Editor’s Note: The RISMedia series, Legislative Round-Up looks at pending and passed federal and state-level legislation that impacts real estate professionals.
As a new year and new presidential administration begins, the real estate industry is uncertain of what shape the housing market will take in the coming weeks.
Many real estate professionals welcome the Trump administration’s expected regulatory rollback. Scott Turner, the nominee to lead the Department of Housing and Urban Development (HUD), said during his confirmation hearing that regulatory reform would be a top priority if he is confirmed, specifically citing intent to encourage the loosening of permitting and zoning at the state and local levels.
At the same time, economists have cautioned that proposed tariffs could be inflationary, and homebuilders have expressed worry that increased immigration enforcement could cut into the construction workforce.
One of President Trump’s day one executive orders directs all federal agencies to work to deliver “emergency price relief” to Americans, which includes “lower(ing) the cost of housing and expand(ing) housing supply.” The order does not give specific instructions on how to achieve these goals, but it does attribute “historically high (home) prices” in part to “regulatory requirements that alone account for 25% of the cost of constructing a new home.”
The order attracted praise from the National Association of Home Builders (NAHB). NAHB Chairman Carl Harris said in a statement that “President Trump understands that America is facing a housing affordability crisis, and the only way out of this crisis is to remove barriers like unnecessary and costly regulations that are raising housing costs and preventing builders from building more attainable, affordable housing.”
Trump’s other big-picture proposals for housing include ending the government conservatorship of mortgage lenders Fannie Mae and Freddie Mac and opening up certain federal lands for sale and, in turn, development.
With many of those federal initiatives likely to take some time, local and statewide initiatives can slip through the cracks without your notice. What recent housing policies coming out of state legislatures and governor’s offices should real estate professionals be aware of?
Faced with destructive wildfires, California prepares to rebuild
This year has already seen Los Angeles beset by wildfires. The destruction has left many homes destroyed and their owners displaced. LA brokers who spoke to RISMedia expressed both distress by the damage but also a resolve to rebuild from it.
On January 7, the first day of the fires, California Governor Gavin Newsom declared a state of emergency. As a result, the California Department of Insurance issued a mandatory one-year moratorium on home insurance non-renewals and cancellations for the affected areas on January 9. The moratorium was expanded to include additional zip codes on January 15.
This action is allowed under a law, passed in 2018, which states that:
“An insurer shall not cancel or refuse to renew a policy of residential property insurance for a property located in any zip code Code within or adjacent to the fire perimeter, for one year after the declaration of a state of emergency as defined in Section 8558 of the Government Code, based solely on the fact that the insured structure is located in an area in which a wildfire has occurred. This prohibition applies to all policies of residential property insurance in effect at the time of the declared emergency.”
On January 12, Newsom signed an executive order to better spur reconstruction efforts in Los Angeles. The order suspends certain environmental permitting requirements for reconstruction of damaged Los Angeles properties and enacts protections (valid until Jan. 7, 2026) against the price-gouging of building materials, storage and construction services. The order further directs California state agencies to identify other permitting requirements to be waived or streamlined in reconstruction efforts.
The California Association of REALTORS® (C.A.R.) supported both the insurance cancellation moratorium and Newsom’s executive order, saying in a statement that the moratorium will help “stabilize availability” of home insurance and that it is working alongside California legislators to find further solutions.
In a January 14 press release on Newsom’s executive order, C.A.R. President and Palm Springs-based REALTOR® Heather Ozur encouraged that the order be extended to new construction within Los Angeles, citing the “very limited housing availability” within the city.
“The fires have displaced many people who will need housing,” she said. “It will be essential to get new housing built, which streamlining measures will allow.”
A recent study by the Harvard Joint Center for Housing Studies reported that state-backed insurance plans across the country, known as Fair Access to Insurance Requirements (FAIR), now insure over $1 trillion worth of properties.
In California, a statewide bill introduced on January 9 would give the California FAIR Plan Association the power to request the California Infrastructure and Economic Development Bank issue bonds for financing the cost of insurance claims. This legislation is also supported by C.A.R., who’ve praised its intent to “alleviate uncertainty for FAIR Plan policyholders.”
Massachusetts’ housing reform bill revises zoning restrictions and home inspection process
In August 2024, Massachusetts passed the “Affordable Homes Act,” a comprehensive bill designed to address housing affordability. Some provisions of the law have or will only take effect in 2025.
Come February 2025, “accessory units” under 900 square feet will be permitted to be built on single-family zoning areas in Massachusetts. The units can be built both separately or attached to a larger unit. This provision of the bill was supported by the Massachusetts Association of REALTORS® (MAR), along with the removal of the “presumption of adjacent lot joinder” rule (to spur more infill housing construction) and tax credits for the renovation of commercial buildings into residential units.
The Affordable Homes Act was also supported by the Home Builders & Remodelers Association of Massachusetts (HBRAMA).
The law also tasks the Massachusetts Executive Office of Housing and Livable Communities with creating new regulations surrounding the right to a home inspection. The exact regulations are currently set to be finalized by July 15, 2025. What is stated in the existing language of the Affordable Homes Act is that sellers and seller agents will not be able to condition acceptance of a buyer’s offer on them waiving the right to a home inspection, nor can a seller and their agent accept an offer if a buyer indicates in advance they would waive the right to inspection.
Lamacchia Realty, headquartered in Massachusetts, noted the “many unanswered questions” around the new inspection regulations in a release, but also concluded that “(t)aken together, the two components (in the Affordable Homes Act) are clearly intended to give more negotiating power to buyers, but it stops short of creating an explicit right to a home inspection.”
The MAR, which had previously pushed for a veto of “language mandating home inspection contingencies in real estate contracts” in the Affordable Homes Act, said in August that it is, “involved in the regulatory process and will promulgate any recommended practice and forms changes once regulations are finalized.”
Connecticut’s “Work, Live, Ride” housing supply bill could see another round in the ring
A 2024 state-to-state migration report by the National Association of REALTORS® (NAR) found that of the four major U.S. census regions, the least number of people are moving to the Northeast. Of those that are, job requirements were a commonly cited reason, with 26% of Northeast movers saying commute was important to their housing choice—though only 5% said proximity to public transit was a factor.
During the previous 2024 legislative session, the Connecticut legislature considered a bill dubbed “Work, Live, Ride” that would prioritize state funds to towns that build housing near public transit, in hopes of creating denser and more walkable communities. The bill was passed by the CT House in May 2024, but did not pass the Senate. This was attributed to concerns by Republican lawmakers about “top-down” legislation.
During the bill’s legislative process in 2024, Republican State Representative Joe Zullo described “Work, Live, Ride” as “another step in the erosion of local control and the zoning rights of municipalities across the state.”
Despite its previous defeat, Peter Harrison, the Connecticut director of the Regional Plan Association housing nonprofit and a supporter of Work, Live Ride, told the CT Post that he expects “Work, Live, Ride” to garner support again in 2025.
At press time, the “Work, Live, Ride” has not been reintroduced in the Connecticut legislature.
Sales tax increase for affordable housing fails in Denver
A unique way to fund affordable housing—supported by the local REALTOR® community—did not make it across the finish line in Denver, Colorado. Ballot Issue 2R, which would have funded affordable housing initiatives by raising the city sales tax by 5 cents for every $10 spent, was narrowly defeated.
Proposed by Denver Mayor Mike Johnston, the tax was estimated to generate $100 million in revenue per year, with city officials claiming that could in turn see 40,000 new affordable units built over the next decade. Opposition to the proposal came in criticisms that the tax increase would contribute negatively to cost of living for most city residents.
The ballot measure and increased sales tax was supported by the Denver Metro Association of REALTORS® (DMAR). A voting guide sheet created by DMAR for its members encouraged them to vote yes on Issue 2R. However, Issue 2R was ultimately defeated, with 50.5% of voters opposing it and 49.5% approving it.
North Dakota fails to abolish (most) property tax
Not all 2024 housing ballot initiatives were directly related to unit construction. North Dakota faced the statewide Measure 4, which would amend the state constitution to “prohibit political subdivisions from levying any tax on the assessed value of real or personal property, except for the payment of bonded indebtedness incurred through a certain date, and would require the state to provide replacement payments to political subdivisions of no less than the current real property tax levies.”
In effect, the measure would have banned property taxes in the state of North Dakota. However, come November, Measure 4 was handily rejected, with 63.5% voting against it and 36.5% supporting it.
“The property tax in North Dakota could stand to be reformed, but getting rid of it entirely could create bigger problems than property owners currently face,” said Realtor.com® Chief Economist Danielle Hale, who had noted the lost revenue from property taxes (estimated at $3.15 billion in the next two years) could negatively impact homeowners via loss of funding for public services such as schools, parks and road maintenance, or the introduction of other taxes to make up the funding gap.
Despite the measure’s defeat, the desire for property tax reform in North Dakota remains. The state’s Governor, Kelly Armstrong, elected in 2024, has put forward a proposal to “eventually end” property taxes for a majority of residents by drawing on the state’s general fund (and its $11.5 billion in savings from its local oil tax) to increase the offerings of local property tax credits.
