Tackling Texas’ Housing Affordability Crisis

​Originally published at Texans for Fiscal Responsibility.

Texas is at a critical point in addressing its housing affordability crisis. As the property tax burden on Texans is at historic highs, the State’s housing market faces serious challenges that drive up costs and limit access to affordable homes. Solving this crisis requires a bold approach to removing restrictive zoning laws, reforming property taxes, and pursuing paths that enable true homeownership.

Property Taxes are Soaring, Limiting Homeownership
Property taxes in Texas have risen sharply in recent decades. Data from Texas Comptroller shows that total property taxes in Texas have skyrocketed from nearly $19 billion in 1998 to over $81 billion in 2023—a staggering 328% increase over 25 years. Most of this growth comes from school districts and local governments, where spending has far outpaced population growth and inflation. Despite the recent relief push, property taxes remain an ever-growing burden, keeping many Texans from achieving affordable homeownership.

Restrictive Zoning Laws Inflate Housing Costs
Restrictive zoning policies are another roadblock to affordable housing. By limiting where and what types of homes can be built, these zoning restrictions constrain housing supply, causing prices to rise. Opening up zoning could allow developers to build more homes, increasing competition and reducing costs for prospective buyers and renters. Such zoning reforms would enable the Texas housing market to meet demand more effectively, driving down prices and making homeownership more attainable for all Texans.

The Case Against Rent Control and for Free-Market Solutions
Some advocate for rent control to address housing affordability, but this policy only exacerbates the problem. Rent control limits lead to reduced housing supply, lower property maintenance standards, and an overall decline in housing quality. Texas should adopt free-market solutions instead of price controls that distort the market. Reducing zoning restrictions and property taxes provides a far more sustainable approach, encouraging private investment and expanding housing options without compromising quality.

A Path to Property Tax Elimination
True homeownership means owning a home without a continuous tax burden. For Texans to experience this freedom, we need a serious commitment to eliminating property taxes. Here’s a practical approach:

1. Close Loopholes and Enforce Levy Limits: Many local governments exploit loopholes to bypass levy limits, defeating the purpose of voter-imposed controls. Enforcing a 0% threshold for property tax hikes without voter approval would prevent local entities from sidestepping taxpayers’ voices.
2. Limit State and Local Spending: Effective property tax reform requires disciplined spending control. Limiting state and local government spending, combined with strict fiscal caps, would prevent the spending growth that drives up property tax rates.
3. Use Surplus Revenues to Reduce Property Tax Rates: Texas can use budget surpluses to gradually phase out property taxes, with the state cutting school district maintenance and operations (M&O) tax rates and other local governments eliminating their property taxes. This surplus-driven approach would allow for a consistent reduction in property tax burdens until zero, without jeopardizing critical public services.

Learning from Other States
Several states are already exploring ways to move away from property tax dependence. For instance, North Dakota and Wyoming could soon eliminate property taxes, offering a potential model for Texas. By setting ambitious targets, these states show that property tax elimination isn’t just an idealistic vision—it’s a practical policy choice that puts residents on the path to true home ownership.

Political Courage is Key
Implementing these solutions requires political will and determination to prioritize Texans’ well-being over short-term spending interests. Texas lawmakers need to recognize that high property taxes are not just an inconvenience—they’re a barrier to affordable living, an obstacle to homeownership, and an economic drain that weakens communities. Texas can lead the nation in housing affordability and economic freedom by reducing zoning restrictions, enforcing strict levy limits, and working toward eliminating property taxes.

Conclusion: A Sustainable Solution to Housing Affordability
The housing affordability crisis in Texas won’t be solved overnight, but a commitment to sustainable, free-market reforms can provide real relief. By removing restrictive zoning, eliminating property taxes, and rejecting failed policies like rent control, Texas can make homeownership affordable and achievable for more people.
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Now is the time to pursue policies that support true homeownership, economic freedom, and prosperity for Texans. Let’s choose a path that addresses the root causes of our housing crisis, unleashing the potential for a thriving, accessible housing market.