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Texans have faced higher home prices and rents amid the state’s economic boom — and housing experts say the state needs to build a lot more homes to rein in those costs.
The Texas Tribune this week published a pair of stories examining the state’s housing affordability crisis, the role local rules may play in exacerbating that crisis, the options that officials have to rein in soaring housing prices and the political obstacles that make it difficult to address the problem.
Here are five key points from those stories:
Texas needs hundreds of thousands more homes
Texas builds more homes than any other state. But homebuilding fell behind after the Great Recession that started in 2007. It didn’t keep up as the state’s economy took off and Texas added millions of new residents.
The state needs 320,000 more homes than it has now, according to an estimate released Wednesday by housing policy organization Up For Growth. That shortage has fueled competition for a limited supply of homes, especially in the state’s major metropolitan areas — driving up home prices and rents as a result.
An emerging body of research shows that building more homes drives down home prices and rents. For example, when apartment construction accelerated dramatically in the Austin region in response to staggering demand during the pandemic, the addition of tens of thousands of new apartments forced rents down — though they remain above pre-pandemic levels.
Texas cities limit how many homes can be built
Local restrictions on what kinds of homes can be built and where, known as zoning regulations, limit cities’ overall housing supply and contribute to higher costs, research shows.
Rules in many Texas cities make adding enough homes to keep up with demand difficult, a Tribune analysis found.
[How local rules fuel high housing costs in Texas]
Cities allow standalone single-family homes with front and back yards — long the model of American homeownership — to be built in nearly any area designated for residential use. But it’s mostly illegal to build denser, cheaper housing — like townhomes, duplexes and smaller apartment buildings — in many of those places, the Tribune’s analysis found. Cities don’t leave as much room elsewhere to build those kinds of homes or larger apartment buildings.
Those restrictions effectively cap how many homes can ultimately be built — elevating home prices and rents as Texans compete for a limited supply of housing.
Relaxing zoning regulations can help cities add more homes and contain housing costs, research shows.
Places that loosened zoning restrictions have seen lower housing costs
When Minneapolis officials eased some of their zoning rules in 2018, allowing duplexes and triplexes to be built among single-family homes and encouraging apartment construction along transit and commercial corridors, the effort appears to have helped contain rising rents. The city also nixed requirements that new housing developments provide a certain amount of parking spots, which encourages builders to construct housing where before they were required to build parking.
The reforms didn’t produce a boom in homes like duplexes and triplexes, but Minneapolis did see a wave of construction of larger apartment buildings that helped keep the city’s rents in check, a recent analysis by The Pew Charitable Trusts found.
In Houston, thousands of new homes have been built on smaller lots in the decades since officials reduced how much land the city requires a single-family home to sit on. That boom has helped Houston keep its home prices low compared with other major U.S. cities like New York, Los Angeles and Chicago, housing advocates and experts argue.
Officials are eying ways to allow more homes
City and state policymakers in Texas have increasingly eyed ways to relax zoning restrictions and allow more housing — backed by an emerging movement of “yes-in-my-backyard” activists, often called YIMBYs, who have pushed for such changes.
Officials in Austin, the poster child for the state’s housing affordability crisis, have enacted several reforms in the last two years to try to get a grip on the city’s housing costs.
The City Council allowed up to three housing units in many neighborhoods that previously only allowed detached single-family homes — and reduced how much land the city requires single-family homes to sit on. They also enabled the construction of apartment buildings closer to existing single-family homes as well as along the city’s planned light rail line. Austin also became the largest city in the country to get rid of minimum parking requirements for new residences.
Policymakers in other cities like Dallas, El Paso, Fort Worth and San Antonio are also looking for ways to boost home construction as a means to rein in home prices and rents.
Texas lawmakers may also tackle the state’s housing affordability crisis when they convene in Austin next year. Lt. Gov. Dan Patrick and House Speaker Dade Phelan have tasked legislators with figuring out ways to address the crisis — and signaled that state-mandated reforms to city zoning restrictions may be on the table.
Zoning reform isn’t a silver bullet — and it still faces resistance
Proposals to build more apartments or other types of housing in or near existing neighborhoods can face heated resistance from homeowners and neighborhood groups, who have long wielded tremendous influence at the ballot box. But there appears to be some common ground between zoning reform proponents and its opponents on some ideas. For example, both seem to support permitting homes to be built on land that’s zoned for commercial development, a practice Texas’ largest cities don’t allow.
Tweaking cities’ zoning rules isn’t a panacea for the state’s housing woes, housing advocates and experts caution.
Other factors like interest rates, the pool of available construction workers and the cost of building materials also can determine whether housing ultimately gets built — even if cities relax their zoning restrictions.
Texas also spends little on housing for low-income families, who face the most severe shortage of homes they can afford. Advocates say the state should ramp up that spending.