Testimony Before the Texas Senate Committee on Local Government about Improving Housing Affordability and Eliminating Property Taxes on November 7, 2024

Chairman Bettencourt and members of the committee,

Thank you for holding this hearing. I am Dr. Vance Ginn, president of Ginn Economic Consulting, Texan, and father who is concerned about Texas's housing affordability crisis. While the state can’t address general inflation and interest rates, as those have been failures of Washington, policymakers can tackle restrictive local zoning and high property taxes.

First, restrictive zoning regulations restrict the housing supply, driving up housing prices faster than many can afford. 

• Reducing these housing restrictions imposed by mostly local governments can increase the housing supply, helping lower prices. Less restrictive zoning isn’t just good policy; it’s essential for making Texas affordable. The high cost of rent control, zoning rules, and other government failures highlight the importance of free-market solutions.

Second, regarding the 11th most burdensome property taxes, achieving affordable housing means committing to eliminating them. ​

• This should start by closing loopholes that allow local governments to bypass voter-imposed levy limits, enforcing a 0% threshold for tax hikes on all property without voter approval, and working to eliminate property taxes by cutting tax rates. 
• A key way is to limit state and local spending with a stronger constitutional cap and use surplus revenue to gradually reduce school district M&O tax rates by the state and other property tax rates by local governments until they are zero. 
• If interested, other ways exist to eliminate them faster, but spending less is the key to any path. Other states like North Dakota, Nebraska, and Wyoming could take steps soon toward property tax elimination for real homeownership, so Texas should lead. 

These reforms can benefit Texans, but achieving them will require political courage. Combining local zoning reform with a path to eliminate property taxes provides a practical approach to housing affordability that the Legislature can accomplish in the next session.
 
Thank you for considering these ideas to remove government obstacles and make housing affordable for Texans.

Vance Ginn, Ph.D., is president of Ginn Economic Consulting and contributor to more than 15 think tanks, including Americans for Tax Reform and Texans for Fiscal Responsibility. Dr. Ginn was previously a lecturer at multiple higher education institutions, chief economist at the Texas Public Policy Foundation, and chief economist at the White House's Office of Management and Budget. He earned his doctorate in economics at Texas Tech University. Follow him on X.com at @VanceGinn and get more of his research at vanceginn.com.