What to Expect in State Legislatures on Zoning Reform in 2023

In preparation for the upcoming legislative session, leaders from 29 APA chapters across the country met in November to discuss policy and develop strategies to advance critical issues in 2023. Throughout the discussion, chapters expressed the most pressing topics in their states and expectations for state legislatures.

With a rising share of Americans saying that affordable housing is a major problem in their communities, state legislatures in 2022 focused on increasing affordable housing within their respective regions. Housing measures that states have passed in the last year target housing costs and mandate allowing accessory dwelling units (ADUs), while others enable or require changes to local zoning.

States Lead Zoning Reform Efforts Nationwide

Zoning reform has taken shape in state legislatures in the form of efforts aimed at overhauling outdated local codes and encouraging greater housing options. States have aimed at codes that set parking minimums and restrict multifamily housing options in certain neighborhoods.

In the last two years, states across the country have set the precedent for state preemption of zoning reform with major legislative overhauls. States like California, Connecticut, Oregon, Washington, Utah, Massachusetts, and Maine have taken leadership roles in the expansion of missing middle housing.

On January 1, 2022, SB 9 streamlined the process for homeowners to subdivide existing lots or convert homes into a maximum of four-unit duplexes in California. Connecticut passed a milestone bill to undo exclusionary zoning regulations with HB 6107 in 2021. The law legalized accessory dwelling units, addressed outdated parking mandates, and required training for planning and zoning commissioners.

States like California, Connecticut, and Washington are setting the trend of states evolving their state statutory framework for housing over multiple sessions. In 2023, these state legislatures will likely introduce targeted bills that build on the zoning reform standards that were set in previous sessions with preemption bills.

Indiana and Montana set up task forces to find solutions for the lack of affordable housing within their states. In 2023, legislators in both states are expected to use the findings of the task force to introduce bills that implement zoning solutions. In both states, planners were not included in the deliberations. Instead, the task forces were largely made up of lawmakers and stakeholders from the housing sector, including builders, realtors, and tenant advocates. For states that are now experiencing massive amounts of new residents after the pandemic, there are likely to be more governors that will allocate funds towards zoning reform research and create similar task forces.

State Preemption Trend Continues in 2023

Ultimately, the trend of state preemption to implement zoning reform is expected to continue in 2023. However, zoning reform is not just a state issue, the U.S. is experiencing a housing shortage in every American city making it a pressing national issue. According to the Up For Growth Housing Underproduction Report, in the last four years, the housing affordability problem has transformed from a coastal issue into a national crisis.

In December 2022, Congress passed a $1.7 trillion spending package that included $85 million for grants to support and incentivize housing planning while tackling exclusionary zoning and other regulatory barriers. This provides the budget for states and cities that seek to implement zoning reform and increase the availability of affordable housing within their regions.

Here is a preview of some key states where zoning reform legislation is likely to be a high-profile part of the legislative agenda in 2023.

Washington

Governor Inslee ended 2022 with three focus areas around increasing housing availability for the next session. During a press conference in November, Inslee expressed the need for increased density near transit, especially affordably priced units, speeding up development by establishing a new pilot permitting program and digital platforms as well as helping lower-income first-time home buyers by expanding a tax incentive program. As the state grapples with jumps in housing prices and homelessness, the governor has made the correlation between housing affordability, lack of availability, and homelessness. Bills on all these topics have already been introduced in early 2023.

In 2021, Inslee backed a bill that would replace single-family-only zoning with fourplex zoning in major cities in the state but the bill never came to a floor vote. For this year, Inslee has signaled a different approach with a focus on high-density multifamily zoning near transit stations. Another consideration from the governor is for cities to meet targets for the percentage of land that is available for more dense housing. Essentially, transit-rich cities would have to decrease the percentage of land reserved for single-family homes.

With the introduction of HB 1110, which aims to lift local zoning laws that prohibit multi-dwelling homes and open the doors to middle housing, Washington is already on the right track for 2023. The bill would legalize fourplexes on all residential lots in most cities as well as sixplexes near transit. If the bill were to pass it would be a monumental win for the governor and affordable housing in the state.

New York

In 2023, New York will join states like California, Utah, and Oregon in introducing policies that incentivize cities to reform local zoning laws that create barriers to building new housing. In her State of the State address, Governor Hochul announced a statewide strategy to address the state's housing crisis with the goal of building 800,000 new homes in the next decade.

The New York Housing Compact is a multi-pronged strategy that includes local participation requirements and incentives while also requiring municipalities with rail stations to locally rezone for higher-density development. The strategy requires all local governments to commit to new home creation targets on a three-year cycle. Localities will have the freedom to determine how they will meet those targets and affordable units will be assigned extra weight in calculating progress.

The New York Housing Compact will provide a $250 million Infrastructure Fund and a $20 million Planning Fund to support housing production. There is a three-year safe harbor period for cities that do not meet growth targets. After three years, proposed housing developments can utilize a fast-track housing approval process through a state housing approval board if the permit has been denied at the local level. Hochul seeks to incentivize new housing and the rehabilitation of old housing with new property exemptions. These exemptions are to encourage mixed-income housing developments near transit and commercial building conversions into residences. This also includes property tax exemptions for homeowners who build accessory dwelling units and certain renovations in New York City. Another proposal by Hochul within this strategy is to give the City of New York the authority to provide amnesty by local law for existing basement units that meet certain criteria.

Connecticut

Housing and zoning are major issues in Connecticut this session, according to Governor Lamont. In his State of the State address, Lamont mentioned that the lack of affordable housing for the state's workforce is preventing economic housing. He also addressed his willingness to work with local governments on a solution to increase housing production at a lower cost. The state legislature will likely introduce bills that target eviction protections, rent caps, homelessness, and land-use reform. More specifically, policy advocates have called for increased density near transit stations, and the newly elected co-chair of the Planning Development Committee Rep. Eleni Kavros DeGraw (D-Avon) has expressed enthusiasm about the idea. When asked about "fair share" policies, which would have towns plan and zone for an allotted number of new affordable units, the representative declined to comment.

Montana

Governor Gianforte created a housing task force last summer charged with providing recommendations to make housing more affordable for residents. The task force ultimately recommended a reduction of barriers in local permitting codes and technical assistance for local governments to study infill developments.

In 2023, Gianforte will focus on implementing the housing task force's recommendations and getting them implemented into law. He announced on January 3, 2022, that the state has allotted $200 million to expand water and sewer infrastructure and help communities add more affordable housing.

Florida

The Florida Legislature was active in 2022 on zoning, land use, and affordable housing issues. State leaders pushed back against embracing reform. Still, the City of Gainesville became the first in the state to vote to eliminate single-family-only zoning; the city later ran into objections from Florida's Department of Economic Opportunity.

Before the end of 2022, Governor Ron DeSantis awarded more than $35 million to 48 Florida communities to strengthen economic development, commercial and neighborhood revitalization, housing rehabilitation, and infrastructure improvements in the state.

For 2023, Florida has pre-filed Senate Bill 88 that would create a task force on workforce housing for teachers, which also encourages local governments to assist and cooperate with the task force. Bills like these are expected to become more commonplace as Florida faces a short supply of housing and a drastic increase in housing prices.

Virginia

Governor Youngkin unveiled his "Make Virginia Home" Plan in late 2022, which is designed to address housing supply and streamline and improve permitting processes. A brief overview of the plan outlines his goals of establishing zoning and land use review processes for Virginia's localities. Other key goals outlined in Youngkin's plan include improving and streamlining environmental permitting processes and creating public/private partnerships with site selectors early on to include workforce housing in the site development.

Youngkin's plan recognizes that local permitting rules, zoning laws, and land use regulations are making housing more expensive in the state and the use of state funds can incentivize local governments to make some of the necessary reforms on their own.

Governors Prioritize Zoning Reform

The impact of election results is driving the potential for reform in several states, which makes a push for zoning reform more likely in those regions. Michigan, Pennsylvania, and Minnesota now have strong support from the governor's office, the senate, and the House to take action on missing middle housing in their states.

Taken together, zoning reform continues to remain a top priority for many governors, and we expect the issue will likely dominate state legislatures this year.

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