Next Experiment in the Laboratories of Democracy: Housing Progress

September 29, 2023

With the end of the California legislative session on September 14, several major housing bills were approved by the Legislature and sent to Governor Newsom’s desk. While attention has been focused on California, a number of other states have passed major housing reforms in 2023. 

A recent policy brief from the Mercatus Center at George Mason University highlights some of this year’s key housing legislative victories across the nation. Most states, though not all, had completed their legislative sessions by the time the brief was published in early August.

Key takeaways:

  1. Four states passed major housing “packages” in 2023: Montana, Rhode Island, Vermont, and Washington. Each of these states enacted a collection of policy reforms aiming to expand housing supply.
  2. Other states achieved smaller, yet still significant, housing victories. Bills to streamline permitting processes, expand residential uses in commercial zones, and make it easier to build ADUs were passed in multiple states.
  3. Major housing reforms were proposed in Arizona, Colorado, and New York but failed to pass. Ambitious and broad in scope, these bills attracted significant opposition.

In Montana, a deep red state, Republican state leaders were concerned about rising housing prices in the midst of considerable in-migration to Montana. To respond to Montana’s growing housing crisis, Governor Gianforte assembled a housing task force with a diverse membership to consider potential policy reforms and recommendations. 

At the end of the legislative session, Gianforte signed seven housing bills into law after receiving support from lawmakers of both political parties. Among other reforms, these bills streamlined permitting, allowed housing development in commercial zones, made it easier to build ADUs and tiny homes, and required cities to institute pro-housing regulatory changes. 

In a notable difference from other states, the Montana League of Cities and Towns supported the state-level land use reforms. 

Rhode Island passed a dozen new pro-housing bills in 2023. Many of these introduced procedural changes, such as establishing statewide rules for planning and requiring “specific and objective” standards for discretionary review. One bill created a statewide density bonus, and another requires municipalities with inclusionary zoning policies to offer larger density bonuses (at least two additional market-rate units per one deed-restricted affordable unit). 

Other legislation allowed adaptive reuse projects to be approved by-right and broadly legalized multifamily housing across the state. Interestingly, a bill that would have legalized ADUs did not pass in Rhode Island, though legislation allowing ADUs has been adopted relatively easily in California and other states.

Vermont consolidated all of its pro-housing reforms into one, sweeping bill, S. 100. The bill limits parking requirements, expands by-right approval, allows duplexes and fourplexes in most of the state, and limits density restrictions, among other changes. S. 100 also reforms state-level development review, including expanding exemptions for affordable housing. (Vermont uniquely requires larger developments to undergo both municipal-level and state-level review.)

In Washington, 2023 was “the year of housing” after years of gradual reforms and steadily growing attention to the issue of housing affordability and undersupply. The Washington legislature passed nine pro-housing laws, including bills that expanded exemptions from the State Environmental Policy Act, eased barriers to condo construction, limited design review, and moved toward enabling single-stair apartment buildings.

Though less comprehensive, other states also passed important pro-housing legislation. 

Surveying the national landscape, certain policy reforms were debated and passed in multiple states. Bills streamlining permitting processes were most commonly adopted, followed by bills expanding residential uses in commercial zones. Florida’s SB 102 allows adaptive reuse and new multifamily construction in commercial zones if some units are set aside for moderate- income households. 

Major housing reforms were proposed in Arizona, Colorado, and New York but failed to pass after facing fierce opposition from Republicans and suburban Democrats. Unlike Vermont S. 100, the proposed “everything bagel” bills in these states may have been too ambitious or broad in scope to pass. Further, Governors in Colorado and New York did not have smaller, less ambitious bills lined up as contingency plans if the whole package failed to pass.

What is clear from looking at a diversity of states is that stances on housing policies do not align clearly with political parties. Major pro-housing policies were adopted with bipartisan support in Florida, Montana, Vermont and Washington. Across different states, members of the same political party often take different stances on the same issue. The authors note that Texas Democrats and Rhode Island Republicans agreed on the issue of preserving local control over allowing ADUs statewide. 

Housing policy can create unlikely bedfellows.

It is often said that, “As California goes, so goes the nation.” While it’s true that many pro-housing policies have been exported from California, we also have a lot to learn from other states’ successes. 

Photo of houses by Enric Cruz López from Pexels