The clock is ticking for Arkansas municipalities to overhaul their local zoning codes to comply with a new state law, effective Jan. 1, that aims to boost housing supply through accessory dwelling units.

The legislation, known as Act 313, mandates that all cities and towns permit these small, secondary homes on any residential lot with a new or existing single-family house, a move state leaders hope will unlock new housing options amid a persistent shortage.

With the law, which took effect on August 5, 2025, Arkansas joins the growing ranks of states trying to address a housing shortage. This is particularly true in Northwest Arkansas. The law represents a significant shift in state housing policy, stripping away local barriers that have long prevented or complicated the construction of ADUs.

The state's primary motivation was to address a growing housing affordability crisis by increasing the overall housing stock. By allowing homeowners to build "by-right"—without needing a special permit or public hearing—lawmakers aim to create a more flexible and responsive housing market.

ADUs present a practical solution to expand housing supply economically," Groundwork, a workforce housing organization for Northwest Arkansas, said in May after the law was signed.

Housing Challenges

While the law is statewide, housing availability problems have been more pronounced in Northwest Arkansas, one of the nation's 20 fastest-growing metro areas. Population growth outpaced home construction in recent years.

Northwest Arkansas is home to the corporate headquarters of two of the state's largest employers. Walmart, headquartered in Bentonville, employs over 54,700 Arkansans, making it the state's top employer. Tyson Foods, a poultry processing giant based in Springdale, is the state's second-largest employer.

Between 2019 and 2025, the median rent for multifamily housing increased by nearly 50%, and home prices jumped by 70.9%, according to a report from the Walton Family Foundation.

Our region is at an important juncture, requiring action to ensure affordable and accessible housing for all residents," Robert Burns, director of the foundation's Home Region Program, said in a statement when the report was released.

With the regional population projected to exceed one million by 2050, the report noted that the need for affordable options is becoming more urgent. A projected sharp decline in construction activity this year could further strain the market and intensify the existing housing challenges.

The surge in housing costs has exacerbated the region's affordable housing shortage. The deficit of rental units affordable to low-income households grew from 7,100 in 2019 to 9,300 in 2025.

Although the overall housing inventory in Northwest Arkansas has expanded, creating more options for some buyers, the market remains imbalanced. New construction has not consistently aligned with demand across all areas.

As of August, some cities, such as Centerton and Lowell, were considered oversupplied, while others, like Rogers, still faced a tight housing supply.

Getting with the Law

Several cities have already begun aligning their local ordinances with the state mandate. The city of Little Rock has been exceptionally proactive, launching a community survey in the summer of 2025 that found strong public support for ADUs.

In response, the city's Board of Directors adopted an interim ordinance Aug. 19 to provide a clear regulatory pathway for homeowners while permanent rules are developed.

Other municipalities are also moving forward. Bentonville and Prairie Grove are among the cities currently drafting amendments to their zoning codes to incorporate the new state requirements.

Lawmakers knew the law could spark resistance from municipalities.

We also understand it's not right to not have affordable homes for people," State Sen. Bart Hester, one of the main bill sponsors, told a local television station. "So we were kind of the bad guys here for a lot of cities. We're going to take it on the chin from the state's perspective, but again, it's the right thing to do."

Act 313 establishes clear, uniform standards for ADUs across the state:

• Size: An ADU cannot exceed 1,000 square feet or 75% of the primary home's size, whichever is smaller.
• Parking: Municipalities are prohibited from requiring additional off-street parking for the new unit.
• Fees: Application fees are capped at $250.
• Flexibility: The law allows for attached, detached, and internal ADUs and does not require the property owner to live on-site.

However, the state law includes limitations that affect its ultimate impact. It does not supersede private neighborhood covenants, which can still restrict ADU construction, and it leaves the regulation of short-term rentals to local governments.

While the legal framework is taking shape, the actual construction of ADUs is still in its infancy. Homeowners must still navigate the standard process of preparing plans, securing financing, and obtaining building permits.

As cities work to meet the approaching deadline, the full effect of the law on Arkansas's housing landscape remains a developing story.