The United States is in a housing affordability crisis. Home prices and rents have soared in recent years, while many incomes have not kept up. Only about 15.5% of homes for sale in 2023 were affordable for a typical family, the lowest share in at least a decade. Millions of Americans struggle to pay rent or qualify for a mortgage. At the same time, experts point to a severe shortage of housing: the country is around 3.8 to 4 million homes short of what is needed.

Why haven’t we built enough homes? One big reason is zoning laws – local rules that dictate what kind of housing can be built in each area. For decades, many cities have had restrictive zoning that makes it hard to add new housing, especially affordable types like apartments, townhomes, or duplexes. Around 70% of residential land in major U.S. cities is zoned exclusively for single-family homes (no apartments or multifamily units allowed). Such rules limit how many homes can be built, throttle the housing supply and drive up prices.

As housing costs strain most American households, policymakers are asking if changing these zoning laws could help. In this article, we examine whether new and proposed zoning reforms – especially those focused on residential housing – could significantly improve affordability.

The Housing Affordability Crisis

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Housing has become alarmingly expensive in many parts of the country. In 2021, home purchase prices jumped nearly 20% in one year and rents also surged. The COVID-19 pandemic housing boom, followed by rising interest rates, pushed homeownership out of reach for many. By 2023, the median monthly payment on a typical house (with 20% down) was about 46% higher than it was in early 2020. Rental costs hit record highs in many cities as well.

A key metric is the share of income people spend on housing. If a family spends more than 30% of income on housing, they are considered “cost-burdened.” Today about one-third of U.S. households are cost-burdened by this definition, meaning housing is eating up a large chunk of their budget.

The Supply Shortfall

For lower-income families, the situation is even more dire – there are far fewer affordable units available than the number of families who need them. In 2023, HUD reported that for every 100 extremely low-income renter households, only 36 affordable units were available, highlighting a huge gap for the poorest Americans.

One major cause of this affordability crisis is the housing supply shortfall. Ever since the mid-2000s housing crash, homebuilding in the U.S. did not keep pace with population growth. Estimates of the national housing deficit range from about 3.8 million units on up. Zillow’s research notes that home construction lagged demand for years, creating a “chronic shortage” of inventory. When there are more people looking for homes than homes available, prices naturally rise. Economists across the political spectrum agree that building more housing is essential to make homes affordable again.

How Zoning Laws Affect Housing Supply

Zoning laws decide what can be built where – for instance, they might say a certain lot can only have one single-family house, not an apartment building or even a duplex. Traditional zoning separated residential, commercial, and industrial areas and often imposed strict limits on housing density (how many homes per acre). While zoning can serve useful purposes in planning communities, overly restrictive residential zoning has severely limited housing growth.

For decades, many cities banned apartments on most residential land. In many U.S. cities about 75% of residential land is zoned only for single-family houses. This means on three-quarters of the land, a builder cannot construct townhouses, duplexes, or condos – even if there is high demand for those housing types. These rules effectively “ban” affordable housing options like small multifamily buildings in large swaths of communities. They also encourage urban sprawl (because new housing gets pushed to far-out areas where land is cheaper and zoning is looser).

Expert Consensus on Restrictive Zoning

Experts overwhelmingly argue that restrictive zoning drives up housing costs. By barring higher-density housing, zoning caps the number of homes that can be built, artificially throttling supply and inflating prices. A recent panel of over 100 economists and housing experts found that 73% of them ranked zoning reform as one of the most effective strategies to improve affordability.

In addition to limits on density, other zoning-related rules can raise costs – such as large minimum lot sizes (forcing each home to sit on a big piece of land), strict building height limits, and parking requirements that add expense. All these regulations make it more expensive or sometimes impossible to build affordable types of housing. Research suggests that regulatory barriers (including zoning and permitting hurdles) can add up to 41% to the cost of new multifamily housing.

New State-Level Zoning Reforms

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In recent years, a growing number of states have enacted laws to override or reform local zoning in order to spur more housing construction. This is a notable shift, because zoning was traditionally left to local city or county governments. But as housing costs have become a statewide concern, many state legislatures are pushing cities to allow more development. Here are some key state-level changes:

Oregon

A pioneer in reform, Oregon passed a law in 2019 (House Bill 2001) that effectively ended single-family-only zoning in the state’s larger cities. Cities above a certain size must now allow “missing middle” housing (duplexes, triplexes, fourplexes, and cottage clusters) in formerly single-family zones. This opened the door for small multifamily homes in neighborhoods that for decades were off-limits to anything but one house per lot.

California

The nation’s most populous state has passed a series of pro-housing bills. In 2021, California enacted Senate Bill 9, which lets homeowners build up to two homes on a lot by right (and up to four units if the lot is split). Essentially, SB 9 ended single-family exclusivity statewide by legalizing duplexes on most lots.

California also strengthened laws to encourage Accessory Dwelling Units (ADUs) (small backyard cottages or in-law apartments). Thanks to multiple rounds of legislation reducing fees and red tape, ADU construction boomed – Los Angeles County now permits more ADUs per capita than any other county in California. In 2022 and 2023, California passed additional laws to make it easier to convert underused commercial properties into housing and to streamline housing approvals. Over 30 housing-related bills became law in California in 2024 alone.

Washington

Lawmakers in Washington State passed a landmark package including a law to legalize duplexes, triplexes, and fourplexes in most urban neighborhoods statewide. This means cities can no longer zone entire residential areas for single houses only – they must allow at least 2–4 units per lot in many cases. Washington also eliminated parking space minimums near public transit and encouraged transit-oriented development.

The expected impact is huge: over the coming decades, these reforms could enable tens of thousands (even hundreds of thousands) of new homes to be built in walkable, lower-cost communities across Washington. In 2024, the state followed up by legalizing co-living homes (shared housing arrangements) and updating building codes to ease modular and middle housing construction.

Colorado

In 2023 and 2024, Colorado moved to require higher-density zoning in certain areas. A 2024 law mandates that 31 cities designate areas for high-density housing near transit stops, with incentives for compliance. Colorado also passed laws to make ADUs legal statewide (overriding local bans) and to limit cities from imposing excessive parking requirements for new developments.

Another unique Colorado law aims to curb frivolous lawsuits that block housing: if residents sue to stop a project and lose, they may have to reimburse the city’s legal costs. And developers can proceed with projects during litigation, preventing long delays. These measures seek to unclog the approval pipeline and get homes built faster.

Other States

Arizona required its larger cities (75,000+ residents) to allow ADUs and small multiplexes by right. This means cities like Phoenix, Tucson, and others must permit property owners to add a casita in the backyard or convert a single-family home into a triplex without onerous special approvals. Arizona also made it easier to convert vacant offices to apartments.

Several northeastern states with historically strict zoning have taken action. New Jersey has a long-standing “fair share” law requiring each town to plan for affordable housing. Massachusetts implemented a law forcing communities served by the Boston-area transit system to zone for multifamily housing near train stations. Maine now requires towns to allow up to four units on most residential lots, and Vermont streamlined regulations for missing middle housing. Even Utah and Rhode Island enacted bills to ease local zoning.

City and Local Zoning Changes

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Not all zoning reform is coming from state capitols – many cities themselves have started updating their zoning codes to permit more housing.

Minneapolis

In 2018, Minneapolis made history as the first major U.S. city to eliminate single-family-only zoning citywide. Under its Minneapolis 2040 plan, every neighborhood now allows up to three homes on what used to be a single-family lot. This “triplex law” grabbed headlines and inspired other cities.

Early results showed only a modest number of new duplexes and triplexes in the first couple of years (permits for such units rose from just 13 in 2015 to 53 in 2021). This isn’t a huge wave of construction yet, but it represents a culture shift – showing that adding small multifamily homes in all neighborhoods is possible. Minneapolis also ended parking minimums and loosened rules on ADUs and small apartment buildings near transit. Early data indicated Minneapolis’s overall housing production accelerated and rent growth slowed relative to other cities.

New York City

In 2023, New York City’s council approved a major zoning update known as the “City of Yes” plan. This plan will allow more housing types in low-density areas (including ADUs), make it easier to convert unused offices into apartments, and cut red tape for new housing construction. The City of Yes reforms aim to facilitate 80,000 new homes over the next 15 years in New York.

Given NYC’s scale, these changes range from permitting basement apartments and backyard cottages to eliminating certain height limits that prevented apartment buildings. The focus is on using New York’s existing developed land more efficiently. Office-to-residential conversions have gained momentum in many cities post-pandemic; over 55,000 housing units were begun in 2024 in the U.S. through office conversion projects.

Other Cities

Many other local governments have pursued similar reforms. Seattle upzoned several neighborhoods and removed parking minimums near transit. Portland, OR allowed fourplexes on most lots (even slightly ahead of the state mandate) and even a sixplex if it includes affordable units. Boston has encouraged more multifamily housing near transit stops through its zoning overlays.

Berkeley, CA, the city that pioneered single-family zoning a century ago, voted in 2021 to end single-family zoning by 2022. Charlotte, NC eliminated single-family zoning in a 2021 plan, allowing duplexes and triplexes citywide. And dozens of cities – big and small – have legalized ADUs in recent years, seeing them as a relatively easy way to add lower-cost rental units or extended-family housing.

Early Outcomes and Ongoing Challenges

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Zoning reform is still a fairly new phenomenon, and its full effects will take years to play out. Early signs show both progress and challenges.

Progress in Housing Production

On the positive side, housing production is ticking up in some reform-minded areas. After Oregon’s law and Portland’s local rezoning, developers started planning more middle-density projects. In California, accessory dwelling units surged once rules were relaxed – by 2022, California cities were issuing tens of thousands of ADU permits each year (a huge increase from just a few years prior).

Los Angeles alone went from virtually zero ADUs to making ADUs a large share of all new housing units, providing new rental options tucked in existing neighborhoods. Office-to-housing conversions have started contributing significant numbers of units.

Furthermore, there are reports that rent increases have slowed in cities that added supply. Minneapolis saw rent growth moderate and even slight declines in some recent years, which some observers tie to its pro-housing policies and a healthy rental construction pipeline. Houston (which has no traditional zoning) and many Sunbelt cities that allow easier building have maintained relatively lower home prices than coastal cities, indicating that abundant new construction helps keep costs down.

Implementation Challenges

One challenge is that zoning changes don’t produce new housing overnight. It takes time for developers to respond and for projects to pencil out. In Minneapolis’s case, only a few dozen new triplexes were built in the first couple of years – a modest uptick, not a flood.

In California, a 2023 study found that SB 9 (the duplex law) had a slow start: across many major cities, very few SB 9 projects had been approved in the first year (Los Angeles led with 38 approvals, while several cities had none). Homeowners didn’t rush to split lots or add units, for various reasons: construction can be expensive, some local processes were still convoluted, and many owners weren’t aware or interested yet.

Local Pushback and Infrastructure Concerns

Another challenge is local pushback and implementation hurdles. Zoning reforms often face opposition from residents worried about neighborhood character, property values, traffic, or school crowding. Some cities have been slow-walking implementation or adding new rules that limit the effect of state mandates. Legal battles are also happening: in California, some homeowner groups and even cities have filed lawsuits against state housing laws.

Infrastructure is another concern. Allowing more homes in a neighborhood raises questions about whether the area’s roads, sewers, water lines, and schools can handle more people. Many suburban communities originally zoned only for a few homes per acre are worried that duplexes or apartments will bring traffic or strain water supply. If zoning changes enable an area to grow, municipalities may need to invest in transit, expand utilities, and ensure services keep up. States like California and Colorado are providing incentives and funding for infrastructure in cities that proactively upzone.

Environmental Considerations

More compact zoning can be better for the environment overall. When housing is forbidden in city centers or close-in suburbs, it often gets built on the urban fringe – consuming farmland and wilderness, and forcing longer car commutes. Research shows that single-family suburban development produces higher greenhouse gas emissions per person than denser city development.

By reducing sprawl, zoning reform can help cut vehicle miles traveled and preserve open space. It encourages building housing where infrastructure already exists rather than extending into undeveloped areas. That said, infill development can raise local environmental issues – like loss of tree canopy in neighborhoods or added stormwater runoff. Many planners argue that sustainable development goes hand in hand with zoning reform: allowing more people to live in walkable, transit-served neighborhoods means fewer cars on the road and less pressure to build in ecologically sensitive areas.

Future Outlook: Will Zoning Reform Make Housing Affordable?

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Looking ahead, there is cautious optimism among housing economists that current zoning reforms will meaningfully improve affordability – but likely gradually, not overnight. If more states and cities continue on this path, the cumulative effect could be significant.

One expected impact is an increase in overall housing construction in the next 5–10 years. As developers get used to new rules, we could see a wave of medium-density projects (duplexes, fourplexes, small apartment buildings) in places where they were previously banned. These kinds of units tend to be cheaper to build per unit than large single-family homes, and they can serve moderate-income families.

A boost in supply – especially in high-demand metro areas – should help tame the extreme price growth of recent years. Instead of home prices rising 10% a year, more plentiful supply could keep growth closer to inflation or even flat in some markets, allowing incomes to catch up. In some cities we might even see rent decreases if construction outpaces population growth.

Policy Innovation and Federal Involvement

Another likely development is continued policy innovation. Zoning reform isn’t a one-time switch; many jurisdictions will refine their rules further. States might add affordability requirements or incentives to ensure that some of the new units coming online are within reach of low-income households.

There’s also discussion of federal initiatives: the White House’s Housing Supply Action Plan (2022) proposed tying some transportation and community development funding to local zoning reforms. A bipartisan bill in Congress has been floated to create grants for local governments that modernize their zoning and permitting processes.

One big question is how these reforms will interact with the broader economy. If interest rates remain high, building activity might stay subdued even if zoning allows it – since developers need financing and buyers need mortgages. Affordability also hinges on income growth and programs like housing vouchers or tax credits.

Zoning reform doesn’t directly create subsidized housing for the poorest families, so additional policies are needed to address low-income housing (like expanding tax credits for affordable housing). The ideal scenario is a combination of more market-rate supply (through zoning reform) and more subsidized housing for those whom the market still won’t serve.

Conclusion

Will these zoning reforms significantly improve housing affordability? Most experts say yes – but over time. We should expect a modest impact in the near term, growing to a more noticeable impact in the longer term. If the reforms stay in place and are expanded, the housing market 5-10 years from now could look quite different, with more abundant options and slower price gains.

One analysis of Washington State’s 2023 reforms projected that in the “decades ahead, tens of thousands of people will be able to live in homes they can afford” because of these changes. That is a hopeful outlook, suggesting a major easing of the crisis as the housing stock fills in.

Of course, zoning reform alone won’t make San Francisco or New York cheap overnight – those places have such pent-up demand and other building constraints that affordability will likely remain a challenge. However, even in expensive markets, adding more units can prevent further extreme price spikes and provide more choices at different price points.

New and proposed zoning laws are poised to help improve housing affordability, especially when combined with other housing policies. They remove artificial limits on housing, allowing the market to be more responsive to what people need. Early adopters have shown it’s possible to reform zoning in ways that maintain community character while welcoming more neighbors. The process is gradual and requires balancing interests, but momentum is building. If current trends continue, the next generation of Americans may find it easier to rent or buy a home without breaking the bank – thanks in part to the zoning reforms being put in place today.

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