Policy Downloads
Housing affordability has emerged as one of the most economically and politically salient challenges across the US. In response, statewide legislation to encourage housing production continues to gain momentum. Based on reporting from academic researchers, think tanks, and contemporaneous media coverage, more than 20 states to date have adopted policies aimed at increasing the supply of housing. Policies range from legalizing accessory dwelling units and duplexes to setting quantitative production targets. Our previous research, released in late 2023, explored some of the early challenges related to implementing these policies, including limited staff capacity within state and local agencies and the need to set clear policy goals.
To learn how these challenges have evolved, the Lincoln Institute and Brookings Metro convened a workshop of state-level housing agencies, researchers, and other stakeholders in September 2024. Participants came from places with longstanding state involvement in land use and housing production (California, Massachusetts, Oregon, Washington) and places that have recently adopted legislation giving the state a broader role (Colorado, Florida, Maine, Utah).
Several themes emerged from that discussion, including the importance of states offering proactive guidance to localities and setting clear expectations about realistic outcomes. In this brief, we share some of the high-level lessons learned as states continue to adopt and implement statewide housing policy. (See below for a full list of participating organizations.)
The Political Landscape Around Housing Policy Continues to Evolve
When it comes to regulating housing production, the balance of power is shifting away from local governments and toward states. In the 1920s, when states first adopted zoning enabling acts, local governments were delegated the primary responsibility for regulating land use and housing production. The wave of statewide policy activity in the past five to six years represents a significant shift in political momentum—at least 20 states have adopted prohousing policies aimed at changing land use or development processes to remove barriers to housing production.
Of the states that participated in our workshop, in the last two years, several have adopted their first statewide policies meant to encourage housing production. These new policies include Florida’s Live Local Act, Colorado’s 2024 package of land use reforms, and the 2023 “Montana Miracle,” a bipartisan zoning reform package notable for the number and breadth of policies adopted in a single legislative session. During the same period, other states that already had some form of prohousing policies have expanded the scope of those policies or tightened up enforcement. Oregon adopted a new Housing Needs Assessment, which sets quantitative production targets for each locality. California has substantially expanded the Housing Accountability Unit that monitors and enforces local compliance with its Housing Element Law, through which the state allocates projected housing needs—and responsibility for changing zoning to accommodate those needs—to regional and local governments.
Within and across states, local governments’ reactions to this political shift have varied widely. Media stories have often focused on communities that refuse to comply with new state policies, sometimes leading to legal battles—but entrenched resistance is not the norm.
In Massachusetts, for example, nearly 180 cities and towns are subject to the new MBTA Communities Law, which requires them to designate multifamily districts near transit stations. The law is being phased in, with staggered deadlines from December 2023 to December 2025. As of November 2024, 60 percent of communities had already adopted districts to comply with the state guidelines. Some localities, such as Lexington—a town of about 34,000 people located 10 miles northwest of Boston—have gone above and beyond the required minimum baseline (e.g., rezoning an area for multifamily housing larger than that required for compliance).
By contrast, a few communities—or a subset of constituents within those communities—are hotly contesting the state’s new policies. In a closely watched case, the Massachusetts Supreme Court recently heard competing arguments from the Attorney General’s office and the town of Milton—a southern suburb of Boston that’s home to just over 28,000 people—about the state’s authority to override local zoning. While some local governments have pushed back over concrete details of statewide policies, such as building higher-density housing in areas without public water and sewer systems, some local opposition appears to be rooted in a reluctance to cede local control on principle.
Understanding political reactions to new statewide housing policies is important both for policymakers monitoring the implementation of those policies, and for legislators in other states considering whether to support proposed bills. Researchers and media should aim to portray an accurate, balanced picture of the full range of responses, from enthusiastic adopters to low-key compliers to outright resisters.
States Can Make Implementation Easier—or Harder—for Local Governments
The complexity of implementing state prohousing policies at the local level varies considerably based on policy design. To lighten the burden on localities and accelerate the timeline for new housing production, states should consider a legislative package that balances low-effort and high-effort implementation elements.
Some policies require relatively modest, or low-effort, changes to existing zoning code. Examples include reducing minimum parking requirements, removing design review from the approval process, or allowing ADUs with clear, objective parameters in single-family neighborhoods by right. Florida’s Live Local Act does not require local governments to amend their zoning at all; it gives developers the right to build certain types of multifamily projects in any area zoned for commercial, industrial, and mixed use, subject to existing dimensional and parking requirements. These types of simple tweaks can lead to a more predictable development environment and generate a faster housing market response.
By contrast, complex policies that give local governments flexibility in implementation may be politically more palatable, but they also require greater local effort and often take longer to implement. For example, setting quantitative production targets and allowing localities to choose where and how to rezone requires extensive planning. Colorado’s 2024 Transit-Oriented Communities Law establishes a three-year implementation timeline for localities to report housing goals and enact necessary policy changes to be certified as compliant by the state. In Maine, many rural counties do not have zoning laws, raising challenges for incorporating statewide guidelines. States can help speed up implementation of these higher-effort zoning changes by providing model codes and technical assistance funds to expand local capacity. Nevertheless, state governments should carefully weigh the frequency with which localities are expected to overhaul their zoning codes, especially for complex policy changes that require public hearings or approval by city councils or county supervisors.
Proactive Guidance Upfront Reduces the Need for Reactive, Punitive Action Later
States use a wide spectrum of policy tools to implement and enforce housing policies, ranging from proactive to reactive approaches. Policymakers across multiple states agree that investing in proactive tools reduces the need for reactive enforcement. When litigation becomes unavoidable, being able to demonstrate that the state provided localities adequate support to comply also bolsters the ability of attorney generals’ offices to defend state laws.
Proactive tools include technical assistance (TA), model codes, training, and specific guidance letters. All participating states except Florida offer designated TA funds to support localities with zoning revisions and reporting requirements. Maine’s Housing Opportunity Program offers grants to local governments that implement zoning and land use changes to increase housing production. In 2023, Washington passed HB 1110 requiring most cities to legalize middle housing; the state allocated $4.5 million in TA grants to localities for zoning amendments and developed model codes that become the default code in localities that fail to change their zoning by a given deadline. Similarly, Oregon’s HB 2001 (2019) required large cities to rezone for middle housing and provided a model code that would become applicable if jurisdictions maintained nonconforming land use policies past the implementation deadline.
Some states offer financial rewards to communities that either voluntarily adopt land use policies to increase housing production or exceed the minimum state requirements. For example, localities that earn prohousing designations through programs such as the Pro-Housing Designation Program in California and the Housing Choice Initiative in Massachusetts are eligible to apply for planning/infrastructure funds and may receive bonus points toward other competitive state grants.
Reactive and punitive approaches, such as financial penalties and lawsuits, should be the last resort for dealing with noncompliant localities. Financial penalties include direct fines and withholding state fiscal transfers to local governments. Oregon’s Land Conservation and Development Commission can withhold funds for general purpose aid and highway infrastructure from cities that don’t comply with the state’s land use goals.
Many local governments rely heavily on state grants to deliver public services. However, places with wealthy tax bases may be willing to bear the financial consequences rather than zone for more housing. When this happens, states are left with the politically unpopular option of taking legal action—the California Attorney General’s Office has initiated litigation against several noncompliant cities, while Massachusetts is facing its first MBTA Communities lawsuit, against Milton, as previously noted.
Setting the Right Expectations Can Help Avoid Stakeholder Frustration
Prohousing advocates need to set clear, realistic expectations about how policy changes could impact housing markets along two key dimensions: the length of time for production to visibly increase, and the size of possible changes in rents and prices.
As our previous research described, passing legislation at the state level is often the first step in a multistage process. In some cases, it may take three to four years before local governments fully incorporate new rules that allow more flexibility in housing development. For example, California requires localities to update their Housing Elements—required sections of a general plan—every eight years, to identify sites for new development, as well as local policies and programs that will lead to increased housing production. Massachusetts’ MBTA Communities Law was adopted in January 2021; the first set of communities subject to the law’s phased rollout were given until December 2023 to revise their zoning in compliance. And some states have found that the initial policy design created loopholes or features that limited the effectiveness, which required “cleanup bills” in subsequent legislative sessions to fix these problems.
Even after zoning goes into effect, noticeable changes in housing markets—building permits issued, new units completed—may take several years, depending on local market conditions. As previously discussed, some types of policy changes are faster and easier to implement, which increases the likelihood of seeing results quickly.
This extended timeframe for implementing and seeing results from new policies creates political risks. Elected officials and other stakeholders who support prohousing legislation with the expectation of fast results—say, before an approaching election—may be disappointed. Overpromising and underdelivering can generate severe backlash from voters and the media. Moreover, the durability of the political coalitions that have been coming together to pass state prohousing legislation is unclear. In some places, the stakeholders who supported policy changes do not have a long history of working together—Oregon’s coalition included representatives of the real estate industry and environmental groups, for instance—and these alliances may be difficult to sustain throughout the lengthy period needed for implementation.
Advocates should also be cautious about how they anticipate and communicate the potential magnitude of changes to housing prices and rents that are feasible with relatively small tweaks to policies. Standard Econ 101 models tell us that large increases in the supply of goods (e.g., building a lot more homes) will lead to large reductions in price levels, but smaller shifts in supply will correspond to small changes in prices (figure 2).
In a typical year, the US builds about 1.4 million new homes, or roughly 1% of the existing housing stock. Even a city that manages to boost annual housing production by 3 to 4 percent of existing homes is unlikely to see an absolute drop in prices or rents. Reaching a point where housing costs rise at the same rate as household incomes and overall inflation is a more reasonable goal—but may not be perceived as a “win” by voters and others who have set—or been wooed with—higher expectations.
Ongoing Evaluation and Research Are Challenging—and Critical to the Success of Prohousing Policies
As the number of states pursuing prohousing policies grows, the pressing question from critics and supporters is also the most difficult to answer: What is the effect of these policies on housing production and costs?
Monitoring and evaluating the effects of these policies is critical to ensuring their continued success. Increasing the evidence base can build support for adoption and implementation—but findings that indicate policy changes are not producing desired effects could provide equally valuable information, prompting state governments to identify remaining barriers and tweak their policies accordingly.
Researchers and state agencies seeking to understand how many homes have been built under these new prohousing laws face significant measurement challenges—there is a widespread need for better data and metrics on housing production, composition, and prices/rents. Only the decennial census tracks total housing units for specific geographic areas, and it does not align neatly with housing typologies targeted by recent policy changes (e.g., ADUs, townhomes, duplexes, triplexes). Asking the public to wait 10 years to find out if these policies are working as expected is a tough political sell for elected officials, so researchers and state agencies need to identify medium-term benchmarks for determining success.
Building permits are a widely used indicator of early-stage construction activity, but permits are issued by thousands of local building departments, which do not always record the information consistently. Only a few states, including Colorado and California, have a process for systematically tracking building permits statewide. Tracking building permits associated with specific statewide policies is desirable, and associating permits with certificates of occupancy is ideal to confirm actual production. But collecting comprehensive, in-depth housing production information is generally considered too burdensome. For this reason, large data aggregators such as CoreLogic, ATTOM, Zillow, and CoStar have become important players in this field, aiming to provide nationwide coverage in a standardized format. Their data is expensive, however, and the methods for processing and standardizing data fields are not entirely transparent. Details that could be important for enforcement may be lost in the process of standardization.
In light of these shortcomings, researchers using proprietary data have begun to document weaknesses and propose best practices for interpreting and augmenting the data with information from other sources. The accuracy of the data and metrics that state agencies use to monitor legal compliance matters enormously when states use them as the basis for taking legal action.
State agencies and academic researchers would benefit from partnering to tackle the measurement challenges and evaluate policy changes, but they don’t always speak the same language. Intermediary organizations—applied research centers such as NYU’s Furman Center or UC-Berkeley’s Terner Center, community development sections of the regional Federal Reserve Banks, or extension services at land grant universities—can help bridge the gap between researchers and policymakers. Several states, including Washington and Utah, have well-established connections with research centers at public universities and budget allocations to support collaborations.
Conclusion and Recommendations
State-level policies to encourage greater housing production are still a new part of the overall housing policy toolkit, compared to more established federal subsidy programs and local land use policies. Each state enters this space with its own economic, political, and institutional context, making the design and implementation of effective housing policies look slightly different from place to place. Current policy experimentation offers policymakers and researchers opportunities to better understand what works and what doesn’t in various housing market contexts—if we are diligent about monitoring progress, evaluating outcomes, and incorporating feedback.
Two principles should guide future policy design and implementation efforts. First, policymakers should be clear about a policy’s intended goals, identify appropriate metrics for monitoring over time, and set aside resources for implementation and evaluation. If any of these elements is lacking, the public is likelier to be disappointed in the outcomes. Second, it is essential to maintain feedback loops among legislators who write laws, state and local officials who implement policies on the ground, and developers who build homes. Sharing the lessons learned about the challenges and successes of implementation can help advocates and legislators focus their efforts on effective policies that result in more abundant and affordable homes.
Acknowledgments and Disclosures
Many thanks to the following organizations for participating in the September 2024 workshop: AARP Public Policy Institute, California Office of the Attorney General, California Department of Housing and Community Development, Colorado Energy Office, Colorado Governor’s Office, Colorado Department of Local Affairs, Dain Research, ECONorthwest and MapCraft, Federal Housing Finance Administration, Federal Reserve Bank of Minneapolis, Florida Housing Coalition, Maine Department of Community and Economic Development, Massachusetts Department of Housing and Community Development, Massachusetts Office of the Attorney General, Montana Department of Commerce, New York University Furman Center for Real Estate and Urban Policy, Oregon Department of Land Conservation and Community Development, Up for Growth, Utah Department of Workforce Service, Utah Governor’s Office, Washington Department of Commerce.
Funding for this project was provided by Arnold Ventures. The views expressed in this report are those of its authors and do not represent the views of the donors or their officers or employees.
Keywords
Housing, Public Policy