Copy of state capitol is shown to illustrate the role states can play in local housing policy

State Action to Promote Local Housing Development

As cities across the country struggle to meet the demand for affordable housing, an increasing number of states are taking action to encourage, incentivize, and require localities to expand housing supply. A series of policy briefs from the NYU Furman Center and a report from The Terner Center for Housing Innovation at UC Berkeley describe key issues for states to consider and highlight legislative efforts across the country. Here are a few of our takeaways from these resources:

  1. State policies can address overly restrictive local zoning to ensure that every jurisdiction is contributing to the state’s housing supply.

Despite the growing need for more affordable housing options, restrictive local zoning continues to prevent housing development, particularly in highly desired communities. NYU Furman Center analysis makes the case against restrictive land use, describing how local land use debates typically focus narrowly on specific projects and face opposition from homeowners who benefit from higher home prices and limited supply. Local policymakers may also have intense political incentives to avoid new development. This hyper-local context often puts cities at odds with statewide housing goals. In order to help localities overcome entrenched local politics, community resistance, and inaction, states may need to intervene more directly through legislation. 

  1. State strategies should encourage local governments to allow new and diverse forms of housing.

While every state’s context varies, allowing for housing types beyond single-family homes is critical for expanding housing supply and affordability. While calling for more and different types of housing in New York State, NYU Furman Center analysis promotes state land use strategies that foster “gentle density,” which includes smaller-scale development such as townhomes, two- to four-family homes, and condominiums. These housing types can help increase affordable housing while maintaining communities’ physical scale and neighborhood characteristics. 

Several states have passed legislation in recent years that requires localities to allow greater density and new forms of housing. For example, California, Oregon, and Washington have passed laws to allow accessory dwelling units (ADUs). California also moved to allow for duplexes in areas previously zoned only for single-family homes. Similarly, Oregon now requires certain localities to permit multifamily housing as well as some by-right development. Maine also passed legislation requiring municipalities to allow affordable multifamily housing developments of greater density than previously permitted by local zoning codes. These examples offer potential policy options for other states to consider. 

  1. State policymakers should consider multiple policy levers to motivate local housing production.

Drawing on an analysis of 144 recent pro-housing state laws, The Terner Center for Housing Innovation at UC Berkeley identified four policy levers that characterize the types of policies that states typically use to motivate local housing production. They include:

  • Requiring localities to plan for the housing needs of their respective regions
  • Implementing state standards for local land use and planning regulations
  • Providing “carrots” to incentivize a particular production goal, and/or
  • Imposing “sticks” to penalize jurisdictions for failing to carry out their housing obligations

Requiring localities to plan for housing needs and implement state standards are the most common. State legislation typically integrates more than one policy lever and improves upon existing laws rather than innovating entirely new policies. 

  1. State action to bolster housing supply has the potential to promote greater fairness, equity, and access to opportunity. 

NYU Furman Center analysis finds that inadequate housing supply is not only associated with less affordable housing, it is also linked to racial inequalities, segregation, and limited housing choices for diverse households. Restrictive zoning policies can perpetuate residential segregation and limit access to opportunity while land use approaches that promote density and housing production are associated with decreases in racial segregation. To advance greater equity in housing, states may need to pursue policy approaches that help dismantle local exclusionary zoning laws and examine disparate impacts of housing policies.  

  1. Local governments need support to implement new state policies.

Implementation of new state laws is often complex and requires significant retooling by local governments. Localities need appropriate staffing and resources to take on state policy changes such as adopting rezonings, conducting local housing needs assessments, or complying with other new state requirements. The Furman Center notes that a 2020 survey of California city and county staffers found that after ADUs were allowed statewide, staff were overwhelmed with implementation. Staff had limited capacity to interpret and implement the new legislation, incorporate changes into the jurisdiction’s local codes, and communicate changes to the public. For state policies to be successful, policymakers must consider the impact of policies on localities and dedicate financial and technical support to help local governments. 


State and local governments must work collaboratively to address the growing affordable housing shortage. Together, they can consider a variety of policy levers and implementation strategies with consideration of their unique economic, geographic, and political conditions.  As more states take action to motivate local housing production, additional research is needed to understand the effectiveness of interventions. 

Additional Resources from Local Housing Solutions

State funding sources. This page describes the role of states in establishing and administering funding for affordable housing.

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