Texas has seen a massive population growth in recent years, with some experts estimating a population increase of 1.6 million people by the end of the decade. Despite this, Texas’ state and local governments only spent 0.9% of total expenditure on housing and community development in 2020. This ranked them at 49th in state spending in this area. While the state’s major selling point for potential residents is the promise of a more affordable cost of living in comparison to other states, such as California and New York, Texas is having a hard time keeping up with housing demands and, as a result, the promise of more affordable housing.
This housing scarcity, on top of historically high rents and home prices nationwide, has created an undesirable market that has lawmakers eager to find a solution. With a growing body of research indicating that the increase in the development of market-rate housing can slow the increase in housing costs for lower-income neighborhoods, many Texas lawmakers are introducing bills to try and expedite the construction of multifamily housing (both affordable and market-rate) and homes, in hopes that building more housing overall will lead to lower costs. Below are some of the bills being introduced and the impact they may have on Texas’ demand for affordable housing.
Introduced by Senator Bryan Hughes, SB491 aims to address building height restrictions in certain municipalities, such as Austin, that limit the height of buildings that are within close proximity to single-family homes. Advocates for SB491 state that current building height limitations make it harder to build multi-family properties next to single-family homes. This limitation further exacerbates housing scarcity in neighborhoods that need it the most. It is worth noting that if this bill does pass, it will only affect municipalities that have a population of over 725,000 people.
Introduced by Representative Craig Goldman and James Talarico, HB1058 would create a state housing tax credit that would supplement the existing federal Low-Income Housing Tax Credit program (LIHTC). With the LIHTC program being the most utilized resource for developing affordable housing communities in the state and country, the hope is that this additional state tax credit will further incentivize developers to build affordable housing for their communities. Although this bill was introduced before and never made it out of the House of Representatives, advocates hope that with the growing need for affordable housing, lawmakers will see the importance of incentivizing development and turn this bill into law.
A major bill that has the potential to make waves in affordable housing is SB1787. Introduced by Senator Paul Bettencourt, this bill focuses on decreasing the minimum sizes for residential lots currently being enforced in most cities in the state. Intending to fulfill many homeowners’ dreams of having a house with a yard, a high majority of cities enforce minimum lot sizes that range from 3,500 to 5,750 SF. Although larger residential lots may be more appealing to potential buyers, more land leads to more expensive purchasing costs. This can price some prospective homeowners out of the market. With this bill, lawmakers want to encourage builders to make smaller, more affordable homes for residents.
While some critics of the bill say selling a small, inexpensive house on pricier land does not economically make sense, advocates stress that larger lot sizes discourage an increase in population density. In turn, an increased population density would have positive effects on communities. These effects include expanded walkability, more accessible public transit, and increased commercial development within neighborhoods.
Like SB491, this bill does come with some stipulations. SB1787 will only impact, “a municipality that is wholly or partly located in a county with a population of 300,000 or more.” Also, not every neighborhood in the county would have to enforce the new minimum lot size. Homeowner associations and other groups can vote to opt out of the requirement and maintain their current lot sizes.
Under current legislation, if a property owner wants to rezone their land in the state of Texas, this rezoning can be blocked if 20% of the surrounding properties protest the change. If this 20% threshold is met, the local city council must have a supermajority (3/4th vote) in order to override the protest and move forward with the zoning change.
If HB1514, introduced by Representative Justin Holland, becomes law, it would increase the protest amount from 20% to 50%. Advocates of this bill expect resistance from neighborhood associations. However, they stress that the need for multifamily properties outweighs any neighborhood association’s dislike of increased apartments and traffic within their neighborhood.
A Lasting Impact on Affordable Housing
Although the need to increase affordable housing availability may take years to resolve, Texas lawmakers are introducing bills to address and hopefully solve growing concerns. While the bills listed above are only a few examples of the many pieces of legislation being introduced in the current sessions, all eyes are on the state of Texas to see what bills will pass and if they will truly make a lasting impact on the need for affordable housing.
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