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The role of states in shaping local housing strategies


While a full review of state housing policy is beyond the scope of Local Housing Solutions, there are many aspects of state housing policy that can enable, inhibit, and/or generally influence the development of local housing strategies. State actions can be especially important for smaller cities and counties with smaller budgets and administrative capacity to develop, adopt, and implement comprehensive housing strategies on their own. This brief discusses four such areas: 1) state authorization or preemption of local housing policies, 2) state requirements and support for local housing planning, 3) state housing programs and policies, and 4) state administration of federal housing funds.

The role of states in shaping local housing strategies

While localities should be aware of the role states play in local housing policy, localities also can play an important role in shaping state policies and programs. Localities and local stakeholders should be aware of the state legislative and regulatory environment so they can be well-informed and successfully advocate for their needs.

State authorization or preemption of local housing policies

For local governments to adopt and implement local housing policies, they must have the authority to do so. In some states, localities are presumed to have this authority, unless the state affirmatively takes it away, while in other states, localities have only those powers explicitly delegated to them. Regardless of the policy regime, it is critically important to the success of local housing strategies that local governments have the authority under state law to adopt a robust set of local housing policy tools.

Dillon’s Rule and Home Rule

While there is 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.

In states that use Dillon’s Rule, a municipality can only exercise the powers explicitly granted to them by the state, which can limit municipalities’ ability to enact certain policies. To ensure that local governments are able to 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 policy categories, which means that local government can act freely in these areas unless the state has explicitly prohibited certain policies. To expand local housing policy decision-making, Home Rule states may need to repeal or modify state law provisions limiting local power. 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.

Preemption flash points

There are several specific local housing policy tools that some Home Rule states have acted to restrict 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 zoningrent controllocal housing trust funds, and source of income laws. Another common issue is a limit in state law on the duration of covenants designed to ensure long-term affordability. Some states even place limits on the ability of localities to issue general obligation bonds or raise taxes to generate funding for affordable housing.

In some cases, these limitations are based on state regulations, statutes, or the state constitution (i.e. the general absence of state authorization). In other cases, the limitations come from state court interpretations of state legislation or regulations. For example, California and Colorado courts have construed state statutes related to rent control as prohibiting the application of inclusionary zoning to rental housing developments. To the extent such court opinions are based on statutory interpretation, rather than constitutional issues, the court decisions can generally be overturned by state legislation. This ability is illustrated by legislation adopted by the state of California in 2017 (AB 1505), restoring the ability of California cities to apply inclusionary zoning policies to rental developments.

The role of local advocacy in shaping state housing policy

Localities within a state may find it useful to build or leverage alliances with one another to advocate for state authorization (or the repeal of state prohibition) of these and other policy tools to enhance localities’ ability to adopt a robust set of housing policy tools to support their strategies. For more information on how to build coalitions to advocate for local power and support housing initiatives, see this guide from the National League of Cities and Local Housing Solutions’ discussion on building housing coalitions.

Overcoming state legal barriers

While modifying state law represents the optimal solution in most instances in which state law constrains local housing policy decision-making, some localities have been able to find alternative ways to achieve the same or similar objectives. For example, in states where prohibitions against local rent regulation have limited the ability to apply mandatory inclusionary zoning to rental developments, some cities have:

  • Charged a housing impact fee for new market-rate development, and then provided developers with the option to build affordable housing in lieu of paying the fee (essentially the reverse of the options offered in a typical inclusionary zoning policy),
  • Adopted voluntary inclusionary housing policies that allow projects that choose to include affordable units to build a greater number of units than would otherwise be allowed or receive other benefits,
  • Incorporated affordability into a review of proposed housing projects that seek a zoning variance or special use permit,
  • Expedited the development review process or permitting of projects with affordable units, or
  • Established a fair rent commission, which can receive and investigate complaints, issue subpoenas, hold hearings, and act upon complaints regarding rental charges on housing accommodations.

State support of local housing planning

Beyond ensuring that localities are authorized to adopt a robust toolkit of housing policies, states can promote the development of local housing strategies in several ways: 1) they can require localities to develop a housing strategy or plan, 2) they can promote the development of a regional housing plan, 3) they can provide funding for localities to develop a local housing strategy or plan, and 4) they can provide policy guidance or technical assistance for the development of local housing strategies or plans. However, localities should be aware that state actions may unintentionally limit the size and scope of local housing planning and policymaking (see “Considerations”).

Requiring the development of local housing strategies or plans

Beyond providing flexibility to localities to adopt housing policies, 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 they plan to meet the state housing goals. (See “Considerations” below for a brief discussion of the potential side-effects of some of these housing element requirements.”)

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. Requirements for what these housing elements must include vary by state.

Promoting the development of regional housing strategies

States may also encourage or require localities to develop a regional housing strategy. A regional housing strategy coordinates the housing-related policies of several localities to improve the impact and accessibility of housing policies within a region. A regional strategy can be useful in housing markets where multiple local governments are able to pool resources to improve housing outcomes for residents in the region.

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. See “States’ role in funding affordable housing” below for more information.

Providing policy guidance and technical assistance

States can also offer policy guidance and technical assistance (TA) to localities to assist them in the adoption of effective local housing approaches. States may also be able to develop and/or share model policies that localities could adopt if they wished to support affordable housing.


Localities should consider going beyond any state focus on land use policy to develop more comprehensive local housing strategies. In many states, the housing elements required by the state’s comprehensive planning statute include a strong focus on zoning and development review issues and may not include the broad range of policies reflected in the Local Housing Solutions policy framework. Furthermore, housing elements are often developed by planning departments and may or may not reflect the product of widespread interagency collaboration. By contrast, Local Housing Solutions encourages the development of local housing strategies that reflect  across multiple local agencies whose policies affect the affordability, quality, or stability of housing. Depending on the state, this may require a change in the legal requirements applicable to state housing elements.

State housing policies and programs

In addition to helping localities develop more effective local housing strategies, states can develop their own housing programs that complement local housing policymaking. This can include creating policies that encourage all localities to provide a fair share of regional/statewide affordable housing needs. The section below provides examples of some of these policies to promote an equitable distribution of affordable housing across the state.

“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.

Another approach to promoting the distribution of affordable housing throughout the state provides affordable housing developers with the ability to override local zoning codes to build a qualifying housing development in localities.

Streamlining development review processes

States can establish streamlined development review processes for projects that meet certain criteria, including priority permit processing, or exemptions from discretionary project approvals or other requirements.

State-mandated zoning changes to facilitate the construction of higher-density housing

States can require localities to review their zoning ordinances to identify and remove unnecessary obstacles to the development of multifamily housing. In addition to explicit bans on multifamily developments in certain areas, obstacles can include requirements for large lot sizes or setback requirements and other land use regulations that make it difficult to build multifamily structures on otherwise developable sites. States can also encourage or require that localities allow for the development of higher-density housing stock in their zoning codes. Many localities have adopted zoning codes that support the development of single-family housing but do not allow for the development of so-called “middle housing” in a large portion of their residential areas. (Note: “Middle housing” refers to housing types such as duplexes, triplexes, cottage clusters, and townhouses that are in the middle of the housing density spectrum between detached single-family homes and mid/high-rise apartment buildings.) Finally, states can consider adopting statewide legislation authorizing accessory dwelling units (ADUs). Facilitating the development of ADUs through state legislation can help to expand access to resource-rich areas for lower-income households and create a source of income for existing homeowners.

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 have the power to establish their own funding streams, as well as administer the funds for several federal housing programs. The role of state funding sources is particularly important in smaller cities and counties that do not receive direct federal program funding. Click here to learn more about the role states play in establishing and administering funding for affordable housing.


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 to a comprehensive plan, but that each plan includes a housing element that examines 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 the analysis 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. Each locality is required to prepare a comprehensive plan with mandatory planning elements. Georgia requires communities that get a direct CDBG allocation (entitlement communities) to include a housing element; for other localities in the state, the housing element is optional but encouraged. Furthermore, Georgia requires that each plan contain a “Community Work Program,” which is a five-year implementation plan outlining locality activities, timelines, responsible entities, and costs. The work program identifies the actions needed to achieve the vision outlined in the comprehensive plan. The work program must be updated every five years.
  • Providing policy guidance and technical assistance: The State of Massachusetts, with the help of state-wide 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, along with 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 how to navigate 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 and can be adopted via a local referendum. The preservation fund can be used for open space, historic preservation, and affordable housing through a surcharge on property taxes. To help communities implement the program, the state has developed guidance materials and offers individualized technical assistance to help localities use the funds generated for housing.

State housing policies and programs

  • “Fair Share” and affordable housing distribution policies
    • New Jersey, the Mt. Laurel decisions established the obligation of localities to provide for their fair share of the affordable housing need. 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 had been used by wealthier New Jersey towns to transfer their affordable housing obligations to poorer towns.
    • 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.
  • Streamlining 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.
  • State-mandated zoning changes to facilitate the construction of higher-density housing: To encourage the development of more middle housing, Oregon’s legislature passed HB 2001 in 2019 that laid the groundwork for the development of middle housing in the state. The law stipulates that by June 2021, cities with a population between 10,000 and 25,000 must allow the building of duplexes in areas zoned for single-family dwellings, and by June 2022 cities with a population greater than 25,000 must allow developers to build duplexes, triplexes, fourplexes, cottage clusters, and townhouses in residential areas. Additionally, the law provides $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.

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