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Republican lawmakers have begun to signal that curtailing the state’s high home prices and rents will be a major focus when they return to Austin next year.

Texas Republicans’ traditional approach to combating growing housing costs has been to rein in property taxes, which are among the highest in the nation. But one idea to solve the country’s growing housing crisis has been gaining traction in red and blue states alike: reducing or eliminating city zoning and land-use rules that determine what kind of housing can be built and where.

Many housing advocates believe these policies get in the way of adding enough homes. Curbing or getting rid of them, they argue, would bring down home prices and rents — and give would-be buyers a fighting shot at owning a home.

Unlike many of the contentious issues that drive stark partisan divides among Texas lawmakers, tackling the state’s housing affordability crisis could foster rare alliances between Republicans and Democrats during next year’s legislative session. That’s because the underlying attitudes Texans hold about housing don’t break cleanly along partisan lines.

Would-be homeowners and renters, regardless of political affiliation, are desperate for cheaper housing. Homeowners who tend to resist development — often referred to as NIMBYs, which stands for “Not In My Backyard” — can be found in Republican and Democratic strongholds alike.

For conservatives expressing support for zoning reforms in recent weeks, reducing government regulations and letting the free market take the wheel holds a clear appeal. It could also bolster property owners’ rights by allowing them to build more on their land.

“There's too much government involved in the housing affordability issue,” said James Quintero, policy director for the foundation’s Taxpayer Protection Project. “To the extent that we can either limit or get government out of the way entirely, we will begin to ease the problem and allow market forces to correct for it.”

State Rep. Cody Vasut, a Houston-area Republican who is close with House leadership, hinted he would welcome a proposal to at least tamp down on those regulations next session.

“We want to have good policies that encourage development in order to lower prices,” Vasut said during a February panel at a gathering of pro-housing activists and groups in Austin. “And the best way to do that is to get the government slightly more out of the way so that the free market takes off and provides a good product at a lower price.”

Allowing more homes to be built could also be another way of curtailing or reducing property tax bills, a particular obsession of Texas Republicans. It would spread the overall tax burden over a greater number of households, which has the potential to slow the growth of individual tax bills, the thinking goes.

“If you want your taxes to go down, you need more investment and more tax base in order to lower the [tax] rate, which then benefits everybody else,” Vasut said at the YIMBYtown conference, which takes its name from a pro-housing reform movement that stands for “Yes In My Backyard.”

This month, state Rep. Brian Harrison, a Midlothian Republican, also signaled his support for reforming local zoning laws and reducing land-use regulations as a way to tackle the housing crisis.

“If government wants housing to be more affordable, it should stop making housing so unaffordable,” Harrison wrote on the social media site X. “Let the free market work.”

The Texas Public Policy Foundation, the influential conservative think tank, soon after came out in support of eliminating local regulations that require homes to be built on a certain amount of land and restrict how many housing units can go on a particular lot.

Gov. Greg Abbott himself signaled growing concern over the state’s high home prices earlier this month when he called for state lawmakers to rein in institutional investors’ presence in the state’s homebuying market.

Such a move in Abbott’s view would theoretically level the playing field for families seeking a home, though housing experts have questioned whether curtailing investors’ home-buying activity would ultimately benefit individual homebuyers.

“I strongly support free markets,” Abbott wrote on X. “But this corporate large-scale buying of residential homes seems to be distorting the market and making it harder for the average Texan to purchase a home. This must be added to the legislative agenda to protect Texas families.”

Abbott’s remarks drew heat from some Texas conservatives who argued that such a move would unduly interfere in the free market — including Don Huffines, a former state senator who unsuccessfully challenged Abbott in the 2022 primary.

“Here are some solutions: ELIMINATE property taxes, STOP local governments from zoning out affordable for-sale housing, STOP the NIMBYs that are turning Texas into California, OPEN UP as much land to new homes as possible, BALANCE the federal budget, which should stop inflation and decrease interest rates,” Huffines wrote on X.

Republicans’ interest in housing affordability may signal a growing alarm that the state’s high home prices and rents could eventually imperil the so-called Texas economic miracle, said Brandon Rottinghaus, a political science professor at the University of Houston

Housing in Texas is significantly more affordable than in states like California and New York, a major carrot for attracting new residents and employers alike. But as Texas’ economy and population exploded over the last decade, so did its housing costs — a trend that only accelerated during the COVID-19 pandemic.

While average home prices in Texas and its major urban areas remain below those in California, New York and Florida, they rose significantly during the pandemic. High interest rates have only made the prospect of purchasing a home more difficult for would-be first-time homebuyers.

Texas renters, too, have felt the pinch. More than half of the state’s 4.2 million renter households now spend at least 30% of their income on rent and utilities, according to Harvard University’s Joint Center for Housing Studies.

“If you have Texas being perceived as a place where people can't buy a house, then you will see the flood of people coming here from other states, and other businesses relocating here slow,” Rottinghaus said. “Republicans say that they don't want Texas to become like California. But in terms of housing prices, that's where things are going.”

More than half of Texans say they spend too much of their income on housing, according to a 2023 Texas Lyceum poll — a reversal from 2020, when more than half of Texans said the exact opposite.

“People's kids, grandkids and they themselves not being able to access the American dream of homeownership in the same way that historically Americans always have been able to is creating a clear mandate from voters that something needs to be done by elected officials at any level,” said Nicole Nosek, who heads Texans for Reasonable Solutions, a nonprofit that advocates for zoning reform.

Room for bipartisanship 

Texas conservatives appear to be increasingly seizing on an emerging explanation for the state’s housing affordability woes: though Texas regularly outpaces the rest of the nation in homebuilding, it hasn’t built enough homes to keep up with demand amid the state’s booming population growth. Texas has the second-worst housing shortage in the country, just behind California, according to a recent analysis by Up For Growth, a nonprofit that focuses on housing policy. Texas needs 306,000 more homes than it has, the analysis shows.

Housing advocates argue that shortage has helped fuel high housing costs and have increasingly placed a significant chunk of the blame on local rules that dictate what kinds of housing can be built and where. Those rules, they contend, have made it difficult for developers to build enough homes to match housing demand, driving up housing costs.

Cities in Texas tend, for example, to require a minimum amount of land that a single-family home must sit on — a regulation known as a minimum lot size, which research has linked to higher home prices. Most cities’ residential land can only be used to build single-family homes and restricts how many housing units can go on a particular lot, which some advocates argue makes it difficult for developers to build enough housing to meet demand.

[Why some Texas cities are getting rid of their minimum parking rules]

Cities also limit how tall houses and apartment buildings can be and require a minimum number of parking spots that single-family homes and apartments must have — all mandates that housing advocates, real estate developers, economists and academics say can drive up home prices and rents.

“If we're really worried about housing affordability, the first step should be reducing these zoning restrictions,” said Vance Ginn, a free market economist who heads his own economic consulting firm.

Large bipartisan majorities back policies to allow more housing amid the nation’s affordability crisis, per a recent Pew Trusts poll. President Joe Biden’s administration has argued that local regulations limiting what kind of housing can be built and where ultimately drive up housing costs.

“The bottom line is we have to build, build, build,” Biden said at a gathering of the National League of Cities earlier this month. “That’s how we bring housing costs down for good.”

Blue states like California and Oregon and red states like Montana in recent years have each enacted reforms to loosen local restrictions on housing to combat their housing crises.

In Texas, even well-known adversaries appear to be aligning on housing. Republican lawmakers over the years have often targeted Austin officials for enacting progressive policies. But when it comes to relaxing land-use restrictions to allow more housing, the tenor of their proposed solutions is remarkably similar nowadays.

“We always think about politics as this spectrum or a straight line,” Vasut said at the YIMBYtown panel. “Politics is a horseshoe. … You see that there are maybe different desires or maybe motivations that are leading [people] to reach this conclusion, but that get both sides of the aisle wanting to address it.”

At a time of deep polarization and increasingly fraught culture-war issues, some see tackling housing affordability as an opportunity for both sides of the aisle to work together to solve a problem that affects every Texan, regardless of partisan affiliation.

For Democrats, zoning reform holds the potential to reduce racial segregation by allowing families of color greater access to housing choices — and thus better school districts and job opportunities — in wealthier neighborhoods. They also see allowing greater housing density as a means to fight climate change; if would-be homebuyers can find more affordable housing options closer to where they work, their commutes won’t be as long, thus cutting down on their carbon emissions.

“The fact that folks have to go farther and farther out from the urban core to be able to buy a home is just having a disastrous effect on our environment and our climate,” said state Rep. James Talarico, D-Austin.

For the past five years, Republican legislators have been on a crusade to lower homeowners’ tax bills by reining in spending by school districts and local governments and giving targeted tax breaks to homeowners. Last year, they passed $12.7 billion in new tax cuts aimed at saving the typical Texas homeowner more than $2,500 over a two-year period.

Property tax cuts — and the possibility of eliminating school property taxes altogether — will likely continue to play a central part in Republicans’ affordability agenda next year. Abbott told attendees at the Texas Public Policy Foundation’s Texas Policy Summit earlier this month that he is “insisting that we come back once again and ensure that we will continue to cut those property taxes until we get rid of the school property tax rate here in the state of Texas.”

But last year, Republicans acquired new vocabulary when it comes to housing affordability that fits into a growing bipartisan consensus on the matter. GOP legislators advanced bills, pushed by Texans for Reasonable Solutions, to reduce cities’ minimum lot sizes and restrictions on residential density, and loosen local rules to allow the construction of accessory dwelling units — also known as ADUs or “granny flats” — in the backyards of single-family homes.

Those proposals largely flew under the radar and died, but Republicans have lately shown signs that they’re interested in bringing similar ideas to the Texas Legislature next year.

There are signs that Texans already are open to such moves. A recent Pew Trusts poll found a majority of Texans support allowing townhouses and small apartment buildings on any residential lot — and apartments over garages or in backyards. Some 45% of Texans said they support reducing cities’ minimum lot sizes, according to the Pew poll.

Conservatives are already laying the intellectual groundwork for lawmakers to tackle some kind of statewide zoning proposal. The Texas Public Policy Foundation earlier this month called for state lawmakers to get rid of minimum lot sizes and density restrictions dictating the maximum amount of housing units that can go on a particular parcel — a move that theoretically would allow duplexes, triplexes, fourplexes and smaller apartment buildings in residential neighborhoods that currently only allow single-family homes.

“That's the right way to move because you're allowing market forces to voluntarily increase the level of supply,” Quintero said. “As supply goes up, housing prices will necessarily correct.”

Not without skeptics

It was a 1927 state law that explicitly grants cities the authority to regulate what kinds of buildings are allowed and where, and state lawmakers have the authority to curb or abolish that right.

But if Republicans pursue legislation next year to curtail cities’ zoning powers and encourage greater residential density, they likely will run into stiff opposition from both Republicans and Democrats who view any such moves as an attack on traditional single-family neighborhoods. Opponents of zoning reform often argue that homeowners bought property in neighborhoods that only allow single-family homes expecting they would stay that way.

“We need all the housing we can get, that’s what we need and we have plenty of land for it and plenty of places to put it,” said state Rep. John Bryant, a Dallas Democrat. “You don’t need to bust up single-family neighborhoods to get affordable housing.”

Some conservatives disagree.

“No one has a right to preserve a neighborhood in perpetuity using the levers of government,” Quintero said.

[Texas Republicans ended a patchwork of local rules they say hurt business. They also eroded powers of city councils.]

Statewide zoning reform will likely also set off alarm bells for Democrats and city officials wary of any measure they deem a power grab by the state’s Republican leadership. GOP officials have for the better part of the past decade waged a war on the state’s bluer urban areas, culminating in a new law last year that aims to significantly curtail cities’ ability to enact progressive policies — which cities have challenged in court.

“On any issue related to local regulations we believe government closest to the people is the best way to preserve the diversity of our great state and respect individual communities,” said Jennifer Stevens, spokesperson for the Texas Municipal League.

In a chaotic and dramatic late-night vote last May, House Democrats, joined by some Republicans, led a successful charge to narrowly defeat the accessory dwelling units proposal. Several Democrats — including Bryant, who spearheaded the charge — viewed the bill as an assault on cities’ zoning powers and an extension of Republicans’ ongoing efforts to limit cities’ ability to make their own policies.

“This is a matter for the local city councils to decide,” Bryant said in a recent interview. “Every city is different.”

Not every Democrat agreed. Talarico, the Austin Democrat, voted in favor of the proposal, which he said he saw as a way to help cities combat their housing affordability woes, not punish them.

“Every housing advocate that I talked to said, ‘[allowing] granny flats is one tool in the toolbox to fight back against this crisis,’” Talarico said. “To me, it was just a policy no-brainer, despite Republicans’ legacy of inappropriate overreach.”

[Austin will now allow more homes to be built on single-family lots]

Some Texas cities have initiated their own zoning reforms in bids to drive down housing costs. After statewide zoning measures failed at the Legislature, the Austin City Council voted last year to allow up to three housing units, such as duplexes and triplexes, on almost any lot in the city where only single-family homes had previously been allowed. They also are expected to reduce some of the city’s minimum lot sizes later this year.

But some think Texas’ affordability crisis is now so severe that intervention from the state is necessary.

“Local control is only good as long as we're allowing people to flourish,” said Charles Blain, president of the Houston-based Urban Reform Institute, another conservative think tank. “When local control steps in the way of people's ability to access economic mobility and upward mobility, that's when there is a necessity for the state to step in.”

Even if cities embark on their own zoning reforms, waiting for each of them to do so one-by-one can be a slow process that gives homeowners and renters who oppose zoning changes more chances to kill necessary reforms, said Vicki Been, faculty director of New York University’s Furman Center for Real Estate and Urban Policy. Enacting statewide zoning reforms would create more consistent policy between cities.

“What jurisdiction after jurisdiction has found is that going the way of local governments, doing their own reforms is very slow, very spotty and isn't going to get anything solved in the near term,” Been said.

Democratic state lawmakers have bandied about other ideas to bring down housing costs. They’re quick to point out that Texas spends few state dollars on affordable housing and that lawmakers should put more money toward building it. The state could also put money toward rental assistance, they say, noting that last year’s major tax-cut package left out direct tax relief for tenants.

Talarico hopes that whatever housing moves the Legislature considers, those moves don’t exclude local governments from the decision-making table.

“It took us a long time to get in this hole,” Talarico said. “If we're going to get out of this, we have to start taking immediate and bold action.”

Disclosure: Texas Lyceum, Texas Municipal League, Texas Public Policy Foundation and University of Houston have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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This article originally appeared in The Texas Tribune at https://www.texastribune.org/2024/03/27/texas-republicans-housing-affordability-zoning-land-use/.

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