The housing ballot initiatives to watch in the 2026 midterm elections

Happy Tuesday, and welcome to another edition of Rent Free.

Today, voters (who didn’t vote early or vote by mail, at least) will go to the polls to pick their national, state, and local elected officials and decide a long list of ballot initiatives.

Most of the focus of midterm commentary has obviously been on whether Democrats will take the Senate. Given the limited influence that the federal government has on housing policy, that question doesn’t really concern this newsletter that much.

In several states, however, there are a number of ballot initiatives that would directly impact the price and quantity of housing supplied.

In Massachusetts, we have a rare example of zoning reform being put directly to voters in the form of Question 7, which would shrink minimum lot sizes across the state.

In California, voters will decide whether they want to significantly streamline the state’s growth-strangling environmental review law.

And in Florida, they’ll have a chance to vote for a massive property tax rollback that might shrink the size of government while almost certainly raising home prices for new buyers.

Minimizing Minimum Lot Sizes in Massachusetts 

Today, Massachusetts voters will decide Question 7. If approved, the initiative would allow single-family homes to be built on lots as small as 5,000 square feet statewide, provided the lot in question has 50 feet of land bordering a street and is serviced by sewer and water.

Shrinking minimum lot sizes has become a focus of YIMBY reformers, who argue that requiring homes to sit on less land will enable builders to build more inherently affordable “starter homes.”

That’s the pitch from the “yes” campaign, which has billed Question 7 as legalizing starter homes.

“Requiring huge lot sizes to build a single-family home makes houses expensive, reduces construction of new single-family housing, and encourages developers to build giant McMansions to recoup land costs,” reads the ballot statement provided by the “yes” campaign.

On the one hand, a 5,000-square-foot minimum lot size is still pretty big. By comparison, Texas’ 2025 starter home law capped minimum lot sizes at 3,000 square feet. Idaho’s 2026 legislation capped minimum lot sizes at 1,500 square feet.

On the other hand, both Texas and Idaho’s reforms apply only to new subdivisions in larger communities. Massachusetts’ law would apply to existing residential land statewide. In other words, it’s a more modest reform applied to more properties.

In a state known for large lot sizes, a 5,000 square foot cap would be a significant reduction. As Americans for Prosperity’s Illana Blumsack notes in a recent piece on Question 7, 56 percent of land zoned for single-family use in Massachusetts has a minimum lot size of at least one acre (or 43,560 square feet).

The campaign estimates that between 2,200 and 5,700 additional homes would be built each year in the state if Question 7 passes. Massachusetts built just under 12,500 homes in 2025, per the U.S. Census Bureau’s building permit tracker. Even the campaign’s low-end estimate would be a significant increase in housing production.

Whether that’s something Massachusetts voters actually want remains to be seen.

In recent years, the state’s Legislature has taken a few stabs at getting home production up. In 2021, it passed the MBTA Communities Law, which requires localities serviced by transit to create new zoning districts in which apartments are permitted.

In 2024, the Legislature also approved a sprawling housing law that included a policy allowing accessory dwelling units (ADUs) on all lots where single-family housing is already allowed.

Both policies have faced considerable local pushback. The state’s attorney general has repeatedly had to sue communities to enforce the MBTA Communities Law. Even some (relatively) pro-housing jurisdictions are balking at what they consider overly aggressive implementation of the ADU law.

At the same time, zoning reformers view the Legislature’s actions thus far as much too limited to actually end the state’s housing crisis. Taking the issue directly to voters offers the chance to route around lawmakers’ small-c conservatism on the issue.

“We have a legislature that, in my opinion, has not gotten things to the finish line on zoning reform,” Andrew Mikula, one of the lead organizers behind the initiative, told Reason back in January.

Rarely have questions of zoning reform been put directly to voters. The fate of Question 7 will provide a good test case of whether the people are more pro-housing than their elected representatives.

The two most recent polls of state voters don’t provide much guidance on this latter question.

The Suffolk University and Boston Globe poll from mid-October had support for Question 7 evenly split, with 41 percent of respondents supporting it, 41 percent opposing, and 16 percent undecided.

Another survey conducted around the same time by the University of Massachusetts Lowell and YouGov found 53 percent of respondents supporting Question 7, 31 percent opposing it, and 16 percent again undecided.

I guess we’ll have to wait until later tonight to find out what voters actually want.

The End of CEQA as We Know It? 

On the other side of the country, we have another case of land use reform questions normally dealt with by the legislature being put directly to voters.

The California ballot includes Proposition 45, which would dramatically reform the California Environmental Quality Act (CEQA).

For decades, CEQA has required public agencies to study the environmental impact of projects they have some discretion over. The law also enables third parties to sue when they believe an agency has approved a project without conducting a thorough enough environmental review.

That might all sound simple enough. But court decisions vastly expanding both what counts as a project under CEQA and the kinds of environmental impacts that need to be studied have made the law’s scope vast and unpredictable.

Everything from private housing projects to the size of public college student bodies has been considered projects requiring CEQA review and subject to CEQA litigation.

The end result is that countless activities have become bogged down in years of CEQA studies, only to then be sued by opponents.

The law has enabled a cynical shakedown racket whereby special interests with no real environmental objections to a project will threaten to delay it with CEQA litigation unless the sponsor provides some sought-after concession, be that a promise to hire union labor or a literal cash payment.

The problems caused by CEQA are not a secret. The California Legislature responded in recent years by excluding various categories of projects from the reach of the law while leaving the basic structure of the law unchanged.

Last year, the Legislature passed A.B. 130, which exempts “infill housing” from the need to go through the CEQA process.

CEQA’s critics nevertheless argue that the law needs more fundamental reform to streamline approval of a much longer list of projects.

Enter Prop. 45. Primarily sponsored by the California Chamber of Commerce and supported by a wide variety of developers, builders, and business groups, the initiative would create a greatly streamlined CEQA process that project sponsors could opt into.

This process would give agencies strict shot clocks for completing CEQA reviews. It would limit the scope of these reviews to checking whether a project complies with “objective,” “quantifiable” environmental regulations.

Prop. 45 would also make it far harder for project opponents to successfully challenge in court projects approved by this streamlined process.

A wide variety of “essential” projects would qualify for this streamlined process, including highways, power plants, housing, and water infrastructure.

This would be a remarkable scaling back of the law.

Changing what is currently an amorphous “study everything” law into a checklist of regulatory compliance “would be a huge change,” Christopher Elmendorf, a law professor at the University of California, Davis, told Reason back in May. “Basically it ends CEQA in anything like the form we’ve known it.”

Revolutionary changes to CEQA have split the voting public.

The latest polling by the Public Policy Institute of California showed 46 percent of respondents voting in support of Prop. 45 and 50 percent opposed. Another 4 percent were undecided.

A recent CalMatters story highlighted how the initiative was also dividing the state’s YIMBY coalition, which has been in unified support of paring back CEQA’s burden for infill housing and public transportation infrastructure.

Some pro-housing groups are supporting it as an essential means of expediting both greenfield development and the infrastructure necessary to support it. Anti-“sprawl” groups are dead set against it.

The measure is “a doubling down on essentially 75 years of land-use patterns that we know haven’t worked,” Jordan Grimes, legislative director with Greenbelt Alliance, which opposes the measure, told CalMatters.

California YIMBY and YIMBY Action, the state’s two primary YIMBY groups, both took no position on Prop. 45.

This divide in the pro-housing world on the question of exurban development isn’t new. See, for instance, the political split a few years ago over the ultimately failed A.B. 68, which would have streamlined urban infill development while making greenfield development much more difficult.

The state’s homebuilders argued at the time that roughly one-third of California’s yearly homebuilding was occurring in exurban areas. A.B. 68 thus threatened to greatly reduce total homebuilding.

The arguments over Prop. 45 are the mirror image of this debate. It would potentially allow a lot more greenfield development, and some “pro-housing” groups don’t like that.

Sunsetting Property Taxes in the Sunshine State 

The country is in the grips of a property tax revolt, and that revolt has made its way onto the ballot in Florida.

There, voters will consider Amendment 3, which would lower the homestead tax exemption for nonschool property taxes and reduce how much taxable assessed home values can rise each year.  

Homeowners would have to live in the state for at least five years before they could claim the full value of the lowered tax exemption. Amendment 3 would also limit the kinds of services that property tax revenues could be spent on.

The liberal-leaning Florida Policy Institute estimates that Amendment 3 will reduce local property tax revenues by $12 billion a year.

Property tax rollbacks can be a tricky issue for libertarians to parse. Even if you don’t think taxation is theft, they are inefficient and a drag on economic growth. Lowering tax burdens would presumably raise economic activity.

On the other hand, property taxes are generally considered the least burdensome tax on economic growth. To the degree they pay for local services that homeowners consume, they are more akin to a user fee than a proper tax.

The wisdom of a property tax cut then comes down to how local governments respond to the lost revenue and the design of the tax cut itself.

If Florida localities respond to the lost revenue by cutting spending, then Amendment 3 would result in a general shrinking of government in the Sunshine State. If they respond by hiking sales taxes or demanding more state financial aid, the result would be the same-sized government, more inefficient taxes, and greater fiscal centralization. None of those outcomes would be ideal.

The impact of property tax cuts on housing affordability and housing supply is also mixed.

Property tax cuts make it cheaper to own a home, as the recurring tax bill is lower. They also make it more expensive to buy a home, because the value of the property tax cut is capitalized in the sale price.

Florida’s Amendment 3 would further discriminate against new homebuyers by offering smaller tax exemptions to recent arrivals in the state. Someone moving to Florida after Amendment 3 passes would almost certainly end up paying more for a home than if the amendment fails.

On the supply front, the higher sale prices created by lower property taxes would presumably encourage builders to construct more homes. On the other hand, local governments engaging in “fiscal zoning” would be encouraged to restrict residential development in favor of other forms of development that would yield higher property taxes.

If Amendment 3 does pass, it’ll be a while before we can tell if the initiative leads to smaller government or merely a more generous welfare state for incumbent homeowners.

Quick Links

• Do you love city-building games where you don’t get to build anything? Then Discretionary Review, the simulator of San Francisco’s entitlement process, is the game for you.
• The North Carolina Supreme Court has declined to hear a Winston-Salem animal sanctuary’s challenge to zoning restrictions that effectively prohibited its operation. Read Reason‘s past coverage of the case here and here.
• The United States Court of Appeals for the 10th Circuit ruled in favor of a Salina, Kansas, burger joint’s First Amendment right to paint a burger-themed mural on its building. Read Reason‘s past coverage of the case here and here.
• The Trump administration has created a new dashboard to measure the performance of the country’s public housing authorities.
• Fannie Mae and Freddie Mac are tightening lending standards for New York rent-stabilized buildings following the imposition of the rent freeze.