Three State-Level Housing Reforms to Watch in 2026

A blog empowering Hispanic homeownership through advocacy and policy.

By Elizabeth Nimmons
January 29, 2025

As federal housing debates continue, state legislatures across the U.S. are quietly advancing structural reforms that expand where and how housing can be built. For real estate professionals focused on expanding access to homeownership, especially in Latino and first-time buyer markets, understanding these state policy developments is essential.

These reforms are not one-size-fits-all fixes to the national housing supply and affordability crisis, but they represent concrete steps toward unlocking supply and making more homes attainable in high-demand regions. Below are three state reforms worth tracking this year and why they matter for housing affordability and homeownership opportunity.

1. California’s Transit-Oriented Upzoning and Environmental Review Reforms

California continues to lead on housing supply innovation, and 2025 brought some of the most consequential reforms in years. One of the most closely watched pieces of legislation is Senate Bill 79, also known as the Abundant and Affordable Homes Near Transit Act. The bill, which was signed into law October 10, 2025 and is scheduled to take effect on July 1, 2026, requires upzoning near major transit stations, allowing developers to build taller, denser residential housing, regardless of existing local zoning restrictions.

SB 79 is paired with broader state reforms that streamline environmental reviews and permitting for infill housing. For example, Assembly Bill 130 exempts many infill housing projects from the California Environmental Quality Act (CEQA), a historically complex review process that has long delayed housing development.

Why it matters:

• Upzoning near transit helps shift housing production toward walkable, job-rich corridors where supply has historically lagged.
• CEQA streamlining reduces legal and administrative barriers that often leave projects stuck for years.
• Together, these reforms signal a continued state commitment to increasing housing capacity.

For industry professionals, the key takeaway is that location matters more than ever, both in terms of where new supply may materialize and where buyers may find emerging opportunities.

2. Arizona’s Expansion of Accessory Dwelling Unit (ADU) Rights

Accessory dwelling units (ADUs) have become an increasingly popular tool for expanding housing options without large-scale development, especially in areas with limited open land.

In 2025, Arizona passed House Bill 2928, which strengthens state requirements for ADUs in municipal and county zoning codes. The law mandates that counties allow at least one attached and one detached ADU wherever single-family homes are permitted, and it limits local restrictions on size, setbacks, and parking requirements.

Why it matters:

• ADUs can provide additional housing units on existing residential lots with minimal infrastructure costs.
• By removing common regulatory barriers, Arizona’s law broadens the contexts in which ADUs can be built, including rural and suburban areas that previously lacked clear pathways for accessory units.
• For markets with tight supply, ADUs represent a flexible strategy to expand inventory and create more attainable entry points for both buyers and renters.

Industry professionals should watch how ADU implementation evolves locally, as clear and permissive rules can make these units a practical supply lever for owner-occupied and rental housing.

3. Florida’s Live Local Act: State Preemption to Expand Housing Zones

Florida’s Live Local Act continues to reshape statewide housing policy by preempting restrictive local zoning in favor of broader development authority. Originally passed in 2023 and significantly expanded through 2025 updates, the law allows developers to build multifamily and mixed-use housing on sites traditionally limited to commercial or industrial use without needing rezoning or lengthy hearings, provided a portion of units are set aside as affordable or workforce housing.

Why it matters:

• Florida’s approach flips the typical land-use process on its head by using state authority to override local restrictions seen as barriers to supply.
• By tying local preemption to specific affordability commitments, the law aims to expand housing options where supply has lagged demand.
• These reforms could unlock new development patterns especially in fast-growing urban and suburban regions, helping meet the needs of working families priced out of traditional single-family markets.

For real estate professionals, Florida’s experience offers a case study in aggressive state-level action and a preview of how state preemption might evolve in other markets.

What This Means for Real Estate Professionals

State housing reforms are evolving quickly, and supply strategies that seemed novel a few years ago are now being codified into law. Whether through upzoning near transit, facilitating ADUs, or expanding by-right development opportunities, these reforms reflect a broader acknowledgement: local action alone is not enough. State policy change is vital to unlocking housing production.

For real estate professionals serving first-time and Latino homebuyers, understanding these state trends can:

• Help anticipate where new inventory and development opportunities may emerge.
• Inform conversations with buyers about long-term value and access.
• Provide context for how policy shifts influence market dynamics in high-growth regions.

Looking Ahead

As 2026 progresses, keep an eye on how these reforms are implemented and where similar measures arise in other states. From permitting timelines to zoning flexibility and state-level incentives, the policy tools that expand housing supply will remain central to addressing affordability.

NAHREP will continue spotlighting critical state and federal housing policy developments that impact access to homeownership for Latino families. Stay engaged, informed, and ready to leverage these insights in your professional work.