A New Day in Texas
Legislative Reforms Offer Hope for Revitalized Development in the Lone Star State
While today’s housing affordability crisis has added strain to millions of households across the country, conditions are particularly acute in Texas. Years of anti-affordable housing sentiment — whether at a local cultural level or through statewide policy — have resulted in the Lone Star State’s housing shortage ranking sixth-worst in the nation, with a gap of 71 units per 1,000 households, according to the McKinsey Institute.
The shortage is placing an inordinate strain on lower-income Texans, with nearly 60 percent of households earning less than $33,000 annually classified as “severely cost-burdened” in 2023 — the fifth highest rate nationwide.
The tide may now be shifting. During the 89th Texas Legislature, which convened in January in Austin, lawmakers focused significant resources and efforts on reshaping affordable housing policy. “There was really a huge focus on housing affordability, which definitely led to some really positive pieces of legislation that are going to benefit the affordable housing industry specifically,” says Nick Walsh, vice president of development at The NRP Group.
This focus resulted on two key bills that could stimulate robust affordable housing growth for years to come. “The new legislation has changed the entire calculus for how I approach potential partnerships,” Walsh says. “It’s unlocked so many opportunities that just weren’t previously available.”
Marquee legislation reigns in NIMBYism
The most notable bill is Senate Bill 840. Signed into law in June and effective on September 1, S.B. 840 streamlines the development of non-residential commercial buildings into mixed-use and multifamily projects. The law overrides certain local zoning codes to prevent jurisdictions from blocking the development of multifamily housing projects on commercially zoned property, instead allowing that type of development “by right.” S.B. 840 only applies to cities with a population of 150,000 or more, which are located in a county of 300,000 or more.
Now, “if you could build an office building on a piece of property, the city can’t tell you you can’t build homes for families,” Walsh says. “This law basically takes that power away from the cities.”
The law aims to curb the power of Texas’s especially potent strain of Not-In-My-Backyard-ism (NIMBYism) that developers and experts say has impeded housing growth for decades. “Misunderstandings about how closely the Texas agencies monitor these affordable housing programs, and the unfounded fears or sound bites taken out of context is what continues to fuel NIMBYism across the state,” says Ellie Fanning, executive director at Brompton CHDO, a non-profit Texas Inter-Faith Group Alliance member.
