Forty-six states will convene legislative sessions in 2026 and many of these states are already in session. More than six weeks into the 2026 legislative session, CAI’s Government & Public Affairs team reports on notable trends in legislation beyond those predicted by CAI’s annual state legislative and policy trends survey.
Sunsetting Community Associations
The trendline has been clear for many years. By 2040, the community association housing model is expected to become the most common form of housing in the United States. Most new housing starts in the nation are in some form of association-governed community, and this has been true for the last 25 years.
Yet, in multiple states legislators have taken a somewhat novel approach to addressing community association issues by introducing bills that could potentially lead to a phase-out of the community association housing model in their states.
In Florida, Georgia, Hawaii, and Missouri legislation has been introduced or carried over establishing a process for HOAs to conduct a vote among the owners on whether to continue as a community association. In Arizona, legislation has been introduced mandating that community declarations and homeowner associations automatically expire and dissolve on Jan. 1, 2127, or 100 years after their original recording date. In Idaho, H 708 would automatically dissolve any homeowners association that has existed for 10 or more years from the date of its articles of incorporation or on July 1, 2029, whichever is later unless members vote to prevent dissolution.
What happens next should these bills become law and associations vote to sunset or dissolve?
Who takes ownership of miles of private roads should an association dissolve? What happens to the common property and who pays to cut the grass and maintain stormwater facilities? Municipal governments likely will not be thrilled if they are expected to take ownership of billions in common property, road maintenance and other essential services.
Restrictions on Corporate & Investor Purchases of Residential Real Estate
Sixteen states have introduced some version of legislation seeking to restrict or ban corporate and investor purchases of residential real estate: Arizona, California, Connecticut, Georgia, Hawaii, Illinois, Iowa, Kentucky, Minnesota, Missouri, New Jersey, New Mexico, Oklahoma, Vermont, Virginia, Washington state.
Many of these bills were introduced following the president’s executive order preventing large institutional investors from purchasing single-family homes in the United States. The order is intended to support housing affordability nationwide. The order also instructed the White House to prepare legislative recommendations for Congress to consider codifying the order so large institutional investors do not acquire single-family homes.
The reasons for this trend are likely rooted in housing market dynamics, affordability concerns, and political pressures as similar efforts continue to develop at the federal level.
Affordability concerns are likely the dominant reason for this trend as lawmakers argue that large corporate and institutional buyers compete directly with individual homebuyers, especially first-time and moderate-income buyers. Corporate investors often use cash offers and automated purchasing algorithms and have access to vast capital resources. These actions result in driving up prices and shrinking the supply of available homes. This competitive pressure is seen as contributing to higher home prices and making homeownership more difficult to achieve.
Proponents of these bills also argue that investor activity — particularly from institutional investors, private equity firms, and large LLCs — are distorting housing markets when they buy up a large share of homes. This activity causes tightening in the housing supply, which leads directly to increasing prices, especially in markets with already limited inventory.
Community associations should monitor these bills and evaluate their potential impact on the community association housing model. Many communities have expressed difficulty in tracking down corporate owners when it comes time to secure their vote for an annual meeting or achieve quorum. This legislation may help mitigate that problem.
Homebased Childcare
Home-based childcare is another issue gaining steam in various states as the demand for more childcare facilities grows across the nation. CAI recognizes the importance of balancing the growing need for quality childcare facilities with the fundamental right of community associations to self-govern. CAI’s public policy on residential childcare facilities, adopted in 2024, recognizes the right and the obligation of community associations to adopt reasonable rules and restrictions governing the presence of home-based childcare facilities that may otherwise interfere with or disrupt the quiet enjoyment and day-to-day living for community residents.
Legislation addressing home-based childcare facilities has been introduced in 2026 in Indiana, New Mexico, Rhode Island, Tennessee, and Vermont. When first introduced, CAI opposed New Mexico SB 96, which as initially written would have forced associations to accept the presence of home-based childcare facilities without preserving the association’s ability to adopt and enforce reasonable, uniformly applied rules addressing parking, traffic, common-area use, amenities, liability, insurance, and architectural standards. CAI advocates were able to successfully negotiate amendments, and the bill passed in New Mexico’s short, 30-day session with CAI’s support.
Legislation prohibiting community associations from banning the operation of licensed childcare facilities was passed by the legislature in Nevada during the 2025 session but was vetoed by the governor. In Kansas, legislation on home-based business was introduced in 2025 and carried over into 2026. The Kansas bill does not include a carve out for community associations, and CAI opposes this bill.
Accessory Dwelling Units
More than half of all states have new or carryover legislation to address the topic of accessory dwelling units: Arkansas, California, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kentucky, Massachusetts, Maine, Maryland, Minnesota, North Carolina, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, Washington state, Wisconsin and West Virginia. Review the legislation CAI is currently tracking regarding ADUs.
Again, housing affordability is likely driving this conversation given its status as one of the top domestic policy concerns nationwide. Housing continues to increase in cost for many Americans due to a shortage of housing in many states. One solution is to significantly increase housing. Many states and cities are working on these plans as housing costs dominate electoral conversations. However, large-scale housing construction takes significant time, often requiring years due to regulatory, financing, and construction constraints.
As a result, legislators are turning to ADUs as a near-term, incremental tool in the housing affordability conversation—especially as a complement to longer-term, large-scale housing production. Much of the legislation on this topic seeks to make permitting for ADUs faster and leverage existing land, utilities, and streets. ADUs also can be deployed lot-by-lot as opposed to waiting for major construction projects.
Community associations must be part of the conversation on ADUs as many of the bills introduced seek to overrule existing association covenants regulating this type of housing. CAI’s public policy on ADUs recognizes the need for affordable housing in the United States and supports the rights of residential common interest communities to reasonably regulate the development of accessory dwelling units within their communities.
According to the Foundation for Community Association Research, 86% of homeowners living in community associations rate their community association experience as very good, good, or neutral. CAI and state legislative action committees offer resources, education, and alternative policy solutions to state legislatures. In 2026, several CAI state LACs are organizing advocacy days at state capitals to advocate on behalf of community associations and educate lawmakers. Legislators respond to constituents, so consider attending if one is happening in your state capital.
Want to make an impact on these and other advocacy issues facing community associations? Sign up to become a CAI advocate and receive advocacy alert emails with easy ways for you to act.
Follow what’s happening in your state by visiting CAI’s real-time legislative tracking map at www.caionline.org/advocacy and subscribe to the CAI Advocacy Blog. Get involved with advocacy efforts in your state! Learn more about your state’s LAC here and find your local CAI chapter here.
Please contact CAI’s Government and Public Affairs team at government@caionline.org with any questions.
