What if the key to solving the housing crisis isn’t just more money? In Rhode Island, dozens of cities and towns are rewriting zoning codes, updating permitting rules, and planning for new development, not with sprawling staff or deep budgets, but with targeted technical assistance from the state to clear the path for more local housing.
It is just one of dozens of noteworthy programs and policies from across the country spotlighted in the latest report from ULI’s Terwilliger Center for Housing—Building the Future 2025: Transformative Trends in State, Local, and Federal Housing Policy. Even as national policy support becomes less predictable, many states and localities are hard at work developing pragmatic, scalable housing solutions.
Building upon the foundation laid by the 2024 edition, this updated report delves into the latest innovative strategies being employed by various states and municipalities to address the nation’s housing challenges. From Washington state’s Connecting Housing to Infrastructure program to expanded incentives for individual affordable homes in Chattanooga, Tennessee, the report showcases how common-sense initiatives—reforming tax policy, connecting development to transit, and leveraging public lands—can help meet the urgent demand for housing.
The report is structured around four key themes: reform, connect, leverage, and progress. Each highlights actionable policies and programs that have successfully boosted sustainable, affordable housing in their local communities.
Reform: fixing the foundations of housing production
To expand housing supply, local and state governments are overhauling outdated regulatory frameworks. Seattle adopted permitting reforms that improve speed and predictability, including fast-track approvals and design review waivers. Chattanooga, Tennessee, implemented its first zoning code overhaul in 60 years to support “missing middle” housing, expand by-right development, and reduce parking and lot size requirements.
States are also tackling the hidden costs of property taxation. In Tennessee, property assessments for Low Income Housing Tax Credit (LIHTC)-funded developments are now based on income rather than cost, reducing tax burdens on affordable units. California and Colorado have adopted exemptions that lower operating costs during development and preserve long-term affordability, while Texas and Washington, D.C., use PILOT (payment in lieu of taxes) agreements and public facility corporations to create better predictability for affordable housing operators.
Connect: coordinating systems for greater impact
Local and regional actors are working to better integrate housing developments with infrastructure and community priorities. Washington state’s Connecting Housing to Infrastructure Program (CHIP) has helped deliver more than 9,500 affordable homes by funding critical water, sewer, and stormwater improvements. Nashville, Tennessee’s Housing and Infrastructure Study has informed new zoning and capital investment strategies to align growth with public service capacity.
Recognizing that local governments often lack the tools to implement reforms, Rhode Island launched the Municipal Technical Assistance Program (MTAP). With grants and pre-qualified consultants, MTAP is enabling 38 cities and towns to modernize zoning and permitting systems.
At the federal level, HUD has begun a long-overdue data infrastructure overhaul driven by laws like the Foundations for Evidence-Based Policymaking Act (2019) and the Federal Data Strategy. New tools such as the Enterprise Analytics Platform and FHA Catalyst are streamlining reporting and oversight. The Housing Information Portal and Open Data initiatives promise improved access for local governments and the public.
Leverage: scaling up housing through innovation and investmentTo accelerate production of critical housing, states are becoming more innovative in unlocking new funding sources. Tennessee and Georgia now offer state-level LIHTC programs that match federal credits, while Michigan launched a TIF (tax increment financing) program that reinvests future property tax gains into project costs. These and other strategies are making development feasible in areas where traditional financing models fall short.
A number of cities are piloting creative pathways to enable more home ownership. In Philadelphia, the Turn the Key program provides deeply subsidized homes on public land with down payment assistance. Minneapolis uses lease-purchase models to help renters build equity, while the state of Rhode Island offers gap financing to developers to produce deed-restricted, for-sale housing.
To meet a broader range of needs, jurisdictions are embracing compact and shared-living models. Oregon legalized single-room occupancy units statewide, and Washington state passed legislation supporting co-living housing. Seattle has followed, with reforms that legalize congregate housing in all multifamily zones.
Some states are also exploring public development models. Rhode Island’s proposed revolving fund would finance mixed-income housing on public land. Utah’s Homes Investment Program leverages transportation funding to offer low-interest loans for attainable ownership units.
Finally, modular construction is gaining momentum as a cost-saving, scalable solution. Boston and Denver are investing in regional modular housing hubs, while private developers such as Greystar are launching modular-focused subsidiaries. Red Rocks Rising in Denver is another example of combining modular methods with high-efficiency design to deliver climate-smart housing at scale.
Progress: tracking policy implementations and outcomesWhat has happened since last year’s Building the Future? The implementations and outcomes of several state and local initiatives that were featured in the 2024 edition are also profiled in this year’s report.
In Massachusetts, implementation of the MBTA (Massachusetts Bay Transportation Authority) Communities law is moving forward with dozens of cities and towns adopting new zoning plans to allow multifamily housing near transit. This legislation, which requires communities served by the MBTA to create at least one zoning district that permits multifamily housing by right, has begun to shift local land use patterns toward greater density and transit access.
Florida’s Live Local Act has sparked a new wave of mixed-income development by allowing housing in commercial zones and offering tax incentives for affordability. Developers are responding with adaptive reuse and infill projects that align with the law’s flexible land use provisions and streamlined approval processes.
New York’s Pro-Housing Communities program is offering state-level funding incentives to municipalities that adopt pro-housing policies, including rezoning and expedited permitting. Cities and towns that earn the designation gain access to additional infrastructure and planning resources, reinforcing a strong link between housing policy and investment.
In Atlanta, the Affordable Housing Strike Force has accelerated housing production by coordinating agencies, streamlining approvals, and targeting public land for mixed-income development. This initiative has already facilitated thousands of new units and helped unlock underused sites for housing.
Meanwhile, ADU (accessory dwelling unit) “condo-ization” is emerging as a promising tool to expand home ownership. In California and other jurisdictions, new legislation enables accessory dwelling units to be subdivided and sold as separate condominiums—offering an entry point to ownership and increasing the financial viability of ADU construction.
Building the Future 2025 serves as a vital resource for policymakers, urban planners, and housing advocates seeking to understand and implement effective housing strategies. As the federal policy landscape shifts and core housing programs face renewed scrutiny, the road ahead will depend heavily on continued innovation, investment, and leadership at the state and local levels. By showcasing a range of innovative policies and providing insights into their practical applications, this year’s edition of Building the Future offers proven, real-world solutions to address the complex challenges of housing affordability and availability in the United States.
The full publication is available for ULI members to download at uli.org/terwilliger.
