The recent study released by Texas Comptroller Glenn Hegar has put a spotlight on a crucial issue: the growing housing affordability crisis in Texas. This report not only underscores the severity of the crisis but also sets the stage for meaningful reforms in Texas’ upcoming 89th Legislative Session starting in January.
Rising Demand and the Rental Affordability Crunch
The Comptroller’s report reveals a severe housing affordability crisis, exacerbated by rapid population growth and insufficient housing construction. While Texas leads the nation in new building permits, the pace of construction hasn’t kept up with the increasing demand, particularly in metropolitan areas. This imbalance has increased home prices and rents, squeezing both potential homeowners and renters. In 2023, Texas was short by 306,000 homes, with the greatest shortage affecting middle-income buyers, according to analyses by Up for Growth. From 2019 to 2023, median home prices surged by 40 percent, widening the gap between residents’ incomes and housing costs, according to the Federal Reserve Bank of Dallas. Rising interest rates, increased home prices, and a growing population further intensify this issue. As more Texans are priced out of homeownership, the need for affordable rental options has never been more urgent.
Critical Shortage of Affordable Rental Units
The study also highlights a critical shortage of rental units for extremely low-income (ELI) households. Texas ranks poorly, with only 25 affordable and available rental homes per 100 ELI renter households, compared to the national average of 33 per 100. This shortage leaves many low-income renters struggling to find affordable housing options. TAAHP members are at the forefront of addressing this gap, focusing on projects that serve the lowest-income renters and making a tangible difference in the lives of countless Texans.
Legislative and Regulatory Opportunities
One of the most promising aspects of the Comptroller’s report is the potential for legislative and regulatory reforms to address housing affordability. Although there is broad bipartisan support for improving housing affordability across federal, state, and local levels, consensus on the best approach varies.
Local governments could streamline permitting processes and ease zoning regulations to boost housing development. While such changes could help increase housing supply, they often face opposition from homeowners concerned about potential impacts on property values and neighborhood character. State lawmakers remain interested in relaxing city zoning restrictions, despite similar proposals failing during the 88th Texas Legislative Session. Both Lt. Gov. Patrick and House Speaker Phelan have each directed lawmakers to study potential zoning reforms ahead of next year’s legislative session.
Proposals to reduce minimum lot sizes and update land development codes could accelerate home construction. Past reforms, like Houston’s reduction in minimum lot sizes, have successfully increased housing availability and kept costs lower compared to other major cities. A bill to reduce cities’ minimum lot size requirements for single-family homes made it through the Texas Senate last year, but died in the Texas House before it could come up for a vote.
Additional state actions could include increased funding for low- and moderate-income housing programs and incentives to boost housing supply. The Texas Department of Housing and Community Affairs (TDHCA), has a strong track record of success at administering funds for affordable housing, but increased state investment could further enhance these efforts.
Moving Forward: Seizing the Moment
As we reflect on the Comptroller’s findings, it is clear that TAAHP’s mission to provide safe, high-quality, and affordable rental housing is more important than ever. With heightened legislative attention and potential regulatory reforms, advancing legislation that results in increased supply of affordable housing in Texas looks promising.
By harnessing the momentum generated by the Comptroller’s report, TAAHP is determined to ensure affordable housing remains a top priority in Texas’ legislative and regulatory agendas, paving the way for sustainable solutions and a brighter future for all Texans.