State and local housing policy in 2026 sits at a crossroads: more bipartisan attention on affordability than ever, but policies that often pull in opposite directions. Here's what's shaping the conversation in state and local governments.
- Supply Acceleration — With 2025 home sales tied for their lowest in 30 years and an estimated 4-million-unit underbuilding gap, states are pushing zoning reform, permit "shot clocks," and mobility incentives, while a growing state-vs-local fight over authority will shape how far these efforts go.
- Barriers to Affordability — Homeowner costs now exceed 31% of median income, driven by an 8-9% jump in insurance premiums and property taxes up nearly 30% since 2019, pushing lawmakers explore solutions to address housing affordability “cost stack.”
- Property Rights and the Rental Market — Tenant protection bills nearly tripled year-over-year, and where rent control and layered tenant rules already exist, REALTOR® associations report shrinking supply and mom-and pop landlords exiting the market.
