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Texans are facing higher home prices and rents amid the state’s economic boom — and housing experts say the state needs to build more homes to cover those costs.
This week, the Texas Tribune published a pair of stories exploring the state’s housing affordability crisis and its role. local regulations This may contribute to the worsening of the crisis, the options that officials have to curb the rise in house prices and political obstacles this makes it difficult to solve the problem.
Here are five key takeaways from those stories:
Texas needs hundreds of thousands more homes
Texas builds more homes than any other state. But homebuilding has lagged since the Great Recession that began in 2007. While the state’s economy boomed and Texas added millions of new residents, it didn’t last.
The state needs 320,000 more houses than it has now forecast released on Wednesday Up For Growth is a housing policy organization. This shortage, especially in the state’s large metropolitan areas, has created competition for a limited supply of homes, resulting in higher home prices and rents.
Emerging research shows that building more homes lowers home prices and rents. For example, in response to surprising demand during the pandemic, apartment construction accelerated sharply in the Austin area, with the addition of tens of thousands of new apartments forcing rents down, but they remained above pre-pandemic levels.
Texas cities limit how many houses can be built
Research shows that local restrictions on what homes can be built and where, known as zoning ordinances, limit cities’ overall housing supply and contribute to higher costs.
Regulations in many Texas cities make it difficult to add enough homes to meet demand, a Tribune analysis says.
(How local regulations affect high housing costs in Texas)
Cities allow the construction of detached single-family homes with front and back yards—long the American property model—in almost any residential area. Building denser, less expensive housing such as townhouses, duplexes and smaller apartment buildings in those areas is largely illegal, the Tribune’s analysis shows. Cities don’t leave much space elsewhere to build such houses or large housing estates.
These restrictions effectively limit how many homes can be built – driving up home prices and rents as Texans compete for a limited supply of housing.
Relaxing zoning regulations could help cities add more homes and contain housing costs, the study found.
Housing prices have fallen in places where zoning restrictions have been loosened
When Minneapolis officials loosened zoning rules in 2018, allowing duplexes and triplexes to be built between single-family homes and encouraging apartment building along transit and commercial corridors, those efforts appeared to help curb rising rents. The city also struck down requirements that new housing developments provide a certain amount of parking, which would encourage developers to build housing where parking was previously required.
The reforms didn’t create a boom in homes like duplexes and triplexes, but Minneapolis saw a wave of construction of large apartment buildings that helped keep the city’s rents under control.
In Houston, thousands of new homes have been built on smaller lots in the decades since officials reduced the amount of land required for single-family homes in the city. That boom has helped Houston keep home prices low compared to other major U.S. cities like New York, Los Angeles and Chicago, housing advocates and experts say.
Officials are considering ways to allow more homes
City and state policymakers in Texas are increasingly considering ways to ease zoning restrictions and allow more housing — with support from an emerging movement of “yes in my backyard” activists, often referred to as YIMBY, pushing for such changes.
Officials in Austin, the poster child for the state’s housing affordability crisis, have made several reforms over the past two years to try to control the city’s housing costs.
The City Council allowed three dwellings in many neighborhoods that previously only allowed single-family homes and reduced how much land the city needs to accommodate single-family homes. They also allowed apartment buildings to be built 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.
Politicians in other cities, such as Dallas, El Paso, Fort Worth and San Antonio, are also looking for ways to increase home construction as a means of curbing home prices and rents.
Texas lawmakers may tackle the state’s housing affordability crisis when they convene in Austin next year. Lt. Gov. Dan Patrick and House Speaker Dad Phelan have tasked lawmakers with finding solutions to the crisis and signaled that state-mandated reforms to the city’s 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 are likely to face fierce opposition from homeowners and neighborhood groups that have long held sway at the ballot box. But there seems to be common ground on some ideas between zoning reform advocates and its opponents. For example, while both seem to favor allowing homes to be built on land zoned for commercial development, Texas’ largest cities discourage the practice.
Changing the city’s zoning rules is not a panacea for the state’s housing woes, housing advocates and experts warn.
Other factors, such as interest rates, the pool of available construction workers and the cost of building materials, can determine whether housing is ultimately built, even if cities relax zoning restrictions.
Texas also spends less on housing for low-income families, who face a housing shortage. Advocates say the state should increase these costs.