Utah lawmakers opened their 2026 legislative agenda with a proposal to revive a once-fixed part of the American dream of homeownership: starter homes. By streamlining permit approvals and rezoning smaller lots, Beehive State lawmakers will look to pave a path to first-time homeownership.
The bill would reduce minimum lot sizes to encourage the construction of starter homes and improve problematic housing affordability statewide. The new measure comes a year after Utah Governor Spencer Cox set a goal of building 35,000 starter homes by the end of 2028, and builds on a series of housing reforms signed into law last year.
“We desperately need more access points to ownership, not just more units on a spreadsheet,” said Patrick Risk, a Salt Lake City real estate agent with Northmarq, in an interview with The builder’s newspaper.
If efforts in other states on starter housing are any indication of the likelihood of success, a bill in Utah faces a challenging road ahead. Across the country, state legislatures have tried reforms to the “starter home” or minimum lot size, but to little effect.
Texas and Maine are the only two states that have lowered minimum lot sizes as a basis for encouraging the development of smaller – perhaps starter – homes. Maine went to 5,000 square feet, while Texas lawmakers settled for 3,000 square feet. The Lone Star State’s sponsors originally sought 1,400 square feet, in line with what Houston has had for decades.
Non-starter state efforts
Arizona’s recent history in this area shows how futile such efforts can be. The Arizona Starter Homes Act has failed two years in a row. Gov. Katie Hobbs vetoed the bill in 2024, and the effort stalled last year due to opposition from the League of Arizona Cities and Towns. Such organizations tend to oppose housing reforms, especially if they involve preemption over local zoning authorities. The Arizona bill aimed to eliminate local rules on minimum lot size in new subdivisions and require larger cities to allow lots of only 1,500 to 3,000 square feet.
For Utah lawmakers, the lackluster track record of success shows that starter home bills spark strong reactions in the city and turn relatively innocuous zoning changes into crippling housing fraud.
The increase in the state’s population meets the challenge of housing affordability
Job and population growth in Utah has been strong since 2010, making it one of the fastest growing states in the country. Gardner Policy Institute at the University of Utah estimated in November it emerged that the state is on track to add another two million people over the next four decades.
However, with this growth, housing affordability has become problematic.
“Housing affordability continued to challenge new buyers as Utah homeownership rates fell to their lowest levels in decades,” the Institute said in its annual economic report. report to the governor. The Institute identified high housing costs as a potential economic risk. The report noted that Utah’s housing market showed modest growth, with home prices rising just 2%. That increase was slower than both inflation and income growth.
Still, affordability remains a major hurdle for first-time buyers, and the state’s homeownership rate has reached its lowest level in decades. The report ranked Utah 30th nationally in homeownership.
Finding solutions for housing affordability
Utah officials estimated during a recent strategic planning process that the state will need 274,000 new housing units by 2033 to meet demand. That estimate underlines the scale of the challenge. Governor Cox’s goal is 150,000 homes by the end of 2028, including 35,000 starter homes.
That’s where House Bill 184, called Local Land Use Revisions, comes into the mix. It would allow homes on smaller lots than current zoning laws in Utah cities. Builders would seek permission to build on smaller plots. The bill would give local governments 30 days to respond to these requests or they would be automatically approved.
Utah lawmakers made housing a top priority in 2025, passing a bill that strengthened housing regulations for moderate incomes. HB 37 allows cities and counties to allow the development of higher-density single-family homes in exchange for affordability and tenure guarantees. It gives local governments the flexibility to adopt compact neighborhood designs that promote homeownership and expand housing choice across income levels.
Developers can earn density bonuses by meeting specific affordability and size requirements associated with long-term community investments. These requirements include allowing deed restrictions to require at least 60% of the units to be owner occupied for five years. Another requirement is that 25% of the units must be affordable to households earning up to 120% of the county median income. Or at least 25% of the units must be smaller than 1,600 square feet.
Supporters said the bill balances growth and affordability by encouraging mixed-income neighborhoods without changing the existing character of the community. The law connects all this to previous first home and infill instruments. It encourages new housing near public transport, employment centers and shopping areas. Lawmakers said the goal is more homes in smart locations, not endless sprawl.
Other bills from 2025 played a smaller role. One bill adjusted the rules for “homeownership promotional zones” and how they spend revenue. Another bill adjusted land use and development procedures that determine how projects move forward.
Reducing friction to build more houses
Utah’s approach to housing reform aligns with similar efforts in neighboring states and across the country. For example, Colorado has passed a slew of laws to accelerate housing construction and allow more housing types to improve affordability.
“The focus on the flexibility of lot size and the definitions of starter homes is the right direction,” says land agent Patrick Risk. His concern is whether the bill achieves the goal of increasing the number of starter homes or shifts decision-making without addressing the full cost of construction. Land, impact fees, financing and infrastructure are still important. “If these do not move in parallel, we risk passing a bill that sounds bold but does not meaningfully change outcomes on the ground,” he said.
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