Research Report Incentivizing Housing Production
Subtitle
State Laws from across the Country to Encourage or Require Municipal Action
Shazia Manji, Truman Braslaw, Chae Kim, Elizabeth Kneebone, Carolina Reid, Yonah Freemark
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Fact sheets

For decades, the United States has produced housing at an inadequate rate that has not kept pace with the nation’s growth in population and wealth. This underproduction has reduced housing affordability in communities nationwide. Recent projections estimate that the US is short millions of units, and that certain states, like California, have a particularly significant gap between the number of units needed and those being produced. Numerous factors contribute to this shortfall in housing production, including high construction costs, household income inequality, and limited availability of construction materials. Local land use regulations, such as zoning policies, also play an important role. These regulations shape the scale and location of new housing development and can influence development costs. Some municipalities leverage local zoning to limit new housing construction and prevent lower-income families from moving in.

State governments can implement laws designed to encourage or require changes in municipal land-use policies to counter these limitations. Beginning in the late 1960s, several state legislatures and courts began requiring that municipalities allow the construction of affordable housing. For example, since the 1970s, California’s housing element statutes have required municipalities to zone enough land for residential use to meet their future housing needs, including for lower-income households. Some states have also used “smart growth” mechanisms to protect green space on the edge of urban areas while spurring infill construction on already developed land.

In this paper, we present insights from the first nationwide database of state pro-housing laws. Though this database is not comprehensive, it is the largest yet assembled and includes 144 laws. We establish a typology illustrating how states around the country are attempting to influence local government action on housing production and access. This typology, which we developed through iterative review of state laws, can be used to demonstrate the different approaches states have taken to advance housing production. Through examples of laws from a cross section of states, we show the variety of tools that states have implemented, including the following:

  • requiring localities to plan for the housing needs of their respective regions
  • implementing state standards for local land use and planning regulations
  • providing carrots for municipalities to incentivize some kind of production goal
  • imposing sticks to penalize jurisdictions for failing to carry out their housing production obligations.

Through this typology, and illustrated through a sample of laws from states across the country, we provide a roadmap to understanding how state intervention in local land-use laws can expand the supply of and improve access to housing.

Research and Evidence Housing and Communities Technology and Data
Expertise Thriving Cities and Neighborhoods Urban Development and Transportation
Tags State governance Housing affordability and supply Housing markets Fair housing and housing discrimination Land use and zoning Data collection Qualitative data analysis