How the AEI Housing Center Is Addressing the Housing Shortage with Playbooks

How the AEI Housing Center Is Addressing the Housing Shortage with Playbooks

By Jovana Campos
May 21, 2026

The U.S. has faced a persistent housing shortage for more than a decade, and today the nation is short over 4 million homes. For many families, especially within the Hispanic community, homeownership is a symbol of the American Dream. Latinos have consistently driven household formations year over year, gaining 441,000 owner households in 2025 alone. Yet, for many Latino families, limited housing supply and rising costs continue to put homeownership out of reach. Expanding housing inventory and increasing affordable starter homes would unlock homeownership opportunities for the Latino community at a level never seen before.

One of NAHREP’s 2026 Policy State and Local recommendations is to expand housing supply through zoning and land-use reform, which urges legalizing a broader range of housing types, including duplexes, triplexes, townhomes, and accessory dwelling units (ADUs), and minimizing lot size requirements to allow smaller lots and more entry-level homes.

AEI Housing Playbooks Provide Actionable Solution

In late 2025, the AEI Housing Center partnered with the U.S. Chamber of Commerce to create Strong Foundations: A Playbook for Housing and Economic Growth to address the imbalance between U.S. housing supply and demand. The current shortage is driving up prices for existing homes, making homeownership less affordable for the average household. It also pushes many potential homebuyers to migrate to more affordable communities, often resulting in longer commutes to work and schools.

These playbooks were designed to provide actionable solutions for housing shortages, rising home prices, and limited workforce mobility. They give policymakers, local officials, and community stakeholders a variety of customized, location-specific data to help transition a challenged market into one that fosters housing growth and economic mobility across the nation.

Small Lots, Small Lots, Small Lots

The playbook recommends leveraging small lots to improve new housing supply under the Keep it Short and Simple (KISS) principle. Instead of relying on expensive government subsidy programs, their approach is meant to be more straightforward: legalize more housing types in places where demand already exists, such as small lots! The idea is simple:

• Smaller lots -> lower land costs
• Smaller homes with standard finishes -> more affordable homes for working families

To support this effort, the playbooks organize their recommendations around three key strategies (referred to as “Options” in the playbook), each designed to increase the development of new starter homes.

1. Lot size flexibility in new subdivisions. Building homes on small lots will give more affordable options that most working families can afford.
2. Home dwelling type and lot flexibilities on existing lots. Splitting existing lots in single-family neighborhoods to allow different residential properties, including triplexes, duplexes, townhomes, and ADUs.
3. Flexibility to build homes near jobs.Legalizing building single-family, multifamily, and mixed-use residential homes near commercial or non-residential areas. This makes use of underused land and build neighborhoods near jobs, shops, and amenities.

The AEI Playbooks in Action

The AEI Housing Center created 6,000+ playbooks that are tailored for all states, including 500+ metro areas, 1,000+ counties, and over 4,5000 cities. In early 2026, the AEI Housing Center began tracking the playbooks’ legislative progress, and as of today, a total of 21 U.S. state legislatures have one or more bills pending, enacted, or passed. Here are a few insights on passed bills.

• Washington: Passed bills SB 6026 and HB 2480 to stop cities from banning housing and residential use in commercial or mixed-use areas. This means that housing can now be built in places among shopping centers, offices, and commercial strips.
• Kansas: Passed bill SB 418 to streamline approval processes for housing development and reduce minimum lot sizes to allow for townhomes and ADUs by-right. This means that starter homes will now be easier to build with fewer regulations in place.
• Virginia: Passed SB 531 to legalize ADUs by-right in single-family residential zones under reformed zoning. This means that homeowners can now build ADUs without having to go through a long and expensive process, making affordable housing options easier to obtain.

Take Your Local Playbook & Run With It!

As housing advocates and as part of NAHREP’s 2026 policy priorities, it is our job to urge for a better housing supply and put an end to this crisis. As the year progresses and playbook-backed legislation continues to advance, take time to review your local playbook and stay informed about what’s happening in your community. At the same time, identify ways that you can get involved.

Take a look at your local playbook here, and include it in your next advocacy initiative. Run with it!