Bills to build more homes — and lower housing costs — fail quietly in final days of the Texas Legislature

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A sweeping agenda to slow Texas’ substantial rise in housing costs by reining in local regulations that opponents say get in the way of building new homes has died quietly in the Texas Legislature.

And when it came to a crucial vote this week, Democrats — who represent the state’s biggest urban areas, where home prices and rents are highest — accounted for most of the opposition.

Although Texas builds more homes than any other state, it’s not building enough to keep up with its massive population and economic growth, leading to historically high housing costs, according to housing advocates, builders and real estate experts. By some estimates, the state is short hundreds of thousands of homes.

Proponents of building more homes pushed legislation that would loosen city housing regulations and enlisted many Republicans in the GOP-dominated Legislature to help push the proposals over the line.

But those bills hit a wall this week amid opposition from both parties and neighborhood groups that work passionately to kill any attempt to build new housing in their areas. Democrats also cited concerns that the bills would further infringe on cities’ and counties’ ability to make their own rules on housing.

“There are many lessons Texas can learn from expensive states like California of what happens when you don’t build housing to accommodate job growth and family growth, before it’s too late for Texas’ middle class,” said Nicole Nosek, head of Texans for Reasonable Solutions, a nonprofit that pushed the housing bills this session.

Over the past several years, fights over statewide changes to local zoning laws in an attempt to boost housing production have played out in state legislatures across the country as skyrocketing housing costs have squeezed homeowners, would-be homebuyers and renters alike. By various estimates, the nation needs to build millions more homes than it has to at least temper the rising cost of housing — and a growing policy consensus has pinpointed city zoning restrictions as a root cause of the nation’s housing woes.

Lawmakers in California, Oregon, Washington and Montana have all enacted reforms to zoning laws, while efforts to do so in New York and Arizona have stalled out.

That fight quietly made its way to Texas this year after a red-hot housing market — spurred by the state’s rapid population growth and an influx of homebuyers during the COVID-19 pandemic — sent home prices and rents skyward.

But in a calamitous legislative session dominated by big fights between top Republican leaders, the matter garnered little attention. A pair of GOP bills, considered among the most consequential reforms sought by housing advocates, died in the House early Wednesday after lawmakers ran into a midnight deadline.

One would have drastically reduced city requirements for how much land new homes must sit on. Opponents of such requirements contend that they lead to the building of more expensive housing to make up for the cost of the land.

The other would have targeted “compatibility” requirements in cities like Austin that restrict a building’s height based on how close it is to a single-family home — which critics argue make it harder for developers to build apartment complexes next to single-family neighborhoods.

But even an idea considered a gentler way to boost the state’s housing stock died at the hands of a divided House in a late-night vote Monday that stretched into the wee hours of Tuesday morning. That bill would have made cities loosen their rules on the construction of accessory dwelling units — also known as ADUs or “granny flats” — in the backyards of single-family homes. Building more ADUs would boost the housing stock without disrupting a neighborhood’s character or building new major infrastructure, proponents argue.

“This bill is a private property rights bill,” said state Rep. Justin Holland, a Rockwall Republican who carried the bill. “It’s a free-market solutions bill. It aims to combat housing affordability issues … to benefit employees and individuals and businesses alike so that you can live close to where you work.”

But the measure encountered stiff resistance from Democrats, who warned that the bill would lead to a bonanza for short-term rental operators and so-called institutional homebuyers — meaning investors and corporations who buy single-family homes.

That was the line of attack taken up by opponents like the Texas Neighborhood Coalition, a collection of neighborhood groups that has opposed the proliferation of short-term rentals but also worked this session to kill proposals to build new housing. It’s common for groups of neighbors often referred to as “NIMBYs” — an acronym for not in my backyard — to oppose new housing by claiming it will harm their home values, exacerbate car traffic and destroy neighborhood character.

“While we understand the need for additional housing, we firmly believe all residential zoning decisions are best made at the local level by elected representatives who know the needs of their community and answer to local voters,” said David Schwarte, co-founder of the Texas Neighborhood Coalition.

Relaxing those restrictions at the state level would also sap cities of some authority to control land use in their backyards, Democrats argued.

After a yearslong assault on bluer urban areas by state Republican leaders, Democrats have been on guard about any measure that can be seen as an attack on “local control.” Last week, they failed to block a bill that would significantly restrict local governments’ ability to make new rules in a wide range of areas already covered by state law. The proposal cleared both chambers and is headed to Gov. Greg Abbott, who has long been a proponent of such a measure.

But opponents of new housing in other states have used the guise of protecting local control to kill statewide housing proposals in recent years.

The ADUs bill died by a 68-70 vote, with 43 Democrats and 27 Republicans voting against it. Fifty-five Republicans voted in favor, joined by 13 Democrats.

“We should not be coming along here and passing a law that’s going to make a commercial, uncontrollable, really unforeseeable mess out of every neighborhood in the state,” said state Rep. John Bryant, a Dallas Democrat who led the charge against the bill.

State Rep. Carl Sherman, a DeSoto Democrat, added, “The largest investment that our Texans make is buying their home. And what we’re doing is encroaching upon their dream, their American dream that they can have a home and not have to worry about what we do upstream to create havoc with their homes.”

House Democrats’ big role in killing pro-housing legislation frustrated housing advocates, particularly when local rules that would lead to more housing in most of the cities they represent often die in the face of NIMBY opposition. That’s been the case in Austin, where a group of homeowners has repeatedly and successfully sued the city over housing reforms, most prominently to block an attempted 2018 overhaul of the city’s land development code, which hasn’t been updated since the 1980s.

Lawmakers won’t leave Austin without any achievements on the housing construction front. A top priority bill for Texas House Speaker Dade Phelan that would accelerate cities’ development review processes for new housing — which builders complain can take months, adding to the ultimate cost of a home — has cleared both chambers.

But advocates lamented that lawmakers didn’t do more to reduce roadblocks for new housing construction and warned that the housing crisis will only be worse by the time the Legislature meets two years from now.

“It’s absolutely devastating,” said Greg Anderson, director of community affairs for Austin Habitat for Humanity who serves on Austin’s Planning Commission. “More and more, we have to realize this is purely self-inflicted. We choose to rather come up with talking points and good excuses for inaction. One has to wonder how longer we’re all going to accept it.”

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