When the Dam Broke: The Reforms Reshaping Housing in America in 2025

“Housing is absolutely essential to human flourishing. Without stable shelter, it all falls apart.” — Matthew Desmond 

Across the United States, 2025 marked a clear break from decades of housing policy inertia. Faced with worsening affordability, labor shortages, and mounting political pressure, states and cities moved beyond incremental tweaks and embraced structural reforms aimed at increasing housing supply. From sweeping zoning changes and accessory dwelling unit (ADU) mandates to parking reform and long-overdue “single-stair” building code updates, the rules governing where and how housing can be built are shifting in fundamental ways.

What stands out in 2025 is not just the number of reforms, but their ambition. States are increasingly willing to confront the regulatory barriers that have quietly constrained housing production for decades. This post highlights several of the most consequential statewide and local housing reforms enacted this year, with a closer look at California, Montana, and Texas, three states that, despite very different political contexts, emerged as leaders in rethinking housing policy and moving quickly to enact a suite of reforms aimed at spurring needed production across their states.

California

CEQA Reform & Infill Exemptions (AB 130 & SB 131)

For decades, the California Environmental Quality Act (CEQA) has been used in litigation to delay or block housing. The process, while well intentioned, was adding 6-12 months of costly delays in some cases totaling millions of dollars in extra costs, driving up the cost of housing in the State desperate for new production. The 2025 reforms represent a significant rollback:

• Massive New Exemption: AB 130 created a statutory CEQA exemption for "urban infill" housing projects on sites up to 20 acres. This significantly expands the previous 5-acre limit.

• "Narrow Miss" Protection: SB 131 ensures that if a project fails a single condition of an exemption, the environmental review is limited only to that specific issue, rather than requiring a full, multi-year Environmental Impact Report (EIR).

• The 30-Day Shot Clock: Agencies now have only 30 days to approve or disapprove qualifying projects, a major shift from the years-long timelines typical in many jurisdictions.

Transit-Oriented Development & Upzoning (SB 79)

Recognizing the need for density near transit, SB 79 (the "Wiener Transit Bill") became the landmark zoning law of the year:

• Upzoning Major Hubs: It requires major counties (including L.A. and the Bay Area) to allow residential buildings up to nine stories near high-frequency rail and bus stops.

• State Overrides: This law effectively overrides local zoning, even in neighborhoods previously reserved for single-family homes, provided they are within walking distance of "major transit stops."

  
  

Single-Stair Building Reform

While the state is still finalizing a uniform code, 2025 saw the first successful "point access block" implementations in California:

• Culver City Pioneer: Culver City became the first city in the state to legalize single-staircase apartments up to six stories high. This allows for more "family-sized" 3-bedroom units on small lots that were previously undevelopable.

Texas

Texas has enacted some of the most ambitious reforms in the nation this year, aimed at reducing construction costs, increasing density, and limiting local barriers to development:

• Commercial-to-Residential State Preemption (SB 840): Cities with high demand can now convert commercial properties into residential or mixed-use developments without restrictive local zoning rules. Key caps include a minimum density of 36 units per acre, parking limits of 1 per unit, and maximum setbacks of 25 feet.

• Senate Bill 15: capping minimum lot sizes in large cities to around 3,000 sq ft and limiting restrictive setback, width, and density rules on new single-family developments. The law targets “greenfield” lots in high-demand areas, making it easier and more affordable to build smaller homes. Combined with other reforms like single-stair buildings and commercial-to-residential preemption, SB 15 is designed to increase housing supply and reduce entry-level housing costs in major Texas markets.

• Single-Stair Reform (SB 2835): Buildings up to six stories with four units per floor can now use a single-stair design, dramatically lowering construction costs. Communities can opt in easily, streamlining approvals while ensuring safety. Austin City Council has already adopted the single-stair building code reform.

• “Defanging” Abutter Appeals (HB 24 & SB 15): Neighboring property owners now face limits on blocking rezonings or enforcing oversized lot requirements, reducing hurdles for small, affordable homes.

• Local Initiatives: Dallas eliminated most minimum parking requirements for residential developments under 200 units and for small commercial uses, lowering the cost and complexity of housing development.

Montana

Montana continues to emerge as a housing policy innovator responding to the previous reforms passed in the so called 'Montana Miracle' by doubling down, passing many of the recommendations in Govenor's Gianforte's Housing Task Forces 2024 recommendations. You'll notice a lot of similarities between the reforms recommended in this report and similar statewide production oriented reports in places like Massachusetts.

• Parking Minimum Exemptions (HB 492): Limits local governments’ ability to require excessive off‑street parking for new residential developments.

  • Municipalities cannot mandate more than one parking space per dwelling unit in new construction, and no minimum parking for certain smaller units (under 1,200 sq ft), deed‑restricted affordable homes, renovated existing buildings, childcare facilities, and assisted‑living units. This reduces a major cost driver in housing development and gives developers more flexibility on parking.

• Single-Stair Reform (SB 213) The new law allows residential buildings (Group R-2 occupancy) to be constructed with just one exit stairway if they meet the following safety criteria:

  • Height Limit: Up to six stories above grade.

  • Unit Density: No more than four dwelling units per floor.

  • Fire Suppression: Must be equipped with an automatic sprinkler system.

  • Emergency Access: Each unit must have at least one window or alternative emergency exit provision.

• Statewide Zoning and Permit Streamlining: These measures encourage mid-sized and multifamily housing, enabling faster approvals and more flexible urban development.

Oregon

Oregon has long been a pioneer in statewide land-use planning, but 2024 and 2025 marked a definitive shift toward "housing abundance" through aggressive production mandates and the removal of local veto power. Following the passage of the 2024 Emergency Housing and Stability Package, Oregon’s 2025 session focused on implementation and "cutting red tape" for developers.

The Housing Accountability & Production Office (SB 1537)

A centerpiece of Governor Kotek's agenda, this law (fully active in 2025) created the HAPO, a state-level office with the teeth to enforce housing laws:

• Mandatory Adjustments: Developers can now bypass certain local design standards (like setbacks or height limits) if they meet specific affordability or density criteria.

• One-Time UGB Expansion: Qualifying cities can expand their Urban Growth Boundaries (UGB) by up to 100 acres (300 in the Metro area) without the typical years-long review, provided 30% of the units are deed-restricted as affordable.

• Limited Land Use Decisions: It converts many previously discretionary local reviews into "limited land use decisions," which require faster timelines and clearer, objective standards.

  
  

Landmark Zoning Reform & "Underperforming" Cities

In December 2025, the state adopted the Oregon Housing Needs Analysis (OHNA) rules, fundamentally changing how cities plan:

• The "Model Code" Hammer: Oregon became the first state to create a statewide model zoning code. If a city is "underperforming" its housing targets, the state model code, which legalizes 3-4 story apartments in most neighborhoods, can become mandatory.

• Capacity to Production: Cities must now shift their focus from proving they have land to proving they are actually building units.

  
  

"Oregon Homes" Pre-approved Plans (HB 2258)

To lower costs for small-scale developers and homeowners, the state launched the "Oregon Homes" program:

• Permit-Ready Blueprints: The state now provides a catalog of pre-approved building plans for ADUs, duplexes, and small apartments. If a builder uses these plans, local jurisdictions are largely prohibited from secondary design reviews, significantly shortening the "time to shovel."

Middle Housing & Infill Expansion (HB 2138)

Building on Oregon's famous 2019 "duplex law," the 2025 reforms closed loopholes that cities used to slow down "missing middle" housing:

• Siting Flexibility: The bill allows duplexes, triplexes, and cottage clusters on lots with existing ADUs.

• Traffic Analysis Waiver: It eliminates the requirement for expensive Traffic Impact Analyses (TIAs) for housing projects of 12 units or less.

• Density Bonuses: Builders now receive automatic density increases if they include units that are either ADA-accessible or affordable at 120% AMI.

Infrastructure Financing (HB 3031)

This is key and often overlooked in many states. While NIMBYs will point to water and sewer capacity as reasons to block nearly every housing development, there are legitimate concerns in many areas and increased infrastructure funding must be provided to communities to unlock new housing production, not necessarily saddled on the developers budget for every local infrastructure enhancement. Recognizing that zoning alone doesn't build homes if the pipes can't handle them, the state created a massive new funding stream:

• The Housing Infrastructure Project Fund: This fund provides grants and low-interest loans specifically for "shovel-ready" water, sewer, and transportation projects directly linked to new housing developments.

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Residential Infill Project (RIP): Portland has also seen success from it's Residential Infill Program allowing small density increases in traditional single family neighborhoods across the City. From 2021 to 2024, the program has resulted in 1,400 middle housing units produced across the City, with each unit selling for between $200,000 and $300,000 less than a typical single family home in the same neighborhood. More on the program.

Colorado

• Single-Stair Reform: Requires certain municipalities to allow up to five‑story multifamily residential buildings to be served by a single exit stair, reducing construction costs and encouraging more housing development.

• Construction Defects & Middle Market Housing: Reforms construction defect liability laws to reduce barriers and costs for building condos/townhomes, helping spur more middle‑market housing.

• Regional Building Codes for Factory‑Built Structures: Makes it easier to use modular and factory‑built homes — a faster, lower‑cost way to add housing supply.

• Tap Fees Imposed by Special Districts: Standardizes and reduces costly tap fees that can delay housing construction and raise prices.

Maine

Expanded Housing Density and Zoning Flexibility (LD 1829)

In 2025, Maine enacted LD 1829 — An Act to Build Housing for Maine Families and Attract Workers to Maine Businesses by Amending the Laws Governing Housing Density, which significantly changed zoning and land‑use rules to encourage more housing production. Key provisions include:

• Allowing more units per lot statewide: Municipalities must allow at least three dwelling units on any lot where residential uses are permitted, and four units if the lot is in a designated growth area or is served by public water/sewer.

• Limits on municipal restrictions: The law prohibits local growth caps and overly restrictive zoning in designated growth areas, and mandates less restrictive minimum lot sizes and density requirements (e.g., max 5,000 sf minimum lot size for lots in growth areas with infrastructure).

• Streamlined review: Projects with four or fewer units are generally subject to administrative staff review rather than planning board hearings, lowering procedural barriers.

• Height and density bonuses: Affordable housing projects can exceed local height limits by a story in many cases, to encourage more production near water/sewer infrastructure.

Other Reforms

• New Hampshire: Legalized single-stair buildings up to four floors statewide and capped statewide minimum parking requirements at 1 space per unit.

• Rhode Island: Legalized townhomes across zones, expanded mixed-use overlays, and modernized permitting and building codes.

• Salem, MA: Eliminated minimum parking for new multi-family housing, encouraging walkable, affordable neighborhoods while preserving historic areas in the nearly 400-year old City.

• Chicago: Reduced residential parking minimums near transit to enable infill development and preserve older building stock.

• Denver: Eliminated citywide minimum parking requirements.

• Montgomery County, MD: Approved middle housing, including duplexes, triplexes, and small multi-family buildings along transit corridors.

Why 2025 Was Different

The U.S. housing crisis is getting far more attention today because its impacts have become unavoidable across class, geography, and generation. What was once framed as a localized affordability problem in a few coastal cities is now a nationwide constraint on economic growth, family formation, and workforce stability. Rapidly rising rents and home prices, higher interest rates, and years of underbuilding have collided, making housing insecurity visible to middle-income households, employers, and local governments alike. Teachers, nurses, first responders, and young families are being priced out of the communities they serve, while businesses struggle to hire and retain workers. At the same time, better data, social media, and post-pandemic migration patterns have made the mismatch between where homes exist and where people need to live harder to ignore, turning housing from a niche policy issue into a central economic and political concern.

This year represents a turning point for U.S. housing policy. With bipartisan momentum and lessons learned from decades of stagnation, states like California, Texas and Montana are demonstrating that bold, flexible reforms, from single-stair apartments to preempting restrictive local rules, can unleash substantial housing supply without sacrificing safety or community character. I'm hopeful that while we see these dramatic policy reforms from some States and regions, others who have been much slower to adapt combined with city-level efforts to remove parking mandates and accelerate approvals, the U.S. may finally be entering a period where housing supply can catch up with demand.

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Jonathan Berk is an experienced strategic urbanist, attorney, and policy innovator with over a decade of expertise in promoting reforms in housing, land use, and economic development through impactful public-private initiatives. He possesses deep knowledge of the structural obstacles to housing production and economic growth, such as regulatory hurdles and financing challenges, and has a proven track record of creating collaborative solutions that unlock opportunities and achieve measurable results. He is a skilled communicator, published thought leader, and a trusted advisor to policymakers, planners, and advocates working where policy, capital, and community intersect.