FREQUENTLY ASKED
QUESTIONS



SHOW ME THE DATA: Housing Prices and Texas.

Our mission is to keep the Texas Miracle alive: A key part of that is ensuring Texas workers can afford to raise a family and live comfortably in this great state. If we do not find solutions in the very near future, our average Texan resident: our teacher, firefighter, police force, artist and nurse will be driven out of living in Texas neighborhoods. This has already happened in parts of Texas. Together, we can put Texas on the right path.

THE HOUSING PROBLEM: Quantified
(Hint: It's bad.)

  • Almost half of Texans are defined as housing burdened, which means they spend more than 30% of their household income on housing costs.3

  • Texas cities make up 3 of the most 7 underhoused cities across the United States.23

  • Among 100 of the most expensive housing markets,  Austin ranked second most overvalued in the entire nation.4 Austin is so severely overvalued because of the regulatory environment that makes it so difficult and time-consuming to build homes.  

  • In Travis County alone — homes are up more than 55% from the year before.19

  • Rent in San Antonio is up over 20% from one year ago placing San Antonio in 10th place among metros with the fastest-rising rents year-over-year.20

  • Towns surrounding city centers like Bastrop are also suffering from immense pressure on both home prices and infrastructure capacity as a result of restrictive policies: In Bastrop County, the median home price reached $443,835 in February, a 61% year-over-year increase. 4

  • The median sale price of a San Antonio home in July was $341,600, an increase of 15.4 percent from a year earlier, according to the San Antonio Board of Realtors.20

  • Minorities in Texas are far more likely to have trouble purchasing or renting a home due to high prices.17

  • Dallas-Forth Worth’s housing production is 85,000 units short, increasing demand and decreasing supply.22  

  • Rents in Dallas suburb Denton have increased 26.7% since pre-pandemic levels.21 

  • From 1990 and 2019, the quantity of affordable single-family homes in Austin fell from 20% of all homes to only 2%.18

  • Studies show reducing housing costs can reduce homelessness by almost half in expensive cities where residents spend more than 30% of their income on housing and housing costs.7 Half of Austinites spend more than half of their income on housing and associated costs.3 

  • High housing costs not only affect individual families — they also limit Central Texas’ growth and economic potential. In Austin, 65% of renters surveyed recently planned to leave the region due either to the cost of housing (35%), job security (32%), or the length of commute (12%).6

HOW DID THE HOUSING CRISIS GET TO THIS POINT?

  • Suffocating land use restrictions are one of the largest determinants of housing unaffordability. The chart below shows the strong, positive correlation between house prices and the Wharton Residential Land Use Regulation Index, one of the most prominent measures of zoning stringency. 19

  • Delay and unpredictability in the building process tallies up to a 5% increase in rents and sale prices. All factors considered, bureaucratic delays in Texas absolutely contribute to driving out Texans from neighborhoods they once called home. 20

  • Prohibiting housing hurts the middle and lower-income the most: “Land use regulations reduce income mobility by shutting out relatively low-income residents from locations with high-paying jobs.” 20

Takeaway: Houston is the true success story of Texas— and the nation. The median house price in the Houston region is $310,000 compared to the U.S. median of $378,000— despite Houston experiencing decades of above-average growth. 21 Houston is the most liberally regulated major city in the U.S. in terms of land use restrictions. Let’s take a page from the Houston success story in order to build more, safely, to accommodate our elderly, teachers, caregivers and grandchildren.

FREQUENTLY ASKED QUESTIONS:

Does increasing the housing supply really make houses affordable?

Yes. An increase in housing supply causes the housing prices to drop. Research shows new market-rate buildings in low-income neighborhoods “decrease rents in nearby units by about 6 percent…” 22

There is also “Naturally Occurring Affordable Housing.” This means that over time new homes lose value and become more housing for the Missing Middle and Lower Income. This concept is called filtering: the process of housing becoming more affordable over time in a well-functioning housing market. When new housing is built, it tends to be more desirable than older existing housing. Relatively high-income people move into the newer housing, freeing up older, less-expensive housing for relatively lower or middle income households. One well-done study on filtering finds that 100 new market-rate houses built in a community caused 48 houses to open up for Middle and Lower Income families. 23

Do overly regulated markets really deter new houses from being built?

Yes. Over regulation deters new residential construction- terminating construction before it ever begins. One study shows that not only does it decrease housing supply, but it drives up prices: “Our estimates suggest that metropolitan areas with more extensive regulation can have up to 45 percent fewer starts and price elasticities that are more than 20 percent lower than those in less-regulated markets.”24

If cities build more, won’t that drive out the existing population?

No, in fact, the opposite is true: “Gentrifying" neighborhoods if anything see greater retention of existing residents and minorities than "un-gentrifying" ones, largely because the un-gentrifying neighborhoods see more residents move away as services and safety decline. 25

Will we have enough infrastructure for the new folks moving in?

Short answer: Yes and it’s cheaper. Adding to existing infrastructure is far less pricey than building entirely new infrastructure altogether: “…Planners concerned about excessive outward growth—and the high cost of all the additional infrastructure—should critically evaluate all minimum lot size rules. Overly strict rules could be inhibiting desirable infill development where infrastructure is already built, pushing new housing development out to where land is cheap but infrastructure is missing… building and maintaining this new infrastructure won’t come cheap.” 26

Won’t more housing hurt the environment?

No, the opposite is true. The #1 action a city can take to reduce its global footprint is building more housing within a city. 27 By banning builders from building densely, overregulation forces builders to build out. The majority of American housing growth exists at the edge of town, consuming farmland and natural reserves that would likely remain unbuilt. Additionally, the long drive times of employees commuting to job centers make up the lion’s share of carbon emissions. 28


References

1 Texas Water Development Board. 2021 Regional Water Plan - Population Projections for 2020-2070, State, Region, and County Summary. Retrieved May 10, 2022, from https://www3.twdb.texas.gov/apps/reports/Projections/2022%20Reports/pop_region

2 (2022, Apr 14). Texas legislature releases interim charges related to affordable housing. Affordable Housing News. Retrieved May 20, 2022, from https://taahp.org/texas-legislature-releases-interim-charges-related-to-affordable-housing/ 

3 Texas Affiliation of Affordable Housing Providers. Texan Housing Facts. Retrieved May 10, 2022 from https://taahp.org/texashousingfacts/

4 Pitcher, Michelle (2022, March 31). Austin Metro Population wave continues to rise. Austin Business Journal. Retrieved May 10, 2022 from https://www.bizjournals.com/austin/news/2022/03/31/how-many-people-are-moving-to-austin-each-day.html

5.5 2021 Regional Water Plan - Population Projections for 2020-2070 State, Region, and County Summary, March 28, 2019. Available at https://www3.twdb.texas.gov/apps/reports/Projections/2022%20Reports/pop_region

6 Austin Community Foundation Housing Report. Producing, Protecting and Preserving Housing Affordability in Central Texas, Retrieved May 10, 2022 at https://www.austincf.org/wp-content/uploads/2021/05/HousingReport-web.pdf

7 The State of Homelessness in America. The Council of Economic Advisors Report to the President, September 2019. Available at https://www.nhipdata.org/local/upload/file/The-State-of-Homelessness-in-America.pdf

8 Glynn, Chris (2018, Dec 11). Homelessness Rises Faster Where Rent Exceeds a Third of Income. Zillow.com Retrieved May 11, 2022 from https://www.zillow.com/research/homelessness-rent-affordability-22247/

9 Furth, Salim and Gray, Matthew (2019, May 1). Do Minimum-Lot-Size Regulations Limit Housing Supply in Texas? Mercatus Center. Retrieved May 1, 2019 at https://www.mercatus.org/publications/urban-economics/do-minimum-lot-size-regulations-limit-housing-supply-texas

10 Centopani, Paul (March 24, 2021). How accessory dwelling units could relieve the inventory squeeze. National Mortgage News. Retrieved May 11, 2022 at https://www.nationalmortgagenews.com/news/how-accessory-dwelling-units-could-relieve-the-inventory-squeeze

11 Ucles, Elizabeth. February 6, 2020. ‘Shot Clock Bill’ increases Frisco development plan denials, creates smaller case backlog. Community Impact retrieved May 11, 2022 at

https://communityimpact.com/dallas-fort-worth/frisco/2020/02/06/shot-clock-bill-increases-frisco-development-plan-denials-creates-smaller-case-backlog/

13 Department of Transportation, Federal Transit Administration, Center for Transit-Oriented Development. Mixed-income Housing near Transit: Increasing Affordability With Location Efficiency. Center for Transit-Oriented Development. Retrieved May 11, 2022 at https://ctod.org/pdfs/tod201.pdf

14 Henson,Jim and Blank, Joshua. New UT/Texas Politics Project Poll: Texans’ attitudes on population growth and the state’s future take a negative turn amidst economic troubles. The Texas Politics Project at the University of Texas at Austin. May 2, 2022. Retrieved May 11, 2022 at https://texaspolitics.utexas.edu/blog/new-uttexas-politics-project-poll-texans%E2%80%99-attitudes-population-growth-and-state%E2%80%99s-future-take

15 Shaw, Daron and Blank, Joshua. The Texas Lyceum Poll Finds Texans Are Deeply Concerned About Cost of Living. March 20, 2022. The Texas Lyceum.Retrieved May 10, 2022 at https://tel.memberclicks.net/assets/Board_Meetings/PubCon%202022%20Press%20Release%20.pdf

16 Glock, Judge and Keene, Robert (2022, March 31). Report on Housing Prices. Cicero Institute. Retrieved May 11, 2022 at https://ciceroinstitute.org/research/report-on-austin-housing-prices/

17 Producing, Protecting and Preserving Housing Affordability in Central Texas. Austin Community Foundation Housing Report. Retrieved May 14, 2022 at https://www.austincf.org/wp-content/uploads/2021/05/HousingReport-web.pdf

18 Jiao, Junfeng & Conrad, Josh (2021, Nov 9). Better Data Analysis Can Help Austin’s Affordable Housing Crisis. University of Texas News. Retrieved May 22, 2022 at https://news.utexas.edu/2021/11/09/better-data-analysis-can-help-austins-affordable-housing-crisis/ 

19 Hoffer, Adam & Nesbit, Todd (2020). Regulation and Economic Opportunity: Blueprints for Reform. The Center for Growth and Opportunity at Utah State University. https://www.thecgo.org/wp-content/uploads/2021/09/Regulation-16-pdf-1.pdf

20 Shannon. M. E., (2015). Quantifying the Impacts of Regulatory Delay on Housing Affordability and Quality in Austin, Texas, [Unpublished master’s thesis]. The University of Texas at Austin.

21 Feser, Katherine (2022). Houston home prices start 2022 with double-digit gains. Houston Chronicle. Retrieved August 8 at https://www.houstonchronicle.com/business/real-estate/article/Home-prices-start-2022-with-double-digit-gains-16966735.php

22 Arnold, Chris (July 14, 2022). There's a massive housing shortage across the U.S. Here's how bad it is where you live. NPR. Retrieved August 7 at https://www.npr.org/2022/07/14/1109345201/theres-a-massive-housing-shortage-across-the-u-s-heres-how-bad-it-is-where-you-l?t=1660174213554

23 Asquith, Brian; Mast, Evan; and Reed, Davin (May 6, 2021). “Local Effects of Large New Apartment Buildings in Low-Income Areas.” Review of Economics and Statistics. MIT Press Direct. https://direct.mit.edu/rest/article-abstract/doi/10.1162/rest_a_01055/100977/Local-Effects-of-Large-New-Apartment-Buildings-in?redirectedFrom=fulltext

24 Mayer, Christopher (December, 2000). “Land use regulation and new construction.” Regional Science and Urban Economics. https://www.sciencedirect.com/science/article/abs/pii/S0166046200000557

25 Freeman, Lance (March, 2005). “Displacement or Succession?: Residential Mobility in Gentrifying Neighborhoods.” Urban Affairs Review. https://www.researchgate.net/publication/249734755_Displacement_or_Succession_Residential_Mobility_in_Gentrifying_Neighborhoods

26 Gray, Nolan (June 20, 2019). “Do Minimum Lot Size Rules Matter?” Strong Towns. https://www.strongtowns.org/journal/2019/6/19/do-minimum-lot-size-rules-matter

27 https://coolclimate.berkeley.edu/ca-scenarios/index.html

28 Grey, Nolan (June 21, 2022). Arbitrary Lines. Island Press. https://books.google.com/books/about/Arbitrary_Lines.html?id=2468zgEACAAJ

29 Iszler, Madison (August 30, 2022). “‘Miserably hard’: Double-digit rent increases leave more San Antonio residents struggling to keep up.” San Antonio Express-News. https://www.expressnews.com/business/article/San-Antonio-rent-17408291.php

30 Hethcock, Bill (August 29, 2022). “Study explores why DFW's housing market is under supplied and overpriced" WFAA. https://www.wfaa.com/article/money/business/study-explores-why-dfws-housing-market-is-under-supplied-overpriced/287-4e48e903-d86d-48fc-895e-86948bb34858

31 (September 26, 2022). “Apartment List National Rent Report” https://www.apartmentlist.com/research/national-rent-data