More States Have Embraced Housing Policy Reform in 2026

The federal government has received much attention for enacting the nation’s first major housing package in three decades: the 21st Century ROAD to Housing Act, which took effect in July 2026 with the support of massive majorities in the House and the Senate.

But states have also entered the arena with bipartisan support for laws that allow more homes. In 2026, about one-third of states, from North Carolina to Idaho and from New York to Kansas, passed significant housing policy reforms. Some enacted policies aimed at enabling the construction of housing near commerce. Others sought to encourage construction of apartments, accessory dwelling units (ADUs), and starter homes. Several states sought to allow churches and other nonprofits to build on land they already own. And many sought to simplify building codes and permit processes to streamline the development process.

The continued growth of reform efforts, led by bipartisan groups of lawmakers and diverse coalitions, reflects a broadening consensus that housing shortages, high rents, unattainable homeownership, and historically high homelessness are not inevitable but instead result from policy choices that states have the authority to address. Although states took different approaches, the reforms have common themes: They allow construction of a broad array of homes, make better use of land near commerce, pare back inflexible mandates, and lower administrative barriers that add time and cost to development.

Key takeaways from states’ 2026 legislative reforms:

• America’s housing shortage has expanded well beyond the coasts, and states are taking action. About one-third of states passed significant housing reforms in 2026. Seven enacted their first major housing reforms, while states that had previously reformed their land-use policies built upon previous efforts.
• States are making it easier to build more homes on underused land near existing infrastructure, as well as homes of various shapes and sizes. Reforms are expanding the types of homes that can be built and where, particularly near commercial and transit centers, while streamlining permitting processes and modernizing building codes to reduce costs and delays.
• Housing reform is a bipartisan state-level priority. Lawmakers and coalitions across the political spectrum are increasingly using state policy to expand housing options in an effort to make housing less expensive.

Land-use reforms allow housing to be built near jobs and opportunity

Several states enacted zoning reforms in 2026 that expand opportunities to build housing near jobs and transit, where demand is high.

Washington’s S.B. 6026 requires many cities and counties to allow mid-rise apartment buildings in commercial and mixed-use zones. New Hampshire’s H.B. 1588 streamlines zoning for multifamily housing. The bill strengthens H.B. 631, which was enacted in 2025, by prohibiting municipalities from imposing additional restrictions on multifamily buildings proposed for construction on commercially zoned land or on commercial-to-residential conversions. North Carolina’s S. 445 allows multifamily buildings up to 60 feet tall on commercially zoned land in certain large cities. California’s A.B. 2074 requires cities with at least 400,000 residents and at least two transit stops that meet state requirements for transit-oriented development designate districts around regional transportation hubs where they will allow tall apartment buildings, with qualifying projects receiving streamlined approval.

Colorado and Arizona took a different approach. In Colorado, the state legislature enacted H.B. 26-1065, which created a state-supported framework to build and finance transit-oriented development and affordable housing projects through designated investment zones. Arizona’s H.B. 2999 created infrastructure finance districts to help reduce construction costs on large housing development projects. That bill passed by a 45-9 vote in the state House and 21-6 in the Senate.

These reforms all make it easier to build housing and pair growth with infrastructure planning.

Allowing accessory dwelling units is the most common reform in U.S.

ADUs are the most popular objective of state-level housing reform. These small homes, built in backyards, basements, and garages, can add lower-cost housing in an existing neighborhood without significantly changing its appearance. State laws typically establish the right of an owner of a single-family property to build an ADU and limit the ability of local governments to impose restrictions.

Four states passed new laws to allow ADUs. Nationwide, 22 states now have laws that specifically allow property owners to build ADUs. (See Figure 1.)

All the laws enacted this year allow “by-right” development of ADUs. By-right development refers to construction that is permitted automatically—with no special review process—if it meets all existing building and zoning codes.

North Carolina’s S. 445 ensures that ADUs are allowed in cities with at least 50,000 residents (the state’s 23 most populous cities). West Virginia’s S.B. 659 allows owners of single-family homes to build ADUs and limits local restrictions, such as additional parking requirements or family occupancy of the units. Virginia’s S.B. 531 says ADUs are allowed in cities and towns that have no ADU ordinance. Idaho passed S. 1354, which allows by-right ADU development and caps parking mandates at one space per unit. Idaho also passed H.B. 707, which allows a lot with multiple residential structures (such as a single-family home and an ADU) to be split in two, enabling low-cost homeownership for the ADU buyer. This law passed by a vote of 32-2.

Arizona, Maine, and Washington already had laws that allow ADUs, and all three strengthened those laws in 2026. In Arizona, H.B. 2946 limits development and impact fees for ADUs. Maine’s L.D. 128 exempts ADUs from environmental review; L.D. 2173 stipulates that construction of an ADU should not require the approval of a local planning board and clarifies when units may be added to a lot. Washington’s H.B. 1345 expands where ADUs are allowed outside designated “urban growth” areas (cities and surrounding areas that are targeted by counties for development). 

The rapid expansion of ADU legislation reflects how this once-local policy area has become a state-level priority in much of the country.

Parking reforms can lower development costs

Requirements for off-street parking raise the cost of new homes, consume land that could otherwise be used for housing, and make smaller projects harder to build. This year, North Carolina passed H. 162, which removes all parking mandates in most of the state—not just for residential development, but for commercial as well. This law, the nation’s strongest parking reform, will make it easier to build housing, particularly where land is expensive. Maryland’s H.B. 894 eases off-street parking requirements for residential and mixed-use developments located near most train stations. Virginia’s H.B. 888 also reduces parking mandates near transit stops. And when Idaho and West Virginia passed their ADU laws, both states prohibited local parking mandates.

In most cases, builders still include off-street parking, even without mandates. But these new state policies allow builders to respond to market demand, rather than making decisions based on fixed parking minimums.

Some states aimed to foster development of starter homes and small multifamily buildings

States also advanced reforms to allow starter homes on small lots and more “missing middle” homes, such as duplexes, triplexes, fourplexes, townhouses, and small apartment buildings. Kansas’ S.B. 418 allows homes with up to 2,500 square feet of living space to be built on lots that are 3,000 square feet or larger (as many as 14 homes per acre). The bill also streamlines the approval process for the development of new homes by allowing by-right permitting and reducing regulatory barriers. Idaho’s S. 1352 reduces minimum lot sizes for starter homes in new subdivisions larger than four acres in cities, allowing up to 12 homes per acre, with individual lots as small as 1,500 square feet. California’s S.B. 1116 allows homes averaging up to 1,750 square feet to be built on lots that average at least 600 square feet in districts zoned for multifamily use or 1,200 square feet in single-family zones. This new law clarifies and expands California’s Starter Home Revitalization Act, which was designed to streamline housing development.

These reforms can make it easier to build moderately priced homes.

New laws allow faith groups and other nonprofits to build on land they already own

Some faith groups and other nonprofits own land that they would like to use to develop housing, but zoning restrictions prevent them from building on the property. Several states have adopted new laws, often called “Yes in God’s Backyard” (YIGBY) reforms, that aspire to unlock this land for affordable and mixed-income housing. Five states—Colorado, Florida, New Jersey, Rhode Island, and Virginia—passed legislation in 2026 that addresses this challenge.

Florida (H.B. 1389), Kentucky (H.B. 333), and Virginia H.B. 1279 all took steps to allow religious groups to build housing on properties they already own. Colorado’s H.B. 26-1001 permits nonreligious nonprofits and schools to build housing on land they own.

Reforms of the permitting process reduce construction delays and lower costs

Even when zoning rules allow the construction of new housing, slow or unpredictable permitting processes can delay construction for months or even years. Delay and uncertainty increase costs.

Idaho’s H.B. 585 created “shot clocks” for electrical, plumbing, and HVAC permits, giving cities two to three business days to respond to an application. The new law also allows third-party inspections, which speeds up the construction process. Arizona’s S.B. 1566 prohibits “unreasonable” development-related delays, such as taking more than twice the county’s designated time for approving a permit. Maryland’s H.B. 548 ensures that permits are based on local regulations that were in effect when an application was submitted so that ordinances passed later—but before construction is completed—do not impede the development of new housing. Delaware’s S.B. 23 requires local governments to amend their official zoning maps to conform with any new comprehensive plan within 12 months of adopting or revising the plan. The law also streamlines the permitting and approval process to enable housing to be built more quickly.

With the passage of L.D. 128 in March 2026, Maine streamlined the development process for small multifamily buildings (up to four units). New York’s A. 10008 limits environmental review for most housing in already-developed areas. By one estimate, this change alone will speed up permitting and enable savings of up to $82,000 per unit in New York City.

States modernize building codes to reduce the costs of new apartments

Several states amended building codes that affect the cost and feasibility of small multifamily apartment buildings. Two laws in Michigan (H.B. 5570 and H.B. 5571) and Idaho’s H. 706 raised the height limit for small apartment buildings with one stairway. Prior research by The Pew Charitable Trusts shows that modern four-to-six-story buildings with only one stairway are at least as safe as other types of housing.

The state of Washington enacted two first-in-the-nation laws. S. 5156 directs the State Building Code Council to assess requirements for elevators that add cost but may not improve safety. It also requires adoption of standards for elevators that meet federal accessibility requirements but are smaller and probably less expensive than the large elevators commonly required in the U.S. (but not other countries). S. 6001 instructs the code council to adopt amendments to allow space- and cost-saving “scissor stairs”—two interlocking staircases within a single stairwell that are separated by a fire-rated wall.

These changes, though highly technical, can influence whether builders are able to deliver lower-priced multifamily homes, particularly on small or irregular lots.

New laws remove barriers to manufactured housing

Manufactured housing was another major focus of state action in 2026. Florida (H.B. 803), Idaho (H.B. 800), Maine (L.D. 2231), and Virginia (S.B. 346 and H.B. 655) addressed issues related to locations of manufactured homes, titling, and design standards. Virginia, for example, now requires local governments to allow manufactured homes to be installed wherever site-built housing is allowed, and to treat them the same as site-built housing. Maine now allows manufactured home owners who live on leased land the option to convert their house from personal to real property, removing a key barrier to mortgage financing for eligible borrowers. Mortgages save borrowers 10% on monthly payments and nearly $50,000 over the life of a modest $100,000 loan, compared with other types of financing that are commonly used by owners of manufactured homes.

These state efforts coincided with passage of the 21st Century ROAD to Housing Act, which changed the federal definition of a manufactured home: They can now be built either with a permanent chassis (the old requirement) or without one. This technical change allows more design flexibility: Homes can be built lower to the ground and can fit into a wider array of neighborhoods and lot sizes. Within a year, states must certify to the U.S. Department of Housing and Urban Development—which regulates manufactured housing—that they treat all manufactured homes the same, regardless of whether the home has a permanent chassis. Most states will have to make statutory changes to comply with the new federal law.

A single-section manufactured home can save a buyer more than $100,000 compared with the cost of a comparable site-built home. Additional state and local action is essential, however, because zoning, titling, transportation, installation, taxation, insurance, and financing rules shape whether manufactured homes can serve as a scalable option for providing lower-cost housing to American families.

2026 was a banner year for housing reform

The continued widespread progress in advancing practical solutions to expand housing supply and lower costs reflects a growing desire among state lawmakers and local advocates to work across ideological lines. Although the specific reforms vary from state to state, the changes share a common purpose: Legislatures are addressing rules that constrain housing production, add costs, or slow the approval process.

By allowing more homes near jobs, legalizing smaller and lower-cost types of housing, reducing unnecessary parking and permitting barriers, modernizing building codes, and supporting manufactured housing, states are creating conditions for development of a broader range of homes—and a more affordable housing market.

Chase Hatchett is a principal associate, Gabriel Kravitz is a senior manager, and Alex Horowitz is a project director with Pew’s housing policy initiative.