Cities across the U.S. are increasingly rethinking zoning rules, parking mandates and building codes as they search for ways to increase housing supply and address worsening affordability challenges that now extend well beyond coastal markets.
The housing crisis, driven by years of underbuilding and rising construction costs, has become a nationwide issue impacting cities of all sizes.
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“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.”
Following the Great Recession, the U.S. produced fewer single-family homes in the 2010s than in any decade since the 1960s. That prolonged slowdown has contributed to record-high home prices, declining rates of first-time homeownership and a surge in homelessness nationwide. In 2025, the median home price hit an all-time high, while the share of first-time buyers fell to a record low. The median age of first-time buyers also climbed to 40.
As a result, local governments are reassessing municipal regulations that housing advocates and builders argue have constrained development for decades. Longstanding zoning codes, parking requirements and permitting processes are now under renewed scrutiny as cities look for faster and more cost-effective paths to housing production.
Dallas has emerged as a prominent example of this shift. Despite being one of the nation’s leaders in new home permitting and sales, the city continues to face affordability and supply gaps.
According to the city’s 2024 housing action plan, 72% of renters with middle incomes were cost-burdened in 2022, and fewer than 20% of renters — those earning $100,000 or more — could afford a median-priced home. As of 2022, Dallas faced a shortage of nearly 40,000 rental homes affordable to households earning about 50% of the area median income, or roughly $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.
In response, Dallas moved in 2025 to loosen parking mandates and rewrite parts of its building code to reduce barriers to small multifamily construction.
“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.”
City officials found that parking mandates were closely tied to development costs and unit mix. Parking requirements were based on bedroom count, which Liu said made larger family-sized units more expensive to build.
“Those are very expensive,” Liu said of parking spaces. “They’re $60,000 to $80,000 per spot.”
As a result, developers largely favored one-bedroom units, with few three-bedroom options entering the market.
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Dallas updated its code to allow greater flexibility. Projects with 20 or fewer units now face no minimum parking requirement. Developments with 21 to 199 units require half a parking space per unit, while projects with 200 units or more require one space per unit, regardless of bedroom count.
“You’ve freed up the land for more housing,” Liu said. “You also significantly reduce the cost” of housing development.
The city also reframed how it communicated the changes to residents.
“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.’”
Similar parking reforms gained momentum last year in cities including Chicago and Baltimore.
Nicholas Julian, director of land use at the National Association of Home Builders, said cities are now shifting focus from simply allowing more housing to ensuring projects are financially feasible.
“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.
Dallas also targeted building codes that officials said discouraged the construction of small multifamily housing, often referred to as “missing middle” homes. Previously, triplexes and small apartment buildings were regulated under the same code framework as high-rise structures.
A revised code now applies a modified version of the International Residential Code to buildings with up to eight units and three stories, reducing regulatory burdens and eliminating the requirement for sprinkler systems while maintaining fire safety through fire walls.
“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.”
Research from Harvard University’s Joint Center for Housing Studies has found that such code requirements can significantly raise costs and limit missing middle housing production. Dallas drew inspiration from similar reforms in Memphis, Tennessee, where officials have worked to modernize building standards.
National League of Cities Housing and Community Development Director Lauren Lowery expects zoning and regulatory changes to accelerate in 2026, particularly when aligned with broader systems such as infrastructure investment and permitting capacity.
“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.”
Experts caution that zoning reform alone will not solve the housing crisis.
“This is a challenging public policy where there is no one solution that will solve it,” Jordan said. “But locals have their hands on a lot of solutions.”
Cities are increasingly combining zoning changes with incentives for accessory dwelling units, office-to-housing conversions, by-right approvals and streamlined permitting processes. However, limited staffing and resources remain obstacles, particularly for smaller jurisdictions.
Federal proposals such as the Senate ROAD to Housing Act and the Housing for the 21st Century Act could help support local capacity-building efforts, Lowery said.
“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,” Lowery said.
While it may take years to fully measure the impact of Dallas’ reforms, Liu said early results suggest tangible benefits — including a senior housing project that avoided adding hundreds of parking spaces and preserved trees valued by residents.
“It’s more than just more housing,” Liu said. “It also helps you add and preserve more humanity.”
Originally reported by Ryan Kushner, Editor in Smart Cities Dive.
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