Texas Housers is pleased to announce the release of our new report, “The Limitations of Land Use Deregulation for Housing Affordability.” Texas state leaders are increasingly expressing concern about housing affordability. Many policymakers are considering a focus on deregulation of land use and zoning rules as the primary way to make housing more affordable.
This report explores the nature of Texas’ affordable housing needs and whether such deregulatory reforms can successfully address them. As research consensus has shown for many years, housing unaffordability is severely concentrated among Texans with the lowest incomes. In this report, we observe research and local case studies that show that land use deregulation is not likely to make housing affordable for the majority of Texans who cannot afford their homes, especially in the short term.
We examine recent trends in Houston and Austin in order to paint a more nuanced picture of the impact of land use deregulation on the housing needs of low-income Texans. Houston has earned a national reputation as a “no zoning” city. Austin, which has relatively more restrictive land use controls, has nevertheless experienced a recent boom in multifamily housing construction. We find that neither Houston’s lax land use controls nor Austin’s prolific multifamily construction have been successful in making housing affordable for households who cannot afford their homes, or increasing access to historically exclusive neighborhoods for low-income households.
The report then explores some of the limitations of the land use deregulatory approach for producing housing that is affordable to the low-income households who are cost burdened, meaning they spend at least 30% of their income on housing costs. Findings include:
- There is mixed evidence that the development of new, market rate housing will be able to increase the availability of affordable units for cost burdened, low-income households, even in the long run.
- The legacy of historic discrimination and the use of restrictive land use controls as a tool for racial and economic exclusion require more than simply removing or relaxing regulations in order to be reversed.
- Small increases to residential density in single-family, low-density neighborhoods – such as some reforms that have been proposed in Texas – may have limited effects on overall market rate housing costs.
- The most severe housing needs of low-income households are at risk of being sidelined or ignored in the debate over whether to allow more and denser market rate development or not (Yes in My Backyard (YIMBY) vs. Not in My Backyard (NIMBY)).
We also consider potential harms for low-income housing that could occur if land use deregulatory efforts are not carefully planned:
- State level land use reforms that exempt land with “private zoning” (i.e., homeowner’s associations or deed restrictions) will likely reinforce existing patterns of segregation and exclusion rather than combat them.
- Certain state-level deregulatory efforts may risk neutralizing local tools, such as those that exchange density for affordable units, instead effectively swapping out these units for market rate units that are unaffordable to low-income families.
While land use deregulation may impact the stability of median housing costs, it is unlikely to have a significant impact on the housing needs of Texans who are housing cost burdened – nearly exclusively those with the lowest incomes. Texas needs solutions for these households. As the Texas Comptroller signaled in the recent report, “The Housing Affordability Challenge,” the best way to address these housing needs is, “more funding for low- to moderate income housing programs or incentives to increase the supply of housing at the price range where it is most needed [emphasis added]” (p. 16) .
The evidence is clear that housing problems such as unaffordability and instability are severely concentrated among the Texas households with the lowest incomes. In evaluating policy approaches for housing issues like land use deregulation, lawmakers must ask how well these reforms meet the actual affordable housing needs in the state. Who do these policies help? How will proposed reforms meet the needs of the Texas households who cannot afford housing, meaning those with low incomes? Texas has the 8th largest economy in the world, and we have enough to take care of our own. The people in our state who are struggling with housing costs are the kinds of people who are the engines of the Texas miracle. An investment in our people is an investment in Texas’ prosperity.
You can read the report, “The Limitations of Land Use Deregulation for Housing Affordability,” below:
