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Texas Housing Challenges

May 5

Texas is doing such an excellent job of attracting businesses and residents that its negative effects are beginning to surface. High housing costs are a major problem for public sector workers, including police, firefighters, and teachers in large cities. The Texas Legislature is considering reforms to ensure that Texas housing remains one of the best places to raise a child and build a successful career. In typical Texas fashion, the state is embracing reforms that embrace free markets.

HB3921/SB1787 is sponsored by Rep. Bettencourt and Senator Goldman and lowers the required minimum residential lot size for large municipalities. This bill is similar to legislation recently passed in Montana. The bill would allow developers to obtain permits for smaller lots. This could lower the cost of housing by increasing availability in expensive areas. The law does not mandate a small lot but allows private owners to choose a smaller one if they so desire. A neighborhood can prefer larger lots and create a homeowners' association to set a minimum.

The legislators at Austin's capitol don't have to go far to understand the impact of their housing reform on Texas real estate. Houston, Texas, reduced the minimum size of its central neighborhood lots from 5,000 square feet to 1,400 sq. ft. about 25 years ago. Houston's policy proved so popular that it extended its smaller lot size to the outer neighborhoods of Houston in 2013. This change did not lead to run-down, tiny shacks. Instead, it coincided with a tenth reduction in the size of homes. This change reduced prices by 20% and yards which are not valued when land is costly. San Antonio has a minimum lot size of 1,250 sq. ft., below the proposed bill level. Austin has the largest housing shortage and a minimum of 5750 sq. ft.

A second law SB 1412, sponsored by Rep. Holland & Senator Hughes, allows homeowners to construct accessory dwelling units by right. The law prohibits cities from requiring extra permits that allow them to have discretion in approval.

Texas legislators understand the value of family and community. ADUs, also known as granny flats and in-law suites, will make it easier for Texas families to stay in their neighborhoods. The ADU allows a senior citizen grandmother or child with special needs to live close to family and Texas Homes affordably while still maintaining independence.