Texas Has Affordable Housing Crisis Part 2

By Joshua Fletcher, The Texas Tribune

“The problem we have is that many of these homeowners put their life savings into these homes with the expectation that they would be single-family neighborhoods,” Tepper said. “I think it’s really an overreach of the cities to allow a major sea change to these neighborhoods that would completely change the face and the intent and the design of those neighborhoods.”

The idea baffled Austin City Council Member José “Chito” Vela, a strong proponent of the three-unit reform. Austin’s high home prices and rents have been a core if not dominant theme in recent city elections — in which the capital city’s voters elected a supermajority of members to enact such reforms.

“There’s just no reason for the Texas Legislature to step in and try to undo any of this,” Vela said.

Proponents of changes to allow more housing hope the severity of the state’s housing crisis will push lawmakers to overcome “not-in-my-backyard” sentiments and enact laws that will meaningfully address the state’s high housing costs.

“I don’t think 1,000 NIMBYs showing up at a hearing [at the Texas Capitol] will get a sympathetic ear,” said Jay Blazek Crossley, executive director of the nonprofit Farm & City, an urban planning advocacy group.

Another likely flashpoint: how much state lawmakers may override cities’ zoning regulations in order to allow more homes to be built.

Republican lawmakers over the last decade have aggressively sapped authority from the state’s bluer urban areas, culminating in a sweeping bill during the 2023 session aimed at preventing cities from enacting progressive policies. Democrats in the Legislature have been on guard against any attempts to further erode cities’ authority — which propelled a majority of House Democrats to lead the charge to defeat the ADUs bill.

Texas Democrats have since shown openness to allowing zoning reform at some level — adopting a party platform this year that calls for rolling back local zoning regulations that get in the way of adding more homes. But it’s unclear to what extent Democrats in the Legislature will embrace those ideas — and skepticism toward state intervention remains.

“If we’re going to try to create a blanket law for the entire state, can we craft something that fits everyone’s needs and fits everyone’s community?” said state Rep. Gene Wu, a Houston Democrat who leads the Texas House Democratic Caucus. “I don’t know the answer to that.”

One reform floated by advocates may please enough people on both sides of the local control argument: making it harder for neighbors to object to new housing.

An obscure state law gives landowners the power to make it harder for cities to move forward with proposed developments near them. If a proposed development requires a rezoning and 20% of neighboring landowners object, the city council needs a supermajority to advance the new building. A group of Austin homeowners deftly wielded the law in recent years to convince a judge to kill a series of changes aimed at allowing more homes to be built.

The law saw renewed attention this year when neighbors near a proposed affordable housing development in San Antonio used the law to help stop the development — which then failed to get enough votes on the City Council to move forward.

That vote has fueled a new push to defang the law, creating unlikely alliances. The Texas Municipal League, an interest group that lobbies on behalf of cities, and the Texas Public Policy Foundation, the highly influential conservative think tank, are among those who want lawmakers to raise the petition threshold to 50% of neighboring landowners and reduce the required council vote to approve the project as a result of the petition to a simple majority.

What else is on the table?

Tweaking cities’ zoning rules isn’t a silver bullet for the state’s housing woes, housing advocates and experts caution. And lawmakers will likely look at other ways to reduce housing costs.

After enacting more than $12 billion in property tax cuts in 2023, tax-cut hawks in the Legislature have eyed the state’s projected $21.2 billion surplus to deliver a new round of cuts. The skyrocketing cost of homeowners’ insurance also will likely get lawmakers’ attention.

Lawmakers have also filed proposals aimed at speeding up cities’ building permitting processes so homes can hit the market more quickly.

Gov. Greg Abbott and Lt. Gov. Dan Patrick have indicated they’re concerned that so-called institutional investors — or investors and corporations that buy single-family homes to rent them out — may be crowding would-be homebuyers out of the state’s home-buying market.

Institutional homebuyers own a small slice of the country’s overall housing stock, estimates show, though their buying activity noticeably ticked up during the COVID-19 pandemic. Economists and housing experts have shown skepticism that laws curtailing investors’ home purchases would give first-time homebuyers a better shot at finding a home and improve housing affordability.