old style city street with canal

Why State Land Use Reform Should Be a Priority Climate Lever for America

New analysis from RMI finds that by encouraging better-located, less car-dependent communities, we can solve the nationwide housing shortage while dramatically cutting pollution.

Solving the US carbon pollution problem requires much more efficient and equitable use of its urban and suburban land. This means, first and foremost, more housing production in less car-dependent places. There are many policies that can help realize this — including ending exclusionary zoning; deregulating and pricing parking; eliminating minimum lot sizes, unit sizes, and setback requirements; legalizing accessory dwelling units (ADUs); and building permitting reform.

RMI analysis shows enacting state-level land use reform to encourage compact development can reduce annual US pollution by 70 million tons of carbon dioxide equivalent in 2033. This projection, based on 2023 data, underscores the potential for significant impact within a decade. It would deliver more climate impact than half the country adopting California’s ambitious commitment to 100% zero-emission passenger vehicle sales by 2035. Here’s another way of looking at this: addressing America’s chronic housing shortage intelligently — by building more housing where people most need it — can deliver similar climate impact as the country’s most aspirational transportation decarbonization policy. How’s that for a two-for-one deal?

About one-half of the pollution reduction associated with increasing conveniently-located housing would come from reduced travel: cars burning less gas and consuming less electricity. One-third would come from reduced vehicle manufacturing and upstream oil production. The remainder would come from preservation of natural carbon sinks that would otherwise be lost to sprawl and more efficient, less material-intensive buildings.

The case for statewide land use reform as a climate action tool

Globally, urban sprawl is directly or indirectly responsible for one-third of all greenhouse gas (GHG) pollution but is generally overlooked as a major contributor to the climate crisis. It spurs longer travel distances, greater car dependency, more embodied carbon in the built environment, less efficient buildings, more land consumption, and increased loss of natural carbon sinks.

Efficient urban and suburban development is one of the most powerful levers for climate action — in addition to its importance in addressing our cumulative shortage of 4 million homes (this is the current shortfall based on decades of underbuilding — we might need to build as many as 16 million homes on top of that to keep up with ongoing growth over the next decade). Compact, mixed-use communities mean shorter travel distances, more physical activity and improved health outcomes, more housing affordability, less construction material, more energy-efficient buildings, and less land and water consumption.

However, many local and state land use regulations incentivize the opposite. While we don’t yet have a national census of municipal zoning, an estimated 80 to 90 percent of American cities’ developable land is zoned exclusively for detached single-family housing. And even where construction of other home types is allowed, other restrictions, lengthy permitting timelines, excessive infrastructure-related fees for anything other than single-family homes, or other onerous approvals add to project costs and decrease the likelihood of homes being built.

Many municipalities have reformed or are working to reform their land use policies, but action at the state level offers a faster path to bigger impact. It creates the opportunity to build broader coalitions and helps prevent local officials from getting bogged down in local political battles.

Analysis and findings: Land use reform could reduce as much pollution as our most ambitious vehicle electrification policies

To better understand how compact development can impact GHG emissions related to transportation, the built environment, and land systems change, we estimated the potential impact of climate-friendly land use policies for all US states with the exception of Alaska (due to limited data). Our methodology is available here.

This analysis adds to the growing body of research pointing to the necessity of a holistic approach to transportation system decarbonization. Previous RMI work has shown that even with 70 million electric vehicles (EVs) on the road by 2030 (we’re at 2.4 million today), the United States would still need a 20 percent reduction in per-capita vehicle miles traveled (VMT) to meet climate targets.

We considered emissions associated with new housing a decade from now, using (1) population growth forecasts and housing underproduction data to project new housing construction, and (2) a census block level dataset estimating residential vehicle miles traveled (VMT) to determine transportation emissions in each state under different housing development scenarios. The housing production estimate assumes that states eliminate their existing housing shortages and accommodate projected population growth. To estimate the impact of building housing in compact, walkable, and transit-oriented communities with low VMT, the analysis included two scenarios: a business-as-usual (BAU) case, and a compact development case. The compact development case is defined based on each state’s existing driving patterns and assumes that most of the new housing can be placed in the 10 percent of neighborhoods in each state that have the lowest VMT today. In other words, we don’t assume that Texans are going to drive like New Yorkers, but it is fair to assume they can drive like other Texans.

Exhibit 1. Total emissions avoided through reduced driving, vehicle lifecycle pollution avoidance, and other pollution avoidance.

We analyzed three categories of pollution avoidance from land use reform: (1) Direct pollution avoidance from less driving, (2) indirect vehicle lifecycle pollution avoidance, and (3) rougher estimates for pollution avoidance from non-transportation sectors. “Direct pollution avoidance” considers emissions from gasoline and electricity consumption from vehicle operation. “Indirect vehicle lifecycle pollution” factors in emissions from vehicle manufacturing and upstream fuel production, averaged per mile over vehicle lifetime. The “non-transportation sector” estimates consider pollution avoidance associated with improved building energy efficiency, less construction material (and its associated embodied carbon), and preservation of natural land sinks otherwise lost to sprawl.

Land use reform could help us achieve direct pollution avoidance of 31 million tons of CO2e per year in 2033 — equivalent to nearly 30 percent of the country being covered by California’s ZEV target (i.e., 100 percent of passenger vehicle sales are ZEVs by 2035). When also considering other vehicle lifecycle and non-transportation sector pollution, the 70 million tons of CO2e per year in avoided pollution would amount to 60 percent of the emissions reductions that would result from all states adopting California’s ZEV target.

Most states have opportunities to address their housing shortages by encouraging construction in convenient, well-connected, amenity-rich locations. The difference to people would be profound; on average in the compact development scenario, people living in the new housing would be able to drive 40 percent less than the average for their states under BAU (i.e., if that housing were built in less convenient locations). Some states — those with large housing shortages — could see an overall per capita VMT reduction of over 9 percent, averaged over both new and existing housing (whose residents’ driving patterns are assumed unchanged in this analysis).

The map below illustrates the emissions savings per capita from land use reforms that enable compact development and transportation efficiency.

Exhibit 2: Emissions savings per capita in 2033 by enacting land use reforms that enable compact development and transportation efficiency.

The largest opportunity for pollution reduction is in states with the biggest housing shortages and largest anticipated population growth. In Texas, Colorado, and North Dakota, where the housing shortage hovers around 20 percent, land use reform could reduce statewide per capita VMT by up to 9 percent compared to BAU, equating to around 400-800kg CO2 per capita per year.

Other states, such as California and Oregon, have big housing shortages but show more moderate per capita emissions reductions because of lower anticipated population growth and a current VMT per capita that is lower than the national average.

States like West Virginia, Vermont, and Mississippi have low housing underproduction and low expected growth, meaning less impact from housing policy-based interventions relative to other states.

Exhibit 4: Total emissions savings from comprehensive nationwide land use reforms.

The overall potential for pollution reduction is highest in regions with the largest populations, most driving, and the most need for housing. Texas, California, and Florida stand out, followed by Georgia, North Carolina, Colorado, Washington, and Arizona.

The benefits of land use reform extend beyond pollution reduction

While this analysis largely focuses on pollution reduction, it is critical to acknowledge the other far-reaching benefits land use reform offers. First and most obviously, it would help address America’s housing shortage — and help to do it equitably, encouraging housing construction near economic opportunity, amenities, and public transit instead of on the exurban periphery and with the increased transportation burden that would come with it. Building new housing in urban cores can reduce housing costs across metro areas, including in low-income neighborhoods.

Reducing land consumption would not only preserve carbon sinks and valuable farmland, but also wetlands, grasslands, and forests, which can provide resilience against wildfires or floods. This type of development, with its shared outdoor spaces instead of single-family lawns, also lowers water consumption — especially relevant for communities across the Sunbelt and western United States. (A study of water use in California found that single-family homes in the state have double the outdoor water use of multifamily homes).

What’s next?

Land use regulation has long been considered an exclusively local issue, ignoring the spillover effects of municipal decisions on the broader region, country, and world. When municipalities constrain the supply of critical housing through overregulation and exclusionary policies — such as setting parking space minimums and single-family zoning — development often has nowhere to go except to surrounding jurisdictions. This harmful domino effect of sprawl not only contributes to rising housing costs, but forces residents to rely on expensive personal vehicles for their daily errands and commutes, locking in costs for their families and transportation emissions for decades to come. Besides its impact on the transportation system, sprawl also means more embodied carbon in the built environment, less efficient buildings, loss of natural carbon sinks, more water stress, and more communities exposed to flood and wildfire risk.

NIMBYism — often hyperlocal in nature — represents a major challenge for local governments looking to reverse these policies, which is why statewide reform is critical. To overcome these barriers and address the challenge of distributed decision-making, a unified approach that blends policy innovation with broad-based cooperation is essential. While a complete rundown of required reforms is beyond the scope of this article, the Terner Center for Housing Innovation at UC Berkeley has a helpful report on the topic. (And it will also be a focus of future work at RMI.)

With federal agencies now encouraging land use and zoning reform policies, states that consider these solutions in their planning may have a competitive advantage in securing federal funding. States can coordinate regional land use development through legislative and agency action, and from Montana to Maine, we’re starting to see it happen. We need plenty more of it, and we need it fast.