government

From the Desk of Glenn Hegar:Texas’ looming economic threat: Not enough affordable housing

April 2025

The text that follows originally appeared in the Austin American-Statesman.

As Texas Comptroller, I’ve seen firsthand how our state’s economic vitality depends on tackling challenges decisively. My office’s recent Housing Affordability Challenge report (PDF) reveals a harsh truth: Texas is grappling with a housing affordability crisis that threatens our prosperity.

With median home prices jumping 40 percent between 2019 and 2023, and mortgage rates soaring to a 23-year high of 7.79 percent in October 2023, homeownership is slipping away for too many Texans. The solution lies in restoring a core property right: the freedom to build more homes. State lawmakers must step up with bold action.

Texas has proudly led the nation in new building permits since 2008, yet we’re still falling behind. Our population, especially in thriving metro areas, is outpacing our ability to construct homes. In 2023, Texas faced a shortage of 306,000 homes, according to Up for Growth.

This underinvestment hits lower- and middle-income families hardest, shutting first-time buyers out of the market. Rising costs beyond mortgages — such as homeowners insurance, up 6.9 percent in 2021 and 11.8 percent in 2022 — deepen the struggle. We can’t meet demand with the current tangle of rules holding us back.

Elevated housing costs impede hiring and retention, influencing where companies locate. While few firms have relocated solely due to these expenses, rising housing costs force businesses to raise wages, increasing operating expenses and prompting moves to more affordable areas.

The crisis stems from artificial barriers. Local regulations often choke development, inflating prices by limiting supply where Texans want to live. My report shows broad agreement that easing these rules could help. Yet, some resist, fearing disruption to neighborhoods or property values. While these concerns merit discussion, the status quo is untenable. Texas must prioritize our collective economic strength.

This isn’t just a Texas issue — it’s national. Economists Chang-Tai Hsieh and Enrico Moretti estimate restrictive land-use policies cost the U.S. economy $1.6 trillion annually in lost wages and productivity. Texas’ metro areas — including Austin, Dallas and Houston — are growth engines facing similar hurdles. If we don’t act, we’ll lose our edge.

While many of the issues are local, the fix can start at the state level. Lawmakers should pass laws to simplify permitting and construction rules, empowering property owners to build more homes — whether single-family houses, duplexes or apartments — where demand exists. This isn’t about stripping local authority but establishing a framework that restores the right to develop responsibly.

Encouragingly, Texas lawmakers are advancing legislative proposals to address the pressing challenge of housing affordability, including measures that remove barriers to own starter homes in new neighborhoods; efforts that would allow Texans to build homes safer and more efficiently with third party review; and laws to streamline the permit process, unlocking a property owner’s rights to alter their own property. In addition to addressing regulatory concerns, lawmakers continue to prioritize property tax relief efforts, which will lower the overall costs of housing.

The economic benefits are clear: More housing means more jobs, a stronger tax base and higher real wages as less income is consumed by housing costs. U.S. metro areas generated 90 percent of our nation's gross domestic product in 2012, but growth stalls when people can’t live where opportunities thrive. Texas can set a national example by showing how smart deregulation fuels prosperity.

Texas’ economic future is bright, but we must remain vigilant to ensure our state safeguards the conditions — including access to affordable housing — that have made Texas the nation’s top state for economic growth and opportunity.

My office stands ready to support lawmakers this session with data and ideas. Let’s seize this chance to restore property rights, build the homes Texans need and safeguard our economic health.

Time’s running out. Let’s act before the crisis worsens.

Learn more about the factors leading to the rapid decline in housing affordability in Texas and how the crisis is affecting Texans.