YIMBY Reforms Win Big In State Legislatures in 2025
In 2025, momentum behind state-level supply-side housing reforms accelerated almost everywhere.
Happy Tuesday, and welcome to another edition of Rent Free.
Last week, California lawmakers closed out the 2025 legislative session with the passage of S.B. 79—a bill that overrides local zoning to allow apartment buildings near transit stops.
California has one of the longest-running legislative sessions, so Golden State lawmakers hanging up their spurs for the year means that state-level legislative activity is done for the year almost everywhere.
This week's newsletter, therefore, will attempt to summarize this past year of state reforms and what they say about where the movement for more liberal land-use laws currently stands.
Mounting Activity
In July, George Mason University's Mercatus Center published a comprehensive count of housing supply bills introduced in state legislatures over the past year. The most remarkable thing about that report is just how many bills are being proposed.
Rent Free Newsletter by Christian Britschgi. Get more of Christian's urban regulation, development, and zoning coverage.
A decade ago, when the "yes in my backyard" (YIMBY) movement was comprised of a handful of gadfly San Francisco Bay Area activists and libertarian bloggers, housing supply reform was a rather low-salience issue.
Politicians didn't talk about housing all that much, and when they did, they generally focused on the need to stabilize home values in the wake of the Great Recession. State legislatures were largely backwaters on the issue.
Today, in contrast, housing supply is one of the top policy issues in the country, and state legislatures are largely where the action is.
The Mercatus Center report counts 104 bills introduced in the first half of 2025, an odd-numbered year when all state legislatures are in session. That compares to just 30 bills introduced in the first half of 2023.
Many, if not most, of these bills did not pass. But the flurry of legislative activity shows at a minimum that advocates for state-level liberalization of land-use laws are on the offensive everywhere.
As the Mercatus report notes, this includes Midwestern and Southern states that are still relatively affordable and heretofore were absent from housing policy discussions. That's particularly encouraging. Lawmakers are eager to get more pro-supply regulations on the books before their states experience a housing cost crunch.
Continual High Achievers
In any policy area, one typically expects an ebb and flow of activity. A legislative session in which a lot of bills are passed is followed by a relatively sleepy session in which policymakers take stock of recent reforms or shift their focus to other issues.
That's not been the case with Washington and Montana, where supply-side reforms continue to gain momentum from year to year.
Montana
In 2023, Montana lawmakers passed the so-called Montana Miracle—a package of bills that allowed duplexes and accessory dwelling units in single-family zones, apartments in commercial areas, and limits on the ability of the public to challenge the approval of individual housing projects.
In 2025, the Legislature followed up on these reforms with bills that restricted localities from imposing parking minimums and height limits on new central city apartment buildings. Lawmakers also limited the ability of localities to impose impact fees on new housing.
These straightforward, simple reforms now make new multifamily housing in central cities both legal and financially feasible.
Washington
Meanwhile, Washington's housing reformers have gone from proactive to aggressive.
In 2023, the state passed a robust "missing middle" bill that legalized at least two units of housing on residential land, and between four and six units in larger cities and in areas near transit stops.
State lawmakers also legalized accessory dwelling units across the state and exempted housing projects within urban growth boundaries from the need to complete lengthy environmental reviews.
While last year was relatively quiet on the housing reform front, 2025 proved to be another blockbuster year.
State lawmakers passed a transit-oriented development bill that will allow three-to-five-story apartment buildings near transit stops. The bill does include "inclusionary zoning" requirements mandating that between 10 percent and 20 percent of these new apartments be offered at below-market rates to lower-income residents.
By requiring steeply discounted rents, affordability mandates reduce the amount of housing that is financially feasible to build. Washington's new law does attempt to offset those costs by granting developers property tax abatements.
The state passed another reform limiting minimum parking requirements in new construction (and eliminating them entirely for smaller units). That will also do a lot to make new apartments financially feasible to build.
It's notable that Washington had considered a transit-oriented development bill in 2023 that ultimately failed. That a similar policy passed this year is evidence that housing reformers in the state are proving increasingly adept at getting their policies over the finish line.
It is worth noting that Washington also passed a statewide rent control policy, which one should expect will limit the supply of rental housing.
Close but No Cigar
In most states considering pro-supply housing reform, it's governors who are normally championing that reform in the face of opposition from their legislatures. That's not the case everywhere. In Arizona and Connecticut, pro-housing legislatures and anti-reform governors have produced some frustratingly close policy defeats.
Arizona
For the second year in a row now, starter home legislation failed to make it over the finish line in Arizona.
The state's S.B. 1229, which would have limited localities' ability to impose minimum lot size restrictions on homes in new subdivisions and banned aesthetic design mandates, managed to pass out of the state Senate as well as two House committees with bipartisan support.
But the bill was never brought up for a floor vote in the House. The bill's supporters said that persistent opposition from Democratic Gov. Katie Hobbs' office and the League of Arizona Cities and Towns was enough to kill that bill.
That result is effectively a repeat of last year, when a starter home bill was passed by the Legislature but vetoed by Hobbs.
This year's starter home legislation addressed the governor's stated concerns in her 2024 veto message by more explicitly incorporating fire safety standards and exempting areas around military bases from the bill.
But that was still not enough to bring Hobbs around to supporting the bill.
The Arizona Legislature did manage to pass other reforms allowing for third-party permitting of single-family homes, more residential development in commercial zones, and an expansion of state accessory dwelling unit legalization to unincorporated areas.
Arizona reformers can also take solace in the fact that their starter home bill was essentially cut and pasted into Texas law this year (more on that below). That's evidence that YIMBY ideas can cross-pollinate from one state to another.
Connecticut
Likewise, in Connecticut, the Legislature passed a comprehensive housing supply package that would have preempted local minimum parking requirements, allowed "middle housing" developments in more areas, and required localities to update their zoning regulations to meet state-set growth targets.
Not everything in that 160-page housing package was deregulatory. But a lot of it was.
So much so that Democratic Gov. Ned Lamont vetoed the entire thing out of a desire to preserve local control over housing policy.
Support and opposition to state-led housing supply reforms typically cut across party lines, meaning that bipartisan support is necessary to get bills passed.
In Connecticut, partisan dynamics worked to undermine the state's housing package. Democrats were split on the bill, and Republicans were in unified opposition.
That made the governor, as well as many lawmakers, squeamish about doing anything too aggressive on housing. As the Connecticut Mirror reported last week, some Democratic lawmakers who'd opposed the housing package privately urged the governor to sign the bill. Profiles in courage, indeed.
Per the Mirror's reporting, Lamont wasn't willing to get behind a housing package that had such narrow public support as he gears up for another gubernatorial run
Lamont's veto of Connecticut's housing package is yet another example of the perils of putting all of one's housing reform eggs in one basket. These housing omnibus packages typically fare poorly in legislatures. Where lawmakers introduce a series of one-off reform bills, it's more likely that at least something passes.
Texas Begins With a Bang
Perhaps the most interesting state in the housing supply space right now is Texas.
For decades, the Lone Star State had little to worry about when it came to housing costs. Abundant, cheap, buildable land on city peripheries and a pro-growth regulatory framework for greenfield development (counties in Texas can't zone, and the state lacks environmental review laws that often trip up major new subdivisions) made housing supply relatively elastic and kept prices down.
For decades now, the state has also preempted other forms of local regulation—namely, rent control and "inclusionary zoning"—that limit new supply.
Nevertheless, most Texas cities (save for famously unzoned Houston) still had zoning regulations and permitting processes that resembled the rest of the country.
As persistent waves of in-migration have put upward pressure on rents and home prices in the once-low-cost state, lawmakers this session moved proactively to lower regulatory burdens where they do exist.
The most notable example of this was S.B. 840, which allows developers to build residential projects in commercially zoned areas within large cities in large counties.
Additionally, the state passed S.B. 15, a "starter home" reform that limits the minimum lot size and density limits that larger municipalities can impose on new single-family subdivisions of five acres or more.
Together, the two bills represent a significant state-level liberalization of two types of housing that are often blocked by local zoning regulations—smaller single-family homes and midrise apartments.
The state also passed process reforms that effectively end the ability of slow-growth activists to block city-initiated rezoning efforts—as has happened in Austin in recent years.
Because Texas is relatively new to the game of state-level zoning preemption, there's reason to be cautious about how well these reforms will work in practice.
Localities can often be quite creative at nullifying state-level zoning reforms. Witness some Texas cities imposing density minimums and luxury amenity mandates on new apartments legalized by S.B. 840.
Still, while Texas might be new to the zoning preemption game, the Republican-dominated Legislature does have a long history of preempting blue cities' municipal regulations. Odds are that lawmakers will not tolerate the most egregious efforts by cities to block state reforms.
At a minimum, it's encouraging that in the first legislative session in which the state successfully passed zoning reforms, the reforms were this meaningful.
New York: Persistent Problem Child
On the more pessimistic side of the ledger, it's notable that in some states with the highest housing costs and the highest regulatory burdens, few significant reforms were passed or even considered.
The most prominent example of this is New York.
Back in 2023, Democratic Gov. Kathy Hochul proposed a sweeping "housing compact" that would have given cities a mandate to plan for more housing and allow developers to get projects approved directly by the state when trying to build in cities that were not meeting their state mandates.
That plan crashed and burned in the Legislature thanks to strong bipartisan opposition. Since then, the Empire State has considered few housing supply bills.
This year, the Legislature considered two relatively modest reforms—one to provide zoning relief to faith organizations building housing and another to streamline environmental reviews for certain housing developments. Neither passed.
At the local level, New York City has advanced zoning reforms through the "City of Yes" initiative. That goes some way toward making up for inaction at the state level.
Nevertheless, it's not a good sign when one of the states with the most pressing need for zoning liberalization is also the most squeamish about passing it.
Weird Times
In a policy brief for the Mercatus Center, Jenny Schuetz, a housing policy researcher for Arnold Ventures, notes that housing policy changes are "more random than you think."
Governors in some states are aggressively pro-reform. Others are arch-opponents of doing anything housing-related at the state level.
Policies that pass easily in one state fail miserably in another. Partisan attitudes toward state-level zoning reform vary wildly from state to state.
The implication is that the cause of land-use liberalization is more art than science. Successful policies, tactics, and messaging in one state don't automatically transfer to another.
The pessimistic takeaway is that total YIMBY victory is not going to sweep the nation all at once.
More optimistically, there's a lot to be gained from proposing reforms year after year or testing out new types of reforms when a past version failed.
Given how restrictive American zoning laws and growth controls are, there's an endless number of policies that can have a positive impact on supply. With so many states taking up the issue, odds are that something significant will pass somewhere each legislative session.
That's how policymaking is bound to shake out in a large federated republic such as ours. Increasingly, federalism is yielding wins for pro–housing supply reforms.
