The housing crisis, defined by a lack of supply and affordability, has touched nearly every corner of the U.S.
“There is no region that's immune from this discussion,” Jason Jordan, principal of public affairs for the American Planning Association, said during a National League of Cities panel on zoning in Salt Lake City last year. “What was … pigeonholed as maybe a problem mostly focused in high-cost metros in previous years is now a workforce housing challenge in smaller regions.”
In the 2010s, in the wake of the Great Recession, the U.S. produced the fewest single-family homes since the 1960s. The result of that drought has been severe, including an unprecedented rise in homelessness. In 2025, the nation’s median home price soared to a record high, while the proportion of first-time homebuyers plunged to a record low. Last year, the median first-time homebuyer age also hit a record high of 40.
The housing crisis has local governments re-evaluating longstanding municipal codes and decades-old housing restrictions and permitting processes that housing advocates, builders and others say can choke development.
Dallas epitomized such efforts last year. In 2025 alone, the city slashed its parking requirements for new developments and rewrote its building code to make it less burdensome to build small multifamily buildings.
“Over the years, [cities have] just added more and more regulation. Now is the time to think about it differently,” Dallas Planning and Development Director Emily Liu said during the NLC panel. “The more restrictive you are, the more constraints you put on the housing supply.”
Here’s how Dallas rewrote its housing policies and how other local governments are following similar paths to spur housing production in 2026.
A housing construction leader, still falling short of need
Dallas already issues permits for and sells more new homes than most other U.S. cities, but housing supply and affordability challenges persist.
According to the Dallas 2024 housing action plan, 72% of renters with mid-range incomes were cost-burdened in 2022, and fewer than 20% of renters — only those making $100,000 or above — can afford to buy a median-priced home in the city.
As of 2022, the city faced a shortage of nearly 40,000 rental homes affordable to those who earn 50% of the area median income, about $55,000.
“Without intervention, this rental deficit is projected to grow to 70,210 rental homes by
2033, as job growth continues to outpace home production,” the report states.
Fewer parking spaces, more homes
Liu said when she and her staff lifted the proverbial hood of the city’s codes, they found that parking and new housing development were intricately linked — and not always in a way that made sense. The number of off-street parking spaces required for new housing was based on the number of bedrooms in the home.
"Those are very expensive,” Liu said of parking spaces. “They're $60,000 to $80,000 per spot.”
As a result, most of the multifamily housing built in the city consisted of one-bedroom and a smattering of two-bedroom units, according to Liu. "Hardly any three bedroom,” she said.
The city amended its code to add more flexibility. Now, any housing development with 20 or fewer units has no minimum parking requirement. Buildings with 21 to 199 units require half a parking space per unit, while buildings with 200 units or more require one parking space per unit — regardless of the number of bedrooms.
“You've freed up the land for more housing,” Liu said of the changes. “You also significantly reduce the cost” of housing development.
Liu credited better messaging for helping get the parking reforms approved by the City Council in Dallas, a city she said is very car-centric.
The proposal “used to be called ‘eliminated parking,’ and people were just freaking out,” Liu said. “And so we changed the message” to call it “flexible parking.”
“It’s really about flexibility,” said Liu. “It’s not about ‘no parking.’”
Reforms to trim parking space mandates gained traction in other metro areas, including Chicago and Baltimore, last year as well..
Nicholas Julian, director of land use at the National Association of Home Builders, said the focus for cities in 2026 is shifting from “allowance” — such as zoning changes that permit more diverse types of housing — to "feasibility."
“Parking reform—often the elimination or sharp reduction of minimum parking requirements—has proven to be one of the most impactful and widely adopted tools for improving project feasibility, particularly for infill and small-scale development,” Julian said in an email.
Rebuilding building codes
Building codes are another important tool cities can use to address housing supply, Liu said. She said there are two main types: the International Residential Code, which Dallas applied to single-family housing and duplexes, and the International Building Code, which it applied to all other types of buildings, following the national model code.
A triplex, therefore, had roughly the same regulation as the city’s 72-story Bank of America skyscraper despite being much closer to a duplex in size and complexity, Liu said. That was likely quashing the production of “missing middle” homes, small multifamily buildings such as triplexes or fourplexes that more cities are encouraging to tackle housing affordability challenges.
Once again, the city proposed changes to the code. Today a modified version of the International Residential Code in Dallas applies to housing with up to eight units and up to three stories, with a maximum floor area of 7,500 square feet, reducing costs and regulations for a greater range of housing types.
The code change means these small multifamily residential buildings no longer require a sprinkler system, which can be costly, according to Liu. The buildings must have fire walls, she said.
Achieving buy-in from the city’s fire chief was key to that reform’s success, she said.
“You definitely need to get your fire chief on board, and you have to understand where they're coming from,” Liu said. “Their perspective is public safety.”
Building code requirements can drive up costs that stifle the construction of missing middle housing, according to a study the Harvard University Joint Center for Housing Studies conducted in Massachusetts. Dallas’s changes were inspired by work in Memphis, Tennessee, where Chief of Development and Infrastructure John Zeanah has made strides in updating building codes to encourage more housing and sharing steps other localities can take.
National League of Cities Housing and Community Development Director Lauren Lowery expects regulation changes that increase housing supply to become more prevalent in 2026.
“The most promising reforms are those that take a systems-level approach,” Lowery said in an email. “Zoning and regulatory changes work best when they are aligned with building codes, infrastructure standards, financing and underwriting requirements, and local permitting capacity.”
Multiple strategies needed
If anything’s been made clear about the housing crisis in recent years, it’s that there’s no single, quick fix for cities.
“This is a challenging public policy where there is no one solution that will solve it,” APA’s Jordan said. “But locals have their hands on a lot of solutions.”
Rezoning land for development beyond single-family housing is the most important first step, according to NAHB’s Julian. But the journey doesn’t end there.
“Jurisdictions are increasingly recognizing that zoning capacity alone does not translate into housing production without administrative certainty,” Julian said.
More cities are allowing and even incentivizing residents to build accessory dwelling units, smaller secondary units on the same property as a primary unit. Efforts to convert former office buildings, schools and hotels into housing and to permit apartments in previously nonresidential zones are also accelerating.
Changing building codes to allow some multifamily homes to be built with a single staircase instead of the often-required two staircases is also gaining traction in cities and states.
“Across the country, local and state governments are adopting by-right approvals, enforceable review timelines and objective design standards to reduce entitlement risk, shorten timelines and lower soft costs,” Julian said.
Time and capacity remain major challenges when it comes to zoning and regulatory changes because cities are often understaffed, said NLC’s Lowery. Federal proposals like the Senate ROAD to Housing Act and Housing for the 21st Century Act could be critical resources for supporting city efforts, she added.
“Without sustained federal and state partnership — particularly around infrastructure investment and capacity-building — even well-designed zoning reforms may fall short of meeting the scale and urgency of today’s housing needs,” Lowery said.
Building support for reform
Liu said city planners need three elements to make headway with housing reforms: champions, such as policymakers on the city council, who advocate for the changes; supportive staff across multiple departments; and an outside coalition that sees the vision.
"When you are proposing and get attacked by your NIMBYs, these are the ones who come up and defend you,” Liu said.
Despite the progress made in 2025, Liu said Dallas has just gotten started in making regulatory changes to spur housing, Liu said.
The city’s zoning code has not gone through a comprehensive update in nearly 40 years, according to a report from the Planning and Development Department. That will likely change in 2026 as the city continues its efforts to boost its housing supply.
“In 2026, we expect cities to continue pursuing zoning and regulatory changes that increase housing supply, alongside efforts to modernize how housing actually gets built,” including streamlining permitting through pre-approved plans and electronic plan review, Lowery said.
It will take time to see the full impact of 2025’s changes in Dallas, but Liu said she’s already seeing benefits. When a senior housing project in the city was permitted to expand without adding 200 more parking spaces — as would have been required before the reforms — it was able to save two trees that residents loved from being removed, Liu said.
“It's more than just more housing,” Liu said. “It also helps you add and preserve more humanity.”
