Legislators Deliver Big Win to Address Indiana Housing Shortage

Hoosier lawmakers have passed a significant housing expansion bill this session in House Bill 1001, sponsored by Rep. Doug Miller.

States nationwide, including Indiana, have long faced high demand for housing with limited availability. This drives up costs for families, ultimately slowing economic growth and making it harder for employers to retain workers. House Bill 1001 addresses this directly by expanding the market’s capacity to build more housing, bringing supply in line with demand, improving our economy, and increasing affordability for all.

House Bill 1001 now requires governments to approve projects based on the zoning laws in place when the permit application is submitted, not when construction begins. This prevents new zoning laws from disrupting prior construction agreements. It also requires cities to review their current zoning laws and ease them where necessary to make room for more housing development. Finally, it prohibits local governments from adding extra fees on building approvals and permits, and mandates refunds of existing fees if approvals or permits are delayed.

Economists and policy experts Salim Furth, Emily Hamilton, and Charles Gardner from the Mercatus Center have found that rising housing costs are primarily caused by a lack of supply. When housing construction fails to keep pace with population and job growth, prices rise faster than wages or salaries. This hurts families, first-time homebuyers, and businesses alike. States with fewer zoning restrictions consistently show lower costs of living, stronger job growth, and greater economic growth overall (Housing Reform in the States: A Menu of Options for 2026).

These economists and policy experts have also identified the concrete steps that House Bill 1001 now puts into law. By limiting zoning restrictions and reining in control over building permits, the bill directly tackles the root causes of Indiana’s housing shortage. It blocks zoning laws that would make existing structures non-compliant — a critical protection, as many recently enacted zoning laws would have restricted buildings that were legally constructed years ago, making redevelopment far more difficult.

House Bill 1001 also establishes protections against downzoning. When new zoning restrictions are put in place, nearby land values can drop. These protections now require local governments to compensate property owners for that lost value, creating a strong financial incentive for governments to avoid imposing unnecessary zoning restrictions.

The bill further guarantees that zoning laws cannot change once a project has begun, giving developers the certainty they need to move forward with confidence. This security in their investments means more developers will take on new projects, directly increasing housing production across the state. The bill also cuts the cost of building approvals and permits and caps the fees local governments can charge for infrastructure, removing one of the most persistent barriers to new construction.

House Bill 1001 puts Indiana on a clear path to addressing its housing crisis. With more housing development now underway, supply will rise to meet demand, driving down the cost of living, strengthening the job market, and delivering meaningful, lasting improvements to Indiana’s economy.