The Texas Senate wants more — and smaller — starter homes in new neighborhoods

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DALLAS — New homes in certain Texas neighborhoods could be built on smaller lots, allowing for more homes to be built amid a shortage that has driven up housing costs, if a new proposal from the Texas Senate becomes law.

Senate Bill 15 — filed Tuesday by state Sen. Paul Bettencourt, R-Houston — reduces the amount of land cities can require single-family homes in new subdivisions to sit on.

Doing so makes it possible for homebuilders to put smaller homes on smaller lots, driving down the final cost of the home. The bill wouldn’t apply to homes built in existing neighborhoods, where homeowners often oppose new housing.

“What we're trying to do is come up with changes that get government out of the way of blocking affordable housing in the major urban cities,” Bettencourt said.

Also on Tuesday, the House unveiled a proposal that aims to bring down housing costs. House Bill 24 — authored by state Rep. Angelia Orr, R-Itasca — would effectively make it harder for property owners to oppose new housing near them.

The state’s high housing costs have placed enormous pressure on renters and the dream of homeownership out-of-reach for many Texas families — a large majority of Texans have signaled that those high housing costs are a problem. Lt. Gov. Dan Patrick named “removing barriers to affordable housing” among his top priorities for this year’s legislative session.

Lawmakers aim to put a dent in the state’s high housing costs by tackling the state’s considerable housing shortage. Though Texas builds more homes than any other state, it needs 320,000 more homes than it has, according to one estimate — a finding embraced by state Comptroller Glenn Hegar. That deep shortage, housing advocates have argued, played a key role in driving up home prices and rents — increasing competition for a limited supply of homes amid the state’s economic boom.

The Senate bill would prohibit cities from requiring single-family homes in new subdivisions to sit on more than 1,400 square feet — if the subdivision sits on at least five acres of land and is zoned for single-family development. The idea is to give homebuilders more flexibility to provide a broader array of housing options at different price points — and give would-be first-time homebuyers, who have struggled to find a home they can afford amid the state’s high home prices, a leg up.

Reducing lot-size requirements by that much, even only in new subdivisions, would be dramatic. Among major Texas cities, the most common requirements sit between 5,000 and 7,500 square feet, according to a Texas Tribune analysis. Those rules, critics argue, drive up a home’s final cost by encouraging builders to construct larger, more expensive homes. They also leave less land behind to build other homes, limiting how many homes can ultimately be built and exacerbating the housing shortage.

“The idea of this is to find that area of housing density that will increase the supply to the point where middle-income Texans can afford a house,” said John Bonura, a policy analyst at the conservative Texas Public Policy Foundation. The bill, Bonura said, aims to “restore the idea of a starter home.”

The lot-size rule would apply in cities that have more than 90,000 residents and sit in a county with more than 300,000 residents — a designation that applies to about 33 cities, Bettencourt said.

The bill’s proponents expect the legislation to spur at least some development in major cities. Dallas, for example, has more than 21,000 acres of vacant land, according to a city estimate — though not all of that land is contiguous. Bonura said he expects the bulk of the development spurred by the bill to take place in outlying suburban and exurban areas of major counties.

Any legislative proposal to allow more homes to be built will likely rouse strong resistance from existing homeowners and neighborhood groups, who often can oppose new housing in or even near where they live on the grounds that doing so would alter their neighborhood’s character. Some lawmakers have filed bills designed to make it harder for cities to allow more kinds of homes in existing single-family neighborhoods.

Bettencourt's bill attempts to short-circuit that opposition by only applying the new lot-size requirement to new subdivisions, Bonura said.

“We don't have to change everything everywhere,” Bettencourt said. “We have to change enough to make a difference on home affordability and on housing affordability in general.”

There’s also skepticism that building more homes can contain housing costs, despite evidence to the contrary. Legislators can see the dynamic that building more housing has on housing costs in the state capital itself: rents in the Austin region have tumbled for nearly two years amid a massive apartment building boom.

Statewide measures to diminish cities’ zoning regulations will likely encounter opposition from city officials and their allies in the Legislature. For much of the past decade, Republican lawmakers have pushed to erode the power of local elected officials in the state’s urban areas, who are often Democrats. Some city officials have already expressed anxiety about state lawmakers overriding local rules about what kinds of homes can be built and where — as states like California, Oregon and Montana have done. Such concerns fueled, in part, successful Democratic efforts to kill similar legislation two years ago.

Since then, Texas Democrats have expressed that they’re open to zoning reform — with some authoring bills to reduce local regulations. Two Democratic senators, Roland Gutierrez and Royce West, have signed on to Senate Bill 15 as co-authors.

Whether Democratic lawmakers will go along with those efforts remains to be seen.

Neighborhood groups opposed to statewide zoning reform, too, argue cities should have the final say when it comes to the kinds of homes that can be built in their communities.

“Why should zoning not be left to local authorities who know their communities, where small lots work, where they don't and what the mix of smaller and larger lots should be, even in new communities?” said David Schwarte, who heads the Texas Neighborhood Coalition, a group that has fought for restricting short-term rentals and helps residents enforce existing residential zoning laws.

Few parts of Texas have gone untouched by higher housing costs in recent years, proponents note — providing ample pretext for state lawmakers to intervene.

Bettencourt’s bill is part of a slate of proposals lawmakers, including Republicans and Democrats, have filed to relax some of those regulations. Those rules, critics say, have played a key role in preventing the state from adding enough homes to meet demand.

Easing zoning regulations can help cities add more homes and contain housing costs, recent research shows — though housing advocates and experts say that relaxing those regulations alone won’t resolve the housing crisis.

Lawmakers could relax local rules to make it easier for homeowners to build accessory dwelling units — often called ADUs, mother-in-law suites and casitas, in the backyard of single-family homes. Legislators in the Texas House rejected a similar bill in 2023.

Legislators also are entertaining ideas to allow homes to be built in places that now only allow offices, shopping malls, warehouses and houses of worship.

Disclosure: Texas Public Policy Foundation has been a financial supporter of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.

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