Lawmakers returned to St. Paul on Feb. 17 for the second year of the biennium, kicking off a compressed 2026 legislative session shaped by election-year urgency and narrow partisan margins. All legislative seats will be on the ballot in November—a dynamic that historically favors targeted, bipartisan proposals with clear constituent impact.
The Minnesota House remains evenly divided at 67–67, while the Senate holds a slim DFL majority. In that environment, housing policy—particularly reforms aimed at increasing supply without new state spending—is positioned as a top-tier issue.
Minnesota’s ongoing housing shortage, rising home prices, and regulatory constraints dominated debate in 2025, and those pressures are expected to intensify in 2026. At the center of the discussion is the return of the Yes to Homes legislation, a framework designed to expand housing choices while allowing municipalities to determine where additional density makes sense in their community.
“As we head into the 2026 session, lawmakers need to hear clearly that every dollar added in fees, mandates, or delays is a dollar taken away from a Minnesota family’s ability to own a home,” said Mark Foster, vice president of legislative & political affairs at Housing First Minnesota. “The Yes to Homes framework is about removing artificial barriers while still respecting local planning and infrastructure realities.”
What’s in the 2026 Yes to Homes proposal
The 2026 Yes to Homes bill builds on prior versions by pairing baseline statewide standards with local flexibility. Under the proposal, municipalities would designate a modest portion of residentially and commercially zoned districts where additional housing types and density are allowed, using existing administrative approval processes rather than discretionary reviews.
All municipalities, regardless of size, would be subject to several baseline provisions. These include allowing accessory dwelling units (ADUs) in all residential districts, prohibiting requirements that force the creation of homeowners associations, limiting certain aesthetic mandates, and preventing minimum lot-size requirements exceeding one-eighth of an acre for residential greenfield development.
Beyond those base items, the proposal uses a menu-based approach. Larger municipalities would select additional options to support housing supply, such as expanding the percentage of residential districts that allow up to four units per lot, increasing multifamily capacity in commercial districts, reducing or eliminating parking minimums, and offering building-size bonuses for workforce, affordable, or senior housing.
Importantly for builders, the proposal emphasizes feasibility. Municipalities would retain control over bulk standards such as setbacks, floor-area ratios, and height limits, but those standards could not be used to make the housing types being allowed impractical or impossible to build.
“There’s a big difference between allowing housing on paper and allowing housing that can actually be built,” Foster said. “This bill is structured to ensure that when communities say ‘yes’ to more homes, the rules don’t quietly say ‘no’ afterward.”
Starter homes and infrastructure realities
Starter homes, which are largely absent from Minnesota’s new-construction market, are expected to be a defining issue in the 2026 session. The Yes to Homes framework directly targets zoning and lot-size requirements that have constrained entry-level housing for decades, while explicitly recognizing infrastructure limits.
The proposal makes clear that additional housing cannot be forced in areas where infrastructure cannot support it, including floodplains, shorelands, and areas of critical environmental or historic concern. District selection is guided by proximity to transit, commercial centers, parks, and schools, with transparency requirements for how municipalities share their decisions publicly.
Unlike prior years, the 2026 session does not require passage of a full biennial budget, placing added emphasis on cost-neutral solutions. For the housing industry, that reality strengthens the case for zoning and land-use reforms that expand supply without relying on state subsidies.
After years of discussion, the message heading into the session is straightforward: Minnesota’s housing challenges are well documented. The 2026 Legislature will determine whether state policy finally aligns with that reality or continues to limit housing production through outdated rules.