More Suburbs Are the Key to Making Housing Affordable

An article just published in City Journal, “Is Texas’s Affordable Housing Endangered,” describes how housing prices in Texas are becoming unaffordable. The article notes how the average house price in the Austin metropolitan area has doubled in just ten years, and how in the Dallas suburbs ten years ago over 50 percent of the homes sold for under $200,000 compared to only 4 percent today.

One of the reasons people move to Texas is because homes are affordable, and the author evokes California as a cautionary example. Because Texas relies on high property taxes instead of having a state income tax, if property values surge, there is a risk Texas voters will follow the example of set by the 1978 tax revolt in California. That revolt, which prevents annual reassessments of home value, could lead to Texas needing to raise income taxes, which would penalize productive activity.

There’s a lot of dominoes in that theory, however, which may or may not make it predictive. For example, if housing prices rise, the Texas legislature could simply lower the property tax rate, since higher assessments and lower rates can offset, resulting in a revenue neutral impact. But the author, Connor Harris, really goes off the rails in his discussion of policies to mitigate rising home prices.

Claiming “the main culprit for the rising prices is legal restrictions on housing,” Harris blames single family, residential zoning for the housing shortage. His solution is for the state legislature to pass a law […] Read More