National report identifies proven strategies to make starter homes possible again

SAN DIEGO, Aug. 5, 2026 /PRNewswire/ — Casita Coalition today released a new report that identifies a practical, proven roadmap to bringing back starter homes across America.

The “Starter Home Strategies” report, developed with the Mercatus Center, provides a national policy guide outlining seven complementary reforms that state and local policymakers can adopt to make starter homes legal, financially viable, and easier to build.

The report draws lessons from communities across the country and outlines solutions that can benefit households from California and Oregon to Texas and New York.

Starter homes have nearly disappeared from new construction. Only 9% of new single-family detached homes built in 2024 were under 1,400 square feet, down from 40% in 1982, according to the report. Nationally, 75% of households cannot afford the median-priced home. In California, the figure is 85%.

Casita Coalition, a California-based nonprofit, unveiled its report in San Diego because the city has already adopted some of the featured approaches, including local rules allowing eligible ADUs to be sold separately from the primary home, while other strategies highlighted in the report, such as allowing middle-scale infill housing like townhomes, duplexes, and cottages in areas currently restricted to single-family zoning, are currently in process under the City’s Neighborhood Homes for All of Us initiative.

 “We are proud to champion diverse housing solutions that can be tailored to each state’s laws, land market and housing needs,” said Noerena Limon, CEO of Casita Coalition.

“Americans need more housing choices that reflect how people actually live and what they can afford,” said Mayor Todd Gloria. “Starter homes, townhomes, ADUs and other types of housing can create more attainable pathways to homeownership for working families and first-time buyers. In San Diego, we’ve worked aggressively to remove barriers to building these homes, and I’m proud our progress is helping provide a model for other communities. We need to give the next generation of San Diegans a real opportunity to own a home, build wealth and put down roots here.”

The report finds that the disappearance of starter homes is driven not just by the high cost of construction, but by a web of restrictive zoning rules, complex subdivision regulations, parking requirements, ownership restrictions, impact fees, financing barriers, and permitting practices that collectively make modest-sized homes difficult or impossible to build. Because many development costs are fixed regardless of home size, builders are often pushed toward larger, more expensive homes. Despite these challenges, communities across the U.S. have found successful strategies to increase production of lower-cost starter homes. This report details what had to change so these projects could be built, and how policymakers, planners and advocates can leverage these learnings to unlock starter homes in their own communities.

Casita Coalition’s report showcases examples of starter home strategies across the country that bring homeownership within reach by reducing the land cost of the home, lowering the cost of the home itself, or expanding the ways that homes can be owned. Many successful starter home initiatives use two or more of these main strategies to bring the cost of the home down even further.

 The report broadens the traditional definition of a starter home beyond a small detached house. It defines a starter home as any modest-sized home attainable to an average-income buyer, including small-lot homes, ADUs sold separately, duplexes, townhomes, cottage courts, manufactured housing, modular homes, and homes made possible through shared ownership models.

About Casita Coalition
Casita Coalition is a California-based nonprofit organization advancing practical solutions to the housing shortage through middle housing, including accessory dwelling units (ADUs), starter homes, manufactured housing, modular housing, townhomes, and other housing types that expand attainable homeownership and increase housing supply.

Media contact:
susanav@svprcommunications.com

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SOURCE Casita Coalition