PANEL APPROVES BILLS TO COMBAT RISING COST OF HOUSING

(AUSTIN) — It would be easier to build new housing under a pair of bills approved by the Senate Local Government Committee on Thursday, an effort to lower the cost of housing by increasing the supply. While Texas enjoys a relatively lower cost of living relative to other states, the price of housing continues to increase. Both Governor Greg Abbott and state Comptroller Glenn Hegar have made public statements warning about this trend, and Lt. Governor Dan Patrick made the issue one of his priority pieces of legislation in the form of SB 15, one of the measures considered and passed on to the full Senate this week.

According to the Office of the Comptroller, the median home price in Texas went up 40 percent between 2019 and 2023, while the shortage in housing rose to 306,000 units in 2021. Houston Senator Paul Bettencourt, who chairs the committee and is carrying SB 15, said that there’s another statistic that gives him the most pause: the age of the average homebuyer in the US is now 54. “It wasn’t too long ago that many of us…were buying homes in their 30s,” he said. “The fact that we have a 54-year-old average buyer in the country is approaching a crisis point.”

SB 15 would seek to alleviate this issue through the old law of supply and demand: as supply increases, price decreases. It would accomplish this by relaxing zoning and other local-level restrictions to allow for increased development. Cities couldn’t require minimum lot sizes less than 1,400 square feet, nor could they prohibit density lower than 31.1 units per acre. These new rules would only apply to plots of lands that are greater than five acres and have yet to be mapped or platted. “These provisions are intended to ensure that characteristics of existing neighborhoods are not heavily impacted,” said Bettencourt. The bill would only apply to cities in counties with populations exceeding 300,000.

Lawmakers don’t have to look far to see the effect of these policies as the city of Austin has experienced one of the most dramatic drops in housing costs and rental rates in America after implementing similar reforms. As of February, the average price of a home in Austin fell nearly four percent over the previous year, according to the Austin Board of Realtors. The median home price in February was $564,000, down from an all-time high of $677,000 set in May of 2022.

“This is not one single shot that’s going to fix this problem,” said Bettencourt. “We’re looking at solutions across the board to solve this problem.” That includes SB 854, by Galveston Senator Mayes Middleton, which would help religious organizations develop multi-family housing on vacant land by limiting cities’ ability to require specific zoning or land-use rules on these tracts. In addition to meeting demand for affordable housing, said Middleton, it offers these organizations the opportunity to further their mission. “Many of these faith-based organizations feel called to serve their communities by providing this housing,” he said.

There’s also SB 840, by Mineola Senator Bryan Hughes, which would allow residential development in areas zoned for commercial construction without having to go through the lengthy re-zoning process. “We can all think, off the top of our heads, of empty space that could be developed into housing – much needed, increasingly needed housing,” said Hughes. “The re-zoning process is lengthy, it’s complex, often requires legal and consulting expertise – we know that everything we do to add to the cost of housing prices families out of the market.”

The committee heard testimony on these bills Monday and took votes on the measures Thursday, sending SB 15 and SB 854 on to the full Senate for consideration. SB 840 remains pending before the committee.

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