USA – ALABAMA Trends and Developments Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser, Katie Sinclair and Courtney Dow, Dentons
A new zoning appeals process was passed by the Alabama Legislature during 2025 which impacts those in the industry interested or already in the process of zoning or re-zoning property in the state. Sec - tion 11-52-81 of the Alabama Code was amended to address the appeals process for property owners who do not agree with the decision of a zoning board, requiring new, tighter appeal deadlines. The board’s decision would remain in effect during the appeal pro - cess unless the circuit court grants a stay, which could heavily impact a project’s timeline. The HUD Effect A new issue arising from a recent decision by the Department of Housing and Urban Development (HUD) and the Department of Homeland Security (DHS) could cause strain on future multifamily devel - opers. HUD performed an audit on tenants living in HUD-funded housing nationwide, revealing that nearly 200,000 tenants had not met eligibility verification. Of those considered ineligible, 25,000 were deceased individuals and 6,000 were ineligible non-American tenants. In response to this discovery, the DHS Secre - tary signed the American Housing Programs for Amer - ican Citizens Memorandum of Understanding (MOU), which uploaded all HUD Sections 8 and 9 tenant files to the Systematic Alien Verification for Entitlements (SAVE) for immigration status verification. This tenant matching report has a large impact on all immigrants in the United States in cases of public housing pro - grams or housing choice voucher programmes. For those in the industry considering conventional Fan - nie Mae or Freddie Mac loans, this new update does not apply; however, the long-term impact should be considered by all multifamily developers.
In connection with the above statistics, HUD pro - posed another rule which, if passed, would stop families with any undocumented family member from living in federal subsidised housing and would require local authorities to report any tenant that is not eligible for rental aid to US Citizenship and Immigration Ser - vices. Should this rule pass, it is calculated that hun - dreds of thousands of people would face eviction. The Trump administration proposed a similar rule during the President’s first term, which was met with harsh criticism. For owners who have multifamily properties which have or will offer federal subsidised housing, it would be best practice to retain as much information as possible regarding the applicable tenants and to consider this as a potential new ruling in 2026. Conclusion: Looking Ahead in 2026 Despite the challenges presented in 2025, more con - sistent and stable investment activity is expected over the next year, trending towards pre-pandemic averages. Those in the industry hope to see stabilised rates and renewed lending activity driving increased activity in all sectors. As the capital market once again becomes more active and developers grow eager to build, the real estate market for 2026 is poised to rise. In particular, sectors such as multifamily, industrial, office space, retail and data centres each continue to show promising momentum. With renewed corpo - rate leasing activity, expanding industrial and logis - tics demand, a resurgent retail landscape and growing data centre investment, the state’s diverse real estate market is well equipped to capitalise on these oppor - tunities in the coming years. Many anticipate a higher number of transactions in 2026 which should outpace that of the last few years, and Alabama’s market is prepared to meet that demand with the state’s real estate sectors proving to be healthy and vibrant.
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