The role of states in shaping local housing strategies
Last updated on: April 8, 2025
Overview
States play a vital role in local housing policy by shaping, enabling, and influencing local housing strategies through legislation, regulation, and funding. This brief discusses three such areas: 1) state authorization or preemption of local housing policies, 2) state requirements and support for local housing planning, and 3) state housing programs and policies, including the administration of federal housing funds. The last section of this page also provides examples of each aspect of state housing policy and suggests additional resources for further exploration. We conclude that understanding state policies is key for local governments and advocates who wish to promote effective housing solutions that enhance affordability and accessibility.
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State authorization or preemption of local housing policies
In the United States, land use and zoning regulations are largely a local matter. However, state legislatures and courts have power over land use and property law in most contexts and, thus, the authority to delegate or preempt local powers over many housing-related policies. While there are a variety of different legal frameworks for describing the balance of power between states and localities, these frameworks can generally be categorized into two primary systems: 1) narrow local government authority dictated by Dillon’s Rule, and 2) broader local government authority dictated by Home Rule. It is important to understand these common legal principles behind local government authority.
Authorization - Dillon’s Rule and Home Rule
In states that use Dillon’s Rule, a municipality can only exercise the powers explicitly granted to them by the state. To ensure that local governments can adopt and implement a wide range of effective policy tools, states that use Dillon’s Rule will need to adopt explicit authorizing language giving localities the ability to use these tools. In Home Rule states, by contrast, municipalities have been delegated broad power to set policy in designated categories, which means that local governments can act freely in those areas unless the state has explicitly prohibited certain policies. For more information on the differences between Dillon’s Rule and Home Rule states, see this National League of Cities article on the delegation of power. Understanding the state regulatory environment on topics such as land use and rent control is critical to enabling local governments to develop effective housing policy strategies.
Preemption
Preemption is a legal concept that dictates when a higher level of government (including the federal or state governments) exercises its authority to limit, or even eliminate, the power of a lower level of government to act or regulate. There are also different types of preemption. Preemption as a concept must cover cases (1) where there is direct conflict between levels of government, (2) when there is express preemption and a state law is directly opposed to localities taking a specific action, and (3) when there is implied preemption, typically where a state’s work within a “field” of law is so pervasive it implies they intend to preempt local law in that field. You can view additional state preemption examples from Cornell Law School and from the National League of Cities.
Examples of authorization and preemption flashpoints in local housing policy
There are several specific local housing policy tools that some Home Rule states have restricted, and Dillon’s Rule states have declined to authorize. The National League of Cities’ 2020 guide Local Tools to Address Housing Affordability reviews four of these: inclusionary zoning, rent control, local housing trust funds, and source of income protections. Another common issue is limits in state law on the duration of covenants designed to ensure long-term affordability. Some states limit localities’ ability to issue general obligation bonds or raise taxes to generate funding for affordable housing.
These limitations are sometimes expressly provided in state regulations, statutes, or the state constitution. Sometimes, the general absence of state authorization restricts action. In other cases, the limitations are imposed based on state court interpretations of state legislation or regulations. For example, California and Colorado courts had construed state statutes related to rent control as preempting and restricting localities’ ability to apply inclusionary zoning ordinances that set rents on new rental housing developments. To the extent such court opinions are interpreting statutes, rather than constitutional issues, the state legislature and executive can amend the statute to clarify intent and overturn the court’s interpretation. This approach is illustrated by the fact that legislation was adopted by the state of California in 2017 (AB 1505) and Colorado in 2021 (HB-1117), restoring a city’s ability to apply inclusionary zoning policies to rental developments after these court decisions.
The role of local advocacy in shaping state housing policy
Given the key role of states in shaping housing policy, there are several ways collaboration and advocacy at the local level can inform state policy decisions. Localities within a state can work together to influence state action or decisions. Local governments can benefit from forming alliances to advocate for state-level policies that incentivize housing development or support funding for affordable housing. Building these coalitions can help localities adopt stronger housing policies. Pro-housing advocacy groups also drive change for local and state-level intervention and reforms. For example, the Casita Coalition has played an important role in promoting “missing middle housing” in California, and organizations like the Welcoming Neighbors Network support pro-housing advocates working at both the local and state levels across the country. Local advocacy movements have been pivotal in advancing housing reforms across the country, particularly land use and zoning reform.
State support of local housing planning
Beyond ensuring that localities are authorized to adopt a robust toolkit of housing policies, states can promote local housing strategies in several ways. They can: 1) require localities to develop a housing strategy or plan, 2) promote regional housing planning, 3) provide policy guidance or technical assistance, and 4) offer funding for localities to develop these plans.
Requiring the development of local housing strategies or plans
States wishing to promote more widespread development of local housing strategies can require localities to develop housing strategies or plans. Many states have minimum planning requirements that lay out expectations for local planning efforts. Some, but not all, of these states have a “housing element” that specifically requires localities to describe how their planning helps meet the state’s housing goals.
As of 2017, fifteen states required municipalities to prepare comprehensive or general plans that include a housing element. Seven additional states required comprehensive or general plans with a housing element if localities wished to adopt zoning or maintain a planning commission. A 2023 study from the Terner Center reviewing state laws promoting housing development found approximately 70 laws across the country requiring localities to identify and address their housing needs. Requirements for what these housing elements must include vary by state.
Promoting the development of regional housing strategies
State policy may require localities to develop a regional housing strategy coordinating housing policies across multiple localities to improve their impact and accessibility within a region. A regional strategy can be useful in housing markets where multiple local governments can pool resources to improve housing outcomes for residents in the entire region.
Providing policy guidance and technical assistance
States can also offer policy guidance and technical assistance (TA) to localities to support them in adopting effective local housing approaches. States may also be able to develop or share model policies that localities could adopt if they wished to support affordable housing. In some cases, technical assistance is built into state laws that mandate localities to develop housing plans.
Funding the development of local housing policies
Some states offer planning grants to help localities develop and refine local housing policies. The role of state funding sources is particularly important in smaller cities and counties that do not receive direct federal program funding. The section titled “States’ role in funding affordable housing” explains this in more detail.
State housing policies and programs
In addition to helping localities develop more effective local housing strategies, states develop policies and programs that can go beyond housing plans to create more standard approaches to housing development statewide. This includes zoning reform and policies encouraging all localities to provide their “fair share” of regional/statewide affordable housing needs. The section below provides examples of some of these policies.
State-mandated zoning and land use changes to facilitate the construction of higher-density housing
States can mandate that localities review their zoning ordinances to identify and remove unnecessary obstacles to multifamily housing development. This requirement can include providing a menu of options for changing local zoning ordinances to allow for modest density increases in neighborhoods zoned for single-family homes. It can also involve more prescriptive efforts, such as the state setting a minimum standard or “floor” on land use regulations or preempting local regulations if localities do not make the necessary changes within a specific deadline.
Many localities have adopted zoning codes that support the development of single-family housing but do not allow for the development of so-called “missing middle housing” in many of their residential areas. Many states have adopted legislation authorizing or incentivizing local zoning to permit accessory dwelling units (ADUs) in single-family neighborhoods. Facilitating the development of ADUs through state legislation can help expand access to resource-rich areas for lower-income households and create an additional source of income for existing homeowners.
In addition to single-family zoning, obstacles to building more housing may include requirements for large lot sizes, minimum parking standards, setback requirements, and other land use regulations that make it challenging to build multifamily structures on otherwise developable sites. States can also encourage localities to allow for the development of higher-density housing in their zoning codes. This can be done by permitting such developments as-of-right in some single-family zoned areas or within a specific distance to public transit. Additionally, states can allow local governments to offer a density bonus to developers in certain cases, which can help support affordable housing production.
Streamlining development review processes
States can mandate that local governments establish streamlined development and zoning review processes for projects that meet specific criteria. This can involve either eliminating localities’ ability to make certain development and zoning decisions or establishing specific timelines for them to make those decisions. For example, the California legislature passed Senate Bill 9 in 2021, requiring that local review for lot splits and duplexes in single-family zones be conducted “ministerially” (i.e., an objective and consistent process rather than one that handles each case individually or based on discretion). The California Department of Housing and Community Development and regional governments provided technical assistance on what projects were exempt from discretionary reviews under the law, such as this overview from the Association of Bay Area Governments. The Terner Center has examined the implementation and impacts of this state law, and more recent legislation now requires local governments to approve or deny qualifying lot splits and duplexes within 60 days of receiving an application.
“Fair Share” and affordable housing distribution policies
Some states require localities to provide a “fair share” of the region’s affordable housing stock and thus provide political cover for local efforts to expand housing affordability. A locality’s failure to meet its obligation to build a particular number of units may trigger consequences for that locality based on state law.
One approach to promoting the distribution of affordable housing across the state is that if a locality fails to meet its mandated housing goals, affordable housing developers can, under state law, override local zoning restrictions to build a qualifying housing development. This is known as “builder’s remedy,” one of several tools states can use to enforce local housing plans and land use reforms. For example, in California, the Housing Accountability Act and Housing Element Law allow developers of affordable housing to bypass local zoning if cities are not in compliance. This resource illustrates how California’s laws can help prevent local governments from undermining their fair share responsibilities under the Housing Element laws.
States’ role in funding affordable housing
While cities, towns, and counties have an important role to play in the funding process for affordable housing, states also have the power to establish their own funding streams. In addition to state funding for direct assistance to renters, such as housing vouchers or rental assistance programs, states can fund their affordable housing supply by granting state housing tax credits, activating the reserves of local housing finance agencies, and establishing dedicated revenue sources that can contribute to a housing trust fund. You can learn more about states’ role in establishing funding streams and administering federal housing funds.
Conclusion
States significantly influence housing policy through regulations, local planning requirements, and funding for housing programs and policy-making. Therefore, it is important for localities to be well-informed so they can actively participate in shaping these policies and advocate for their needs. State and local governments each have a critical role to play in housing policy design and implementation. By collaborating, they can determine the best approaches to achieve housing affordability and equity goals for their jurisdictions.
Examples
State authorization or preemption of local housing policies
- States nationwide have passed laws to prevent discrimination against renters who use federal Housing Choice vouchers. This brief from the Urban Institute examines the case studies of two states that took different approaches: Oregon, which outlawed discrimination against voucher holders in 2013; and Texas, which preempted local governments from adopting such protections.
- Many state legislatures are now considering enacting policies to overcome exclusionary zoning, create state-level rent voucher programs, reform eviction laws, and offer tax incentives for rental housing. These topics are explored in the Furman Center’s 2023 policy briefs on Critical Land Use and Housing Issues for New York State.
State support of local housing planning
Requiring the development of local housing strategies or plans:
- The State of California not only requires that each locality complete a general plan, the state’s equivalent of a comprehensive plan, but also that each plan include a “housing element” examining housing needs and demands. Localities must also analyze regulations to ensure that they are not unreasonably preventing housing development to meet demand. To assist localities, the state has outlined the elements of a housing analysis and provided guidance on how to complete it in Building Blocks: A Comprehensive Housing-Element Guide.
- Wisconsin also has robust conditions that must be met in the housing element of a local comprehensive plan, which include identifying policies and programs that: promote the development of affordable housing, promote the availability of land for developing low-income housing, and maintain or rehabilitate the local housing stock. In 2020, Wisconsin published its third edition of Housing Wisconsin, a guide to preparing the housing element of Wisconsin’s mandated local comprehensive plan.
Promoting the development of regional housing strategies:
- The Georgia Planning Act lays out requirements for regional and local level planning. The Planning Act also established twelve regional commissions, public agencies that support local governments with comprehensive planning to ensure a coordinated approach to land use, environmental, transportation, and historic preservation planning in the state. Each municipality and county in the state is automatically a member of their regional commission. Each regional commission’s council includes one elected official from each municipality and county, as well as three residents appointed by the governor. These commissions can cooperate directly with local planning and development agencies and provide technical assistance to them.
Providing policy guidance and technical assistance:
- The State of Massachusetts, with the help of statewide organizations, provides technical assistance to support affordable housing development. The Massachusetts Housing Partnership’s TA program helps localities assess housing needs, update zoning regulations, and navigate proposed developments under Massachusetts’ Chapter 40B policy (see more on the 40B process below). The Partnership’s Guidebook for Local Housing Partnerships helps orient new housing partnership members to the terms and techniques of affordable housing development. The Partnership and the Citizens Housing and Planning Association also developed a Housing Toolbox for Massachusetts Communities, which provides background and guidance to local committees, planning officials, and developers on navigating state programs and local zoning to develop affordable housing. The toolbox provides resources to help localities identify the nature of local housing needs and ideas for housing policies that local governments can adopt.
Funding the development of local housing policies:
- Additionally, the State of Massachusetts enacted the Community Preservation Act, which allows localities to create a local Community Preservation Fund via a local ballot referendum. The preservation fund can be used for open space, historic preservation, and affordable housing through a surcharge on property taxes. The local fund can also receive matching funds from a state fund that raises money using a tax on transactions. Localities can also issue bonds based on future revenue to the preservation fund. The state has developed guidance materials to help communities implement the program and offers individualized technical assistance to help localities use the funds generated for housing.
State housing policies and programs
State-mandated zoning changes to facilitate the construction of higher-density housing:
- In 2019, Oregon’s legislature passed HB 2001, which laid the groundwork for developing middle housing in the state. The law stipulated that by June 2021, cities with a population between 10,000 and 25,000 had to allow the building of duplexes in areas zoned for single-family dwellings. Additionally, by June 2022, cities with a population greater than 25,000 were required to allow developers to build duplexes, triplexes, fourplexes, cottage clusters, and townhouses in residential areas. The law provided $3.5 million for technical assistance to localities to 1) help with the development of regulations to allow housing specified in the bill, and 2) help with the development of plans to improve water, sewer, storm drainage, and transportation services in areas where housing specified in the bill would not be feasible due to service constraints.
- Florida state law authorizes all localities with a shortage of affordable rental housing to adopt an ordinance that permits ADUs in all areas zoned for single-family residential use. Localities that adopt such an ordinance must require an affidavit from applicants attesting that the units will be rented at an affordable rate.
- Washington state’s House Bill 1110, which passed in 2023, requires cities zoning ordinances to allow for more ‘middle housing’ by either creating ordinances that comply with the law within a specified timeframe, or adopt state-provided model ordinances that supersede, preempt, and invalidate local regulations until the cities take the necessary actions to comply with the law. Additional information on these “middle housing” ordinances can be found here.
Streamlining the development review process:
- California Assembly Bill 2162 (2018) encourages the production of supportive housing statewide by mandating streamlined and expedited approval for such projects and the elimination of minimum parking requirements for developments located within half a mile of public transit.
“Fair share” and affordable housing distribution policies:
- In New Jersey, the Mt. Laurel decisions established the obligation of localities to provide for their fair share of their affordable housing needs. In its Fair Housing Act, adopted in 1985 and amended in 2008, New Jersey required every municipality to provide some amount of housing affordable to very low-income people, defined in the Act as below 30 percent of the area median income (AMI). The law also abolished Regional Contribution Agreements that wealthier New Jersey towns had used to transfer their affordable housing obligations to less affluent towns. For a full timeline of these policies, see this resource from the Fair Share Housing Center.
- Massachusetts’ Chapter 40B gives affordable housing developers the ability to override local zoning codes in localities in which less than 10 percent of the housing is affordable. Connecticut and New Hampshire have somewhat similar provisions of developer remedies to enforce their fair share standards.
- California’s Housing Accountability Act and Housing Element Law: The Housing Element law dates back to the late 1960s. Since 1980, it has required California cities and counties to periodically update and adopt a state-approved plan (housing element) for their fair share of regionally needed housing, also known as the Regional Housing Needs Allocation (RHNA). Most localities complete this process every eight years.
- California has enforcement mechanisms to ensure compliance with the Housing Element law, such as the “builder’s remedy” granted through the Housing Accountability Act, established in 1990 but strengthened through recent legislation. This policy allows developers of affordable housing projects to bypass local zoning codes that are out of compliance with the Housing Element Law, as long as at least 20 percent of the units are affordable for low-income individuals or if the projects are completely aimed at moderate-income households.
Related resources
- A Primer on California’s “Builder’s Remedy” for Housing-Element Noncompliance. Authored by Professor Christopher Elmendorf and published by the Ralph and Goldy Lewis Center for Regional Policy Studies, this document explains how an unclear legal framework has discouraged developers from using “builder’s remedy,” prompting calls for legislative clarification or official guidance.
- Build the Middle Playbook. This guide from the Casita Coalition provides guidance for housing advocates pushing reforms to allow more “missing middle” housing.
- Cities 101— Delegation of Power. Brief on the state’s delegation of power to local governments from the National League of Cities.
- Critical Land Use and Housing Issues for New York State in 2023. This is a series of briefs published by the Furman Center examining recent trends in land use and housing policy from states nationwide.
- Incentivizing Housing Production: State Laws from Across the Country to Encourage or Require Municipal Action. An analysis comparing state housing and land use law by Manji et al.; published by the Terner Center for Housing Innovation at UC Berkeley.
- ‘I Would, If Only I Could’ How Cities Can Use California’s Housing Element Law to Overcome Neighborhood Resistance to New Housing. Co-authored by Christopher S. Elmendorf, Eric Biber, Paavo Monkkonen & Moira O’Neill and published in the Willamette Law Review, this essay provides an overview of California’s housing element planning process, helping local officials understand how it can create opportunities to overcome barriers in land use and zoning codes for new and affordable housing projects.
- State Law, Local Interpretation: How Cities Are Implementing Senate Bill 9. A policy brief from the Terner Center analyzing how local jurisdictions have implemented zoning and planning changes from the state law, enabling homeowners to split their single-family residential lots to create up to four units.
- State Mandates, Housing Elements, and Low-income Housing Production. Article by Darrel Ramsey-Musolf published in the Journal of Planning Literature reviewing research on state housing elements.
- What You Need to Know About Preemption. This is an explainer from the National League of Cities.
- 2020 Local Tools to Address Housing Affordability: A State-by-State Analysis. This National League of Cities report provides a state-by-state analysis of several housing policy issues.