Legislative whiffs—and a few wins—on state housing reform
In a recent piece for RealClearInvestigations, urban experts Joel Kotkin and Wendell Cox lamented that “housing affordability stands at the lowest level ever recorded, while one in three Americans now spend over 30% of their income on mortgage or rent.” Try telling that to state lawmakers. With the vast majority of solons back home for the year, progress on dwelling-space deregulation has been decidedly mixed.
Booming Arizona found itself on the disappointment side of the ledger. In March, Tucson’s daily reported that the Republican-controlled “House rejected a measure giving churches the right to put homes on their land, amid worries that established neighborhoods would be overrun with high-density housing, that developers would take advantage of leases and even that witches could move in.”
It was a bitter defeat for the “Yes in God’s Backyard” movement. Per Shelterforce’s Frances Nguyen, YIGBY’s “premise is to allow religious institutions—historically large landowners in the U.S.—to participate in solving the housing crisis by repurposing underutilized religious land to accommodate affordable housing.” The specific goal is “to remove restrictive zoning laws that prohibit religious property from being used for anything else.”
Grand Canyon State legislators flubbed another opportunity when they failed to pass the Arizona Starter Homes Act. Tempe YIMBY praised the bill’s provisions, which blocked cities with more than 70,000 residents from imposing “minimum lot sizes larger than 3,000 square feet on new developments bigger than 5 acres of land,” prohibited “what materials or designs are used when building single family homes,” and proscribed requirements for “certain amenities in homes,” as well as the micromanagement of “floor plans.”
The status quo’s usual suspects provided fierce opposition. Mary Crozier, president of the North Central Phoenix Homeowners Association, derided Senate Bill 1229 as “one-size-fits-all,” and conjured images of “party houses and rental homes” monopolizing “areas that could benefit single-family residents and drivers of our local economy.”
The outcome was completely different two states to the east. The Texas Starter Homes Act sailed through both chambers and was signed by Gov. Greg Abbott. As described by one of its authors, SB 15 nixes “city-imposed minimum lot sizes greater than 3,000 square feet for new subdivisions in cities with populations (greater than) 150,000” and “counties with 300,000-plus residents.” Texas Policy Research Action called the legislation “a strong … measure that addresses Texas’ escalating housing affordability crisis by placing clear and reasonable limits on municipal zoning regulations in high-growth urban areas.”
And the Lone Star State adopted two additional reforms that are likely to be impactful: House Bill 24 targets the “tyrant’s veto,” whereby property owners are legally empowered to challenge zoning changes in their neighborhoods, while Senate Bill 840 OKs “mixed-use and residential development on commercial properties by right.” Even Texas can stumble on housing deregulation, though—SB 673, which would have expanded accessory dwelling units (ADUs), passed the Senate but not the House.
Heading north, Minnesota’s lawmakers, divided almost exactly between the GOP and DFL (Democratic-Farm-Labor Party), considered a broad selection of affordable-housing bills before they adjourned on May 19. None of the proposals survived. The Minnesota Starter Home Act, “championed by Sen. Jordan Rasmusson, R-Fergus Falls, and a bipartisan group of legislators,” focused “on increasing the supply of starter homes by removing regulatory barriers that drive up construction costs.” It failed to garner a floor vote.
The same fate befell the Transforming Main Street Act and More Homes-Right Places Act. Tahra Hoops, of the Chamber of Progress, observed that taxpayer-funded lobbyists for “city governments packed committee hearings to protest the bills,” with the League of Minnesota Cities and the Coalition of Greater Minnesota Cities “trotting out familiar arguments,” such as the burden of new infrastructure expenditures and the need to maintain authority “to respond to their residents’ concerns.” (“It’s the same home-rule refrain … leave it to local government, we know best.”)
In New England, Connecticut’s deeply Democratic Legislature embraced a 91-page behemoth. Edward Stringham, the Shelby Cullom Davis Professor of American Business at Trinity College, liked several of the bill’s provisions, such as relief from parking mandates and a requirement that “localities … approve ‘middle housing’ (such as duplexes and triplexes) on land zoned for commercial use.” But the demerits were considerable. According to Stringham, they included an order that Connecticut’s 169 cities and towns “submit plans to the state’s secretary on how the town will have a certain number of new housing units that will have price controls for no less than 40 years.”
Equally bothersome, “all municipalities with 15,000 or more residents” were forced to “create ‘fair rent commissions,’ a benign sounding form of rent control that would give government the ability to conduct hearings whenever they think agreed-upon prices are too high.” Finally, the bill would have made Connecticut the first state to criminalize “revenue management software”—i.e., algorithms that assist landlords in setting rent rates. (Stringham: “Banning this technology solely because prices have been high due to zoning restrictions would be akin to banning weather forecasters for reporting the rain.”) Defying his own party, Gov. Ned Lamont concluded that the legislation’s risk exceeded any potential rewards, and issued a veto.
There’s not much state lawmaking left in 2025, but perhaps a few more victories are possible in an unlikely place: California. During last-minute budget negotiations in June, Gov. Gavin Newsom predicated his signing of the budget on the passage of a wide-ranging reform to the state’s landmark environmental law, the California Environmental Quality Act (CEQA). He succeeded. As summer recess approaches, there are still other major housing bills that are alive, including Senate Bill 79, which provides by-right approvals for multi-family housing projects near transit stations, and Assembly Bill 253, which provides a “shot clock” for housing construction permits.
Let’s hope for the best. Any win would be welcome. In 2025, states took little action to address one of the nation’s worst economic problems. Maybe they’ll do better on housing in 2026.
