is a rundown of a half-dozen more states that, just this year, got in on the accessory dwelling unit trend. This list is brought to us by the Pew Charitable Trust researchers:

• Arizona has just broadened its existing ADU law to unincorporated counties, so that rural deed holders may now add units of housing to their properties.

• Maryland’s new law directs all cities and counties of the state to allow deed holders to install extra living units.

• Nevada law directs its two most heavily populated counties to permit accessory dwellings.

• New Hampshire deed holders have now gained the right to install accessory units, as long as each unit has a parking space.

• Arkansas, too, now lets homeowners build extra living spaces on their single-unit properties.

• Cities in Maine now welcome accessory dwelling units, and has simplified rules and restrictions on these homes.  

California, Colorado, Connecticut, Massachusetts, Montana, Oregon, Rhode Island, Utah, Vermont and Washington, as well as Hawaii, had already legislated to promote these extra housing units.

Gentle Density? It Works.

Several states have recently allowed for townhomes. And some have empowered deed holders to divide their land and make smaller, more affordable properties:

• Rhode Island has a new law allowing townhomes in more areas of the state. Also, it’s one of the latest states to allow deed holders to subdivide their properties. Rhode Island now allows three and four family homes under the regular residential zoning code (rather than commercial, which is costlier). Keep it up, Rhode Island!

• Along the west coast, Washington and Oregon both made it easier for deed holders to subdivide. Great to know! Especially for households with extended families, or people wanting to pass extra marketable units of property on to their heirs.

Many states have burdensome liability standards that make it harder for the housing industry to build condo properties. But that’s changing in Hawaii, Washington, Colorado, and Montana. All four have adopted new policies to promote condo development. And California has simplified permits for multi-unit housing, waiving the California Environmental Quality Act process when housing is being placed on already-built areas.

Washington, Montana, New Hampshire, and Texas have all eased rules that mandated more parking space than necessary, to allow for more new housing on existing lots.

Oregon added to the areas around the state that allow townhomes and multi-unit housing. Plus, it’s now letting deed holders have up to six homes on their properties — if one or more of the units is accessible housing, or sold to a household making no more than 120% of the local median income. Great thinking!

Got a Train Station? Build Housing.

Zoning to accommodate more living space near transit sites is trending. Planning for affordable living spaces in transit-connected locations is getting attention and funding. And governments are offering tax exemptions for “inclusionary zoning” that encompasses transit, and makes room for a certain number of financially accessible living spaces. For just a few examples:

• Washington State is now welcoming apartment buildings with six floors in the half-mile surrounding a train station. Buildings with up to four floors may be placed near bus routes.

• Hawaii has established attractive incentives for local governments willing to situate apartment buildings near public transportation.

We could go on. No less than fourteen states have new laws that bring homes to employment and transit hubs. California, Oregon, Colorado, Florida, and Massachusetts were early adopters in this trend. Then, in 2025, 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.

All Aboard for America’s Housing Comeback

In August 2025, the National Association of REALTORS® joined America’s Housing Comeback. The campaign, led by the National League of Cities, pushes federal, state, and local leaders to work cooperatively, bringing housing within the reach of those who most need it.

So far this year, we’re witnessing movement at the state level. In a time when federal policies have proven unpredictable, it’s a breath of fresh air when state lawmakers get together to meet housing needs with creative, determined approaches.