While estimates vary, most experts agree that the United States is facing a severe housing shortage.
The U.S. Chamber of Commerce estimates the national housing shortage at nearly 5 million homes, while the National Low Income Housing Coalition says there is a shortage of 7.1 million rental homes affordable and available to struggling renters.
In California alone, the state’s Legislative Analyst’s Office has calculated a deficit of 2.7 million units. In Texas, the figure is significantly lower at more than 300,000 homes needed to meet current population demand, hitting lower- and middle-income families the hardest, according to a report from the Texas comptroller.
Though there is no single “silver bullet” to solve this crisis, zoning reform would be “one important piece of the puzzle and a major step forward,” says Toccarra Nicole Thomas, director of land use and development at Smart Growth America.
That’s why smart growth advocates, academics and many politicians — backed by organizations like the National Association of REALTORS® — are pushing for zoning changes.
Nationally, the new 21st Century ROAD to Housing Act, which became law this year, encourages local governments receiving federal Community Development Block Grant funds to remove restrictive zoning and land-use barriers that slow down home building.
Changes advocated by many planners include streamlining approval processes by replacing discretionary, neighbor-vetted public hearings with clear, administrative “by-right” approvals to speed up construction timelines, reducing parking minimums, permitting housing in empty office parks, vacant retail spaces and commercial zones and allowing for accessory dwelling units (ADUs).
Zoning reforms frequently include legalizing missing middle housing such as duplexes, fourplexes and small courtyard apartments in single-family neighborhoods.
They also often include adopting form-based zoning codes, which can help increase housing stock by regulating the physical shape and placement of buildings rather than prescribing land uses, allowing developers to easily build diverse, multifamily and mixed-use housing on land that traditional zoning restricts.
Another change would boost transit-oriented density by easing height and density caps near major transit hubs and commercial corridors to house more people close to public transportation.
“But these things don’t necessarily come easy,” said Thomas. “To get there requires a blend of the technical details, political will, meaningful community engagement and messaging.
“The technical details are often easy,” she said with a chuckle. “And there are a lot of people at the local level who say they want to change zoning. But when you get into a conversation and say the ‘Z’ word, well, that’s when the pitchforks start coming out.”
Thomas said the best zoning reform often comes with support from the “bottom up rather than technocrats at the top telling residents what is good for them. That’s because the locals are the ones who live with the built environment every day.”
“It’s definitely a nuanced conversation. You need the expertise to get things right, but relevant community involvement is important.
“And even then, the opposition may still come out and co-opt the process,” she added. “The long and short of it is whenever we’re making changes in zoning, even if it’s as small as changing one word, it can be seen as a huge deal if all the stakeholders are not part of the process.”
Thomas said residents of traditional single-family subdivisions — which have been the de facto standard in American housing since World War II — sometimes react strongly to introducing missing middle housing.
“They are alarmed and say ‘You want to put an apartment building next to my home?’ They sometimes freak out because the concept of missing middle housing is so different from what they’ve experienced their entire lives.
“It goes back a long way,” she said, citing the 1926 U.S. Supreme Court “Euclid” case in which Justice George Sutherland stated that in single-family residential districts, “very often the apartment house is a mere parasite, constructed in order to take advantage of the open spaces and attractive surroundings created by the residential character of the district.”
The court used that reasoning to uphold comprehensive municipal zoning laws (specifically, the right of a suburb to ban multifamily apartments from single-family neighborhoods), claiming apartments block light and air, increase traffic noise and “come very near to being nuisances” in the wrong location.
In Illinois, the housing shortage is changing some of those attitudes about multifamily housing, says Neeley Erickson, government affairs director for Illinois REALTORS®.
She cited the McHenry Missing Middle Initiative as an effort to move the housing conversation forward and create more dwelling units in the state. It focuses on the community of McHenry, which has a population of around 27,000 and is about 50 miles northwest of downtown Chicago.
According to its website, McHenry has an average household size of 2.66 persons and a median household income of $68,024. Of its 10,075 households, approximately 7,719 are owner-occupied and 2,356 are renter-occupied. The median resident age is 37.1.
“Illinois is experiencing both a shortage of housing and a shortage of housing choices,” Erickson said. “The housing that does get built is detached single-family homes or larger multifamily developments. What is often missing are the smaller-scale housing types in between, such as duplexes, fourplexes, townhomes, cottage courts and small multiplexes.
“These smaller-scale housing options can help add much-needed supply while creating more attainable choices for first-time homebuyers, young professionals, workforce households and older adults looking to downsize while remaining in their community.”
She said the McHenry initiative was designed to identify local zoning barriers that may unintentionally limit these housing options and explore strategies to expand housing opportunities while respecting the character of existing neighborhoods.
Erickson said a 2025 University of Illinois study finding that the state will need to build 227,000 units over the next five years to keep pace with demand reinforces what REALTORS®, local governments, employers and residents have been experiencing for years.
“The housing shortage is affecting communities of every size,” she said. “As demand continues to outpace supply, home prices and rents become less attainable, making it more difficult for people at every stage of life to find housing that meets their needs.”
Erickson said housing markets don’t stop at municipal boundaries. “People look across an entire region when deciding where to live, and employers recruit workers from throughout the region. That means no single community can solve the housing shortage alone.
“If only one municipality creates opportunities for new housing while neighboring communities do not, the regional shortage remains. Communities throughout a region must work together to expand housing opportunities if we want to make meaningful progress.
“That is why addressing the shortage will require multiple strategies. Increasing housing production, modernizing zoning where appropriate, supporting infrastructure investments and expanding housing choices all have a role to play.”
She said missing middle housing became the focus for McHenry because it is often one of the most practical ways to increase housing supply. “It introduces housing types that are compatible with existing neighborhoods while providing more attainable options than many newly constructed detached homes.
“Rather than focusing on large apartment developments, the initiative explored how smaller-scale housing types could fit into existing neighborhoods through thoughtful design and zoning updates.”
Erickson noted that while every community is different, common zoning barriers identified during the McHenry initiative included zoning regulations that limit housing types, minimum lot size requirements, parking requirements, density restrictions, setback requirements and approval processes that can increase uncertainty, time and development costs.
“The initiative evaluated these barriers to identify opportunities where modest zoning changes could increase housing opportunities while maintaining community standards,” she said.
McHenry’s missing middle housing scan evaluated a variety of housing types, including accessory dwelling units (ADUs), duplexes, triplexes, fourplexes, townhomes, cottage courts and smaller-lot homes.
It also encourages communities to evaluate a range of housing options, including manufactured or factory-built modular housing — where appropriate and consistent with local goals, she said. Modular homes can often be completed in half the time and reduce costs by 25 percent.
“The purpose was not to recommend every housing type in every location, but to identify opportunities where additional flexibility could expand housing choices while remaining compatible with the surrounding area. Any future zoning changes remain a local decision of the city.”
Erickson pointed to the McHenry work as “an example of what other communities could accomplish through the Illinois Housing Supply Accelerator,” a new program launched by Illinois REALTORS®.
She said one of the most valuable components of the McHenry initiative was the Test Fit analysis completed by Opticos, a Berkeley, Calif.-based architecture and urban design firm.
“Rather than discussing housing concepts in the abstract, the team evaluated actual infill sites within McHenry to demonstrate how different housing types could fit within the existing community if zoning regulations were modified.”
She said Test Fits help local officials and residents move beyond the term “missing middle housing” and actually see what those housing types could look like in their community.
“That visualization creates a much more informed conversation about neighborhood compatibility and housing choices than simply discussing concepts or zoning regulations, moving the conversation from ‘that doesn’t fit in my community’ to ‘Oh wow, I see how that could work,’” she said.
The Test Fits also provide communities with conceptual examples they can use to determine whether there is market interest, she added. “If a community chooses to move forward, those concepts can serve as the basis for issuing a request for proposals to builders or developers interested in bringing similar housing to the community.”
The approach has proven so valuable, Erickson said, that the process is being replicated through a new partnership with the Village of Poplar Grove, Boone County, Growth Dimensions — Boone County’s economic development organization — and Opticos. “Using the same Test Fit methodology, the team will evaluate potential sites and develop conceptual housing scenarios to help local leaders and residents visualize opportunities to expand housing choices.”
Some 300 miles to the southwest in St. Louis, the city reduced the minimum lot size requirements last year for single-family homes.
Those limits dropped to a 2,000-square-foot minimum from the previous 4,000 square feet, unlocking thousands of small vacant parcels for infill housing. That move is part of something dubbed ZOUP, a broader zoning overhaul described as the first major rewrite and map update since the mid-20th century. It has also been called “A Modern Code to Meet the Moment.”
St. Louis’ population now stands at 301,578, down from a high of 856,796 in 1950 before white flight to the suburbs began.
Jim Fister, a senior planner for the City of St. Louis, described the current zoning code as “clunky and archaic.”
But he said progress is being made. In addition to reducing the lot size requirements last year, the city’s planning commission unanimously adopted a new Strategic Land Use Plan that imagines, and plans for, a St. Louis that is dense, walkable, equitable and amenity-rich and that creates opportunity for all.
“We need to create more space for local developers and small businesses to build homes and permit their businesses in the interior of neighborhoods, whereas right now it’s incredibly complicated,” he said.
“We also need better regulatory tools for existing uses and existing businesses.
“But the thing that we are most excited about is [replacing] a code that is not really incentivizing the establishment of more housing units.”
