Texas Delivers On Housing Reforms, Connecticut Stumbles

Forbes

3 days ago

Mexican American family having a party in backyard of sustainable home with solar panels on the ... More roof. Suburb area of Houston, Texas.
The median sale price for a home in the United States was $440,913 in May, about $140,000 more than five years ago. The housing affordability problem that started in a few coastal cities has spread across the country, and the only way to solve it is to build a lot more housing. This year Texas passed several laws that will do just that, while in Connecticut a similar bundle of reforms was vetoed by the governor.
In its legislative session that ended earlier this month, Texas passed a number of reforms to make it easier to build more housing. The first law, SB 840, requires municipalities to allow what is commonly called missing-middle housing. These are housing types that lie between large single-family homes and multi-story apartment buildings, such as duplexes, triplexes, and townhomes. Many local governments have rules that effectively ban these types of homes, but now they will be allowed in any area already zoned for commercial or mixed-use development. This will enable developers to build affordable housing near shops, restaurants, and jobs, a pattern of development that was common across the country but has largely taken a backseat to residential-only suburbs since the 1960s.
Another law, SB 15, will make it easier for developers to build smaller homes in Texas. The law prohibits cities from requiring lot sizes of more than 1,400 square feet in new greenfield subdivisions of at least five acres. Land is a big contributor to the cost of housing, comprising between 20% and 40% of the cost of a new house. Allowing builders to use less land will make housing more affordable for lower- and middle-income families.
The third pro-housing law, SB 2477, removes regulations that discourage office-to-residential conversions. This law prevents local governments from tying up conversion projects with unnecessary traffic studies, parking requirements, and zoning changes. Last year, the Pew Charitable Trusts released a report showing that converting office buildings to single-room occupancy units is a feasible and effective way to add more housing in dense city centers. This new law will pave the way for such projects in Texas's big cities.
The next law, SB 2835, allows developers to build apartment buildings up to six stories with only one staircase. Single-stair apartment buildings are cheaper to build—reducing construction costs by 6% to 13%—and can fit on smaller lots than double-loaded corridor buildings. Their flexibility is especially important for infill development in cities, where lots are often small and irregularly shaped.
Finally, HB 24 eliminates a loophole that enabled small groups of anti-housing protesters to block new housing projects. The old law made it too easy for a minority of residents to use petitions and other mechanisms to stifle development. The new law modernizes the community feedback process to create more predictability for builders and ensures that property owners are not unduly prevented from using their land to help communities meet the growing demand for more housing.
Texas has grown rapidly since the pandemic, and these reforms will make it easier and cheaper to build the housing it needs. The reforms are timely, too. In a recent study, economists Edward Glaeser and Joseph Gyourko find that many Southern and Western metro areas are not adding as much housing as they used to, which is pushing prices up. By passing these pro-housing laws, Texas is doing its part to reverse this trend so families can afford to live and work in the Lonestar state.
Shifting to the Northeast, like Texas Connecticut had a chance to make housing more affordable this year. But unlike Texas, it whiffed on the opportunity when Connecticut Governor Ned Lamont vetoed HB 5002.
Connecticut's home price-to-median income ratio is 4.4, below the U.S. average but still a signal that housing is too expensive. Worse, the gap between housing prices and income has widened over the last five years. HB 5002 would make several changes to the state's housing policies designed to improve affordability. These include reducing and eliminating parking requirements, making it easier to convert commercial buildings to residential units, encouraging more development near public transportation routes, and making it easier to build missing-middle housing such as duplexes and townhomes. The bill would also increase funding to support and improve governments' planning processes.
During his veto announcement, Governor Lamont expressed support for many of the provisions in the bill. But in the end, he sided with local officials worried about the state infringing on local control. During his press conference, he said 'I think the only way to really make it work is if you have buy-in from the local communities.' In a unique twist, Connecticut Republicans—long thought to be the party of economic growth and property rights—led the effort to veto a bill that would have boosted economic growth and expanded individual property rights.
Responding to Lamont's veto, Pete Harrison, the Connecticut Director of the Regional Plan Association and the Director of pro-housing organization DesegregateCT told me, 'We wish Governor Lamont let alone Republicans in Connecticut would show half the foresight and common sense that Red State Republicans have shown when it comes to housing policy. The disconnect is costing Connecticut billions in economic activity and future growth.' He added 'We hope the governor keeps his promise to call a special session where both he and Republicans will have another chance at stepping up as both the Democratic-controlled House and Senate have done.'
While Governor Lamont's and Republicans' concerns about local control are understandable, it is important to remember local governments only have the control states grant them. If local governments abuse their authority—perhaps by making it unnecessarily difficult to build housing—state officials should step in to rectify the situation and uphold their responsibility to help the state prosper.
When it comes to zoning and land-use regulations, there are powerful local incentives to restrict new development. Current homeowners, well-connected developers, and local politicians chosen from these groups often worry about the impact new development will have on their neighborhoods, so they hinder it. State officials are better positioned to overcome these concerns since they have an incentive to consider the broader economic effects more housing will have on the state's economy and budget. It would be wise for Governor Lamont to remember these dynamics the next time a housing bill crosses his desk.
The high cost of housing is one of the biggest problems facing America. Research shows that high housing prices limit access to jobs and high-quality schools, delay family formation, and even reduce fertility. Young people are the most affected. According to one recent survey, 67% of Americans believe homeownership is unrealistic for young people. If this belief persists, it will undermine how younger generations view America: Not as the land of opportunity, but as a place where opportunity is hoarded by established homeowners at the expense of everyone else. Texas's officials are trying to fix the problem. We will see if Connecticut's join them.