US Zoning Reform 2025: State-by-State Breakdown

TL;DR

• The US has a 3.85–3.9 million unit housing shortage. Restrictive zoning is the primary structural cause.
• At least 12 states passed meaningful zoning preemption or reform laws between 2019 and 2025.
• Each reform creates a new legal framework that changes what can be built—and where—at scale.
• For developers, investors, and property platforms, tracking these shifts in real time is now a core operational requirement.

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Why Zoning Reform Is the Most Important Structural Story in US Real Estate

The United States is short roughly 3.85 to 3.9 million housing units, according to the 2024 Up For Growth National Housing Underproduction Report. Every major housing economist agrees that restrictive local zoning is the primary cause.

Regulatory barriers—minimum lot sizes, height limits, single-family exclusion zones, parking minimums—inflate the cost of multifamily housing by up to 41%, according to research cited by the National League of Cities. One-third of residential land in major US cities prohibits any multifamily housing at all.

The policy response is now well underway. Over the past six years, a wave of state-level zoning preemption has fundamentally changed the legal landscape. Here is what happened, state by state.

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The Reform Ledger: State-by-State

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Oregon: The First Mover

Oregon's House Bill 2001, passed in 2019, was the first state law in the US or Canada to legalize duplexes statewide and fourplexes in cities over 25,000 people. The results are now measurable.

In Eugene, fourplex and attached housing permits accounted for 11% of all permits in 2023, up from 3% before the reform. Smaller cities saw even sharper shifts:

• Keizer (population 39,000): from 9% to 42% of all residential permits
• Troutdale (population 15,700): from 17% to 47% of all residential permits

A Portland economic impact study estimated that fourplex legalization would increase the city's homebuilding rate by approximately 20%, satisfying 13–15% of the region's projected 20-year demand.

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California: Scale and Complexity

California's reforms are the most sweeping in dollar terms, given the state's market size. ADU permits alone jumped from approximately 6,000 annually in 2018 to 16,000 by 2019 following the first wave of state ADU preemption—and have continued to climb since.

SB 9, effective January 2022, is more complex in practice. It allows homeowners to split a single-family lot and add units, theoretically enabling up to 4 homes on what was previously a single-family parcel. Implementation varies significantly by municipality.

One equity gap that has emerged: 40% of high-value homes have permitted or completed ADUs, versus only 2% of the lowest-value homes. The regulatory reform happened; the economic access did not uniformly follow.

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Montana: The Policy Laboratory

Montana has become an unexpected model for zoning reform. Home prices in the state rose from $239,000 in 2018 to $428,000 by 2024—a 79% increase in six years—driven in part by population inflows and constrained supply. The state legislature responded with a bipartisan package of reforms in 2023 that overrode local single-family exclusion zones and eased ADU restrictions statewide.

The 2025 follow-on reform goes further: starting October 2026, homes under 1,200 square feet in Montana's 10 largest cities will be exempt from parking minimums. Since approximately 80% of US apartments and condos are under 1,200 square feet, this change affects the overwhelming majority of new multifamily supply.

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What This Means for Property Data Platforms

Every state reform creates a new layer of legal complexity that must be tracked, interpreted, and operationalized by anyone making property decisions at scale.

Consider what changed with Oregon's HB 2001 alone:

• Zoning classifications that previously restricted lots to one unit now allow four
• By-right development eliminated the need for discretionary review on thousands of parcels overnight
• FAR and setback standards were updated in most jurisdictions to implement the state law
• Overlay districts were created or modified to define where the new rules apply

For a developer with a regional portfolio or a data platform serving enterprise clients, tracking these changes manually across 12+ states and thousands of municipalities is not operationally viable.

The firms that will move fastest on post-reform opportunity are those with systems that can answer a question like: "Which parcels in the Portland metro now allow 4 or more units by-right, have lots over 6,000 sq ft, and are within 500 feet of transit?" — in seconds, not weeks.

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The Coming Wave

Reform is not slowing down. Washington State passed comprehensive zoning preemption legislation in 2025. Several other states have active bills moving through legislatures. The political coalition behind housing supply reform now spans progressive housing advocates, libertarian property rights groups, and business-oriented fiscal conservatives—an unusual and durable alignment.

For anyone operating in US real estate development, investment, or data infrastructure: the question is not whether the zoning map will keep changing. It already is.

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ZoningGraph Team

ZoningGraph is an AI-powered zoning intelligence platform that converts fragmented zoning codes, parcel histories, and land-use regulations into a unified knowledge graph for enterprise property platforms.