Everything's Bigger In Texas: Angry Neighbors, Aging Policies And Lack Of Will Are Digging A 10-Gallon Housing Hole

This is Part 2 of a Bisnow investigative series that explores the “Texas Miracle” — the Lone Star State’s multidecade strategy that attracted hundreds of U.S. companies, millions of people and billions of dollars within its borders. Texas became the ninth-largest economy in the world, but the nation’s housing crisis is hurtling the state toward an uncomfortable reality: It's becoming unaffordable. Read Part 1 here. Part 3 is here. Our podcast conversation with former Texas Gov. Rick Perry is here.

A single lot sits undeveloped on the edge of North Central Expressway in the densely packed suburb of Lake Highlands in Dallas. Though surrounded by the trappings of suburban life — a nearby Home Depot, a busy law office — a prominent “No Trespassing” sign is the only indication anyone is looking after the property.

The vacant plot of land seems unwanted, but its owner has been fighting for years to turn it into desperately needed housing. It’s an endeavor that makes sense on paper but has been thwarted at nearly every turn.

Cypress Creek at Forest Lane, located in an area zoned for commercial development, would offer market-rate apartments but also accept housing vouchers for rent-restricted units set aside for low-income families. That has drawn the fury of nearby residents, who have swarmed local meetings in opposition, claiming the project would lead to crime and lower property values. 

'Harder Than It Has To Be': One Of The Country's Worst Housing Shortages Is Only Getting Bigger In Texas
The empty 2.85-acre site that would be home to the 189-unit Cypress Creek at Forest Lane sits seemingly abandoned two years after developers first sought permission for the apartment project.

Their campaign has been so effective that no construction has begun to this day despite the project winning federal tax credits and the near-unanimous support of city council.

“We have been working diligently to try and make this project a reality, and it has been stunted by obstacles for two years,” developer Zachary Krochtengel of Sycamore Strategies told the Dallas Public Facilities Corp. in late February. 

The uproar surrounding Cypress Creek at Forest Lane is a microcosm of what is unfolding across Texas communities large and small. Housing demand far exceeds the production of new homes in high-growth markets statewide. Yet housing advocates and developers alike say projects that would add to supply and bring down costs are stalled or quashed outright, whether by angry neighbors, restrictive zoning or land use policies adding thousands to buyers’ bottom lines. 

"The honest solution to the affordable housing crisis in Texas is supply,” said Roger Arriaga, executive director for the Texas Affiliation of Affordable Housing Providers. “The only way you're going to moderate your pricing on rents and mortgages is by having more options."

The state was already short 332,000 homes as of 2019, according to a report issued last year by Up For Growth, a coalition of affordable housing organizations, urbanist groups and real estate interests with a mission of boosting housing equity and eliminating systemic barriers to production of more homes.

That shortage was enough to rank Texas’ housing shortage second-worst in the nation, lagging behind only California in the same report. The state is expected to gain more than 5.2 million new residents by the end of the decade, with no end in sight to obstacles, from antiquated zoning to large lot size requirements stymying new production despite a concerted push for reform in the Texas Legislature this year.

The state also ranks 49th out of 50 states in state spending on housing, per University of Texas at Austin researchers, a deficiency that impacts Texans across the income spectrum but hits renters with extremely low incomes hardest of all. Between 2019 and 2021, the shortage of affordable and available rental homes for families in the lowest income bracket grew by more than 500,000 units or 8%, according to Texas Housers.

That means there are only 25 units available per every 100 households for extremely low-income families in Texas, per a March report from Texas Housers, significantly lower than the 33 units available to the same families nationwide. In metros like Dallas, Austin and Houston, those numbers plummet to 16, 16 and 19 available units, respectively. 

Those equipped to address the problem, especially elected officials, say they find themselves stuck between a desire to alleviate the shortage and an inclination to appease neighbors. The solution, housing advocates say, is to ease regulations that keep housing from being built and push back on resident opposition.

“The way you solve affordable housing problems is you go and build more housing,” said Tipton Housewright, CEO and principal at Dallas-based Omniplan and a member of Dallas’ City Plan Commission. “You stop having NIMBYism, you get these zoning cases processed more regularly, you stop erecting so many barriers to developers to build a denser project that has more affordable housing.

“It sounds a little simplistic, and maybe it is,” he added. “But in some ways I think we make this problem harder than it has to be.”


The Stickiness Of Red Tape

Underproduction is most acute in the Austin metro, where the shortage of homes increased threefold to 33,238 between 2012 and 2019, according to Up For Growth. Between 1998 and 2022, home prices increased by 353.92%, the sharpest spike in the nation, reflecting population growth that has doubled over the past two decades.

Meanwhile, Austin will need 100,000 new rental units by 2035 to keep up with demand, a summer 2022 report by Hoyt Advisory Services and Eigen10 Advisors found. 

The same number is needed for Dallas-Fort Worth and Houston, according to the report.

'Harder Than It Has To Be': One Of The Country's Worst Housing Shortages Is Only Getting Bigger In Texas

Austin’s compatibility standards, widely viewed as among the most restrictive in the state, prohibit apartment towers from being within 540 feet of single-family homes in many areas. These types of regulations make it illegal to build apartments in about 80% of the city, said Jenny Schuetz, a senior fellow at Brookings Metro.

“There’s just an expectation that there shouldn’t be density in certain areas,” said Nora Linares-Moeller, executive director of HousingWorks Austin. “Neighborhoods just aren’t used to that, and they push back quite a bit.”

Supply chain issues, inflation and labor shortages have exacerbated underproduction, but land use restrictions make matters worse and drive up costs, housing advocates said. Nearly a quarter of the average price of a home in 2021 went toward costs of regulatory compliance, a survey by Texas 2036 found, including zoning approvals and changes in building codes.

Implementing policies that allow more density is what many affordable housing advocates, developers and a growing body of research say is the logical first step in meeting demand. But adding density doesn’t have to mean hulking residential towers. Even “gentle” increases in density — such as townhomes or small-scale apartments — diversifies supply and improves affordability, one Brookings Institution study found. 

Adding more housing of any kind has proven to keep costs at bay. In four American jurisdictions — Minneapolis; New Rochelle, New York; Portland, Oregon; and Tysons, Virginia — a relaxation of restrictive zoning rules led to increases in market-rate homebuilding, slowed rent growth and saved tenants thousands of dollars each year, an April Pew Charitable Trusts analysis found. 

“Nobody is saying we want to tear up zoning laws altogether and not have any form of land use regulations and literally just let the market build what it wants to build,” Schuetz said. “The pushback is current regulations, current government policy, is too strict, and the market can’t build, in some cases, much of anything, so we need to put some boundaries on excessive regulations.”

Compatibility standards have been relaxed along a handful of transit corridors in Austin, but advocates like Linares-Moeller believe housing policies that acknowledge the city’s exponential growth are needed across the board.

“In a 10-year period, we added a million people to our city,” she said. “That’s pretty rapid growth for a city that once considered itself small and weird.”

The development code in Dallas is 35 years old. Like Austin, updates are needed to both simplify zoning and accommodate an influx of residents. 

The city adopted its long-term planning document, Forward Dallas, back in 2006. Since then, the population has grown by about 160,000 residents, and the average home price has gone from nearly $196K to more than $423K, according to data from Texas A&M University’s Texas Real Estate Research Center.

'Harder Than It Has To Be': One Of The Country's Worst Housing Shortages Is Only Getting Bigger In Texas

New construction would also slow the historic, double-digit rent growth seen in Dallas. If the city built 10,000 new apartments a year, rents could rise between 47% and 85% in the next decade, a RentCafé study shows. At the current pace of 4,000 apartments per year, rents could rise by 123% over that same time frame.

This is why unlocking more land for development is so crucial, said Phil Crone, executive director of the Dallas Builders Association. Just making Dallas’ code easier to understand would go a long way in alleviating underproduction, he added.

“Oftentimes it's hard to know from one street to another what the rules are and how different overlays interact,” he said. “That complexity, that lack of predictability, causes a huge problem.”

Dallas has more than 1,500 planned developments, or areas where land use regulations are tailor-made. This creates a scenario where rezoning is needed practically any time a developer wants to build in a PD.

The city has already begun to push back on new PD applications, City Council Member Adam Bazaldua said, instead opting to entitle new projects based on the area’s assigned zoning rather than through customization. An update to Forward Dallas, underway at City Hall, would eliminate the use of planned developments, which Bazaldua said would also reduce the frequency of contentious public hearings.

“Spot zoning is something that really hurts your ability to urban plan, and it is also a tool that has perpetuated NIMBYism and hinders our ability to bring in any other nonconventional type of housing,” he said.

‘How Many Steaks Can This Cow Make?’

Minimum lot sizes have been around for centuries, created to prevent irregularity and protect property rights in urban areas while making sure lots in rural areas could accommodate septic systems and wells for drinking water, according to Strong Towns, a nonprofit that studies America’s postwar development patterns.

Texas’ biggest cities — and especially their suburbs — to this day have minimum lot sizes more appropriate for the Lone Star State’s agrarian past than its present. Those minimums have been leveraged to discourage smaller dwellings and are an example of exclusionary zoning, Crone said — rules housing advocates say are sometimes used to perpetuate racism and classism. 

'Harder Than It Has To Be': One Of The Country's Worst Housing Shortages Is Only Getting Bigger In Texas

“There’s this ‘keep it country’ type of mentality of ‘We don’t want more dense communities,’” Crone said. “Some of the overtones and the undertones that go around those conversations are really concerning.”

The price of land in Texas now comprises almost a quarter of the sales price of a single-family home, according to the state’s Senate Research Center. Larger lots are also more expensive to develop, which translates to higher housing costs, said Alex Kamkar, managing shareholder at Bold Fox Development and a member of Pearland City Council south of Houston.

“It’s no different than you and I buying a cow and asking, “How many steaks can this cow make?’” Kamkar said. “There’s only so many parts of that piece of meat, so now that piece of meat has become more valuable. Unfortunately, land is the same way, and lot density regulations only make that more difficult, not less.”



In the Houston-area city of Sugar Land, the minimum lot size is 6.6K SF, and the median price of a home in April was $410K, according to Redfin. In Prosper, an affluent rural community north of Dallas, lots must be at least 10K SF and the median cost was $830K. In the Austin suburb of Lakeway, the minimum lot size is 15K SF and the median cost was $875K. 

Cities in Texas that allow smaller lots tend to be more affordable. Houston lowered its regulation from 5K SF to 1,400 SF in the late 1990s, a move that led to a 20% decrease in costs over the course of a decade. The reduction also resulted in more housing being added to middle-income, underbuilt neighborhoods, according to a 2020 study by the Association of Collegiate Schools of Planning.

Houston is one of the most affordable Texas metros, with 36.4% of residents earning the local median income able to buy a home at the end of 2022, per the NAHB/Wells Fargo Housing Opportunity Index. As of April, the median sales price of a home in Houston was $340K, according to Redfin.

By comparison, the minimum lot size in Austin is 5,750 SF, one reason why housing there is so expensive. In Austin and Dallas, only about 2 in 10 homes are affordable to residents earning the median wage, according to the index, putting them on course toward cities like New York in terms of affordability if nothing changes.

“If that doesn’t concern you, that’s a big problem, because we are just trying to make sure everybody has an affordable place to call home, and trying to mandate acre-and-a-half lots is not the way to go about it,” Crone said.

Austin City Council voted in March to allow some lots to be split into smaller parcels, a move intended to pave the way for more affordability. Residents in neighborhoods that chose to opt into the program said the move would allow for more housing diversity and help more people afford the areas.

“The cost of property in our neighborhood, as it is throughout the city, is one of the biggest hurdles for folks to stay,” Brian Bedrosian, vice president of the North Loop Neighborhood Association, said at that council meeting.

Permitting Purgatory

Reducing lot sizes is one piece of Austin’s complex strategy to drive down prices. The city is also tackling permitting delays, an issue curtailing the production of housing in most of Texas’ major cities.

University of Texas at Dallas researchers found in 2015 that if Austin abided by its 120-day permitting mandate, it could cut rents at new apartments by as much as 5%. Delays in Dallas have added more than $42M to the cost of housing developments over the past few years, one DBA study found. 

'Harder Than It Has To Be': One Of The Country's Worst Housing Shortages Is Only Getting Bigger In Texas

“You can’t have affordable housing when you make building more expensive,” Crone said, adding costs are passed down to renters and buyers. “It’s an easy concept, but it just seems to fly over the head of a lot of people when you talk about the impact of regulations.”

New development rules enacted in the aftermath of Hurricane Harvey that called for raised elevation of new structures and additions significantly delayed housing production in Houston. The changes led to a backlog of thousands of permits that were taking several months to review. 

In Austin, the process is so bogged down, it takes between two and three years for a project to be developed from start to finish, Linares-Moeller said.

San Antonio isn’t battling the same issues as other Texas metros. 

The city’s open door policy and transparency sets it apart from other metros, Greater San Antonio Builders Association CEO Kristi Sutterfield said. The city's Development Services Department has made software changes, implemented after-hours pricing structures to fast-track permits submitted on nights and weekends, and launched classes that help builders understand why certain inspections fail.

Building permits are issued in three days on average, Sutterfield said, and inspection requests called in before 4 p.m. are typically addressed the next day. 

But in other cities, permitting delays caused by a surge in development activity, staffing shortages and antiquated software have grown so severe that third-party inspectors are used to speed up the process. The practice has been in place for many years in Arlington and Fort Worth and was approved by the Dallas suburb of Grapevine last fall, but Crone said he believes a statewide approach may be the best path to change.

House Bill 14, which was on its way to the governor’s desk at publication time, would allow for outside third-party reviews when cities and counties fail to act on a permit within 15 days. The bill was a top priority for House Speaker Dade Phelan, as well as for advocacy groups like the DBA.

“It's not like when your lumber supplier drops the ball and you can just go with another supplier,” Crone said. “You only have one show in town, and if you can’t get things through with the city for whatever reason, then you’re stuck.” 

‘I Don’t Want To Share’

Battling community opposition is the toughest climb of all in many localities. Multiple cities in Texas have become ground zeroes for affordability as they struggle to grow supply amid a groundswell of pushback against density that routinely stalls approval of new development, whether market-rate, mixed-income or affordable.

Man yelling during City Council meeting
A man at a December 2021 Plano City Council meeting speaking against a new mixed-use development that would include up to 700 multifamily units, 427 retirement housing units and 90 townhome units.

NIMBYism delays virtually every project,” Housewright said. “In my experience, in the city of Dallas, it probably stops a third or a fourth [of all projects]. That’s hundreds of units that just won’t get built, that won’t be part of our housing stock.”

NIMBY, or Not In My Backyard, is how housing advocates describe the sentiment of residents opposing new development, particularly projects that are dense or cater to low-income individuals. NIMBY groups tend to turn out in big numbers at public hearings and the ballot box, and council is often swayed by their feedback.

“It is hard for elected officials to grapple with these very real issues on each side,” said Angela Hunt, a land use attorney with Munsch Hardt Kopf & Harr and a former Dallas City Council member. “One: the very real need for more affordable housing stock, and two: the very real opposition, at times, of neighboring residents.”

That opposition has been felt at meeting after meeting about the Cypress Creek at Forest Lane project, which has drawn dozens of complaints alleging the new apartments would bring crime, traffic and “urbanization” to the surrounding neighborhood. 

“We have plenty of poor people living here among us,” Garrett Sherman, a resident living near the project, said at one meeting in late March. “I don’t want to share North Dallas because I like it just the way it is. And I don’t want to destroy it by bringing in all this population here. Urbanizing Dallas is a threat to my way of life.”

Source: Redfin survey of 3,000 Americans.

Opposition groups have poked holes in site plans as a way to thwart new development. This was the case in Austin, where two neighborhood groups honed in on a lack of ADA-compliant sidewalks as the reason why a permanent supportive housing complex for at-risk adults should be thrown out, lambasting the project as “rushed” and “negligent at best,” Austin Monthly reported.

Support for housing projects has even led to council members being ousted from office, while others have used NIMBY platforms to get elected. 

In Plano, an affluent suburb north of Dallas, council members Anthony Ricciardelli and Rick Smith earned spots on the dais after running successful anti-apartment campaigns. Smith’s campaign website touted a platform that hinged on preserving the suburban feel of the city and opposing “massive, high-density projects that increase traffic congestion and response times for public safety providers.” 

Their elections helped secure the four votes needed to deny any zoning change requests, according to Community Impact Newspaper, and have been integral to the slowdown of multifamily development in Plano in recent years. 

When developers set out to build a mixed-use project on one of the few remaining tracts of land in Plano in late 2021, citizens showed up in droves to air their grievances. The project, which included hundreds of multifamily, senior housing and townhome units, was met with 534 pieces of correspondence, 391 of which were in opposition. It was ultimately approved in a narrow 5-3 vote, with Ricciardelli, Smith and Shelby Williams opposed.

“We have seen all of these five-story apartment blocks going up on corners all over the place, with tens of thousands of people pouring out onto the same streets we have to drive on, using the same water facilities, sewage facilities, school districts, police and everything else,” Plano resident David Kemp said during the December council meeting.

“It’s just a mass of people crowding into our city and changing the feel of our city from the nice suburban neighborhood I moved into.”

'Harder Than It Has To Be': One Of The Country's Worst Housing Shortages Is Only Getting Bigger In Texas

NIMBYism is rooted in preconceived notions about the types of people who live in affordable housing, Hunt said. What many don’t realize is that as the cost of housing goes up, individuals at more income levels become eligible for rent-restricted units.

“Most of the people who complain about it, qualify for it,” said Alvin Johnson, founder and president of Hope Housing Foundation, a North Texas nonprofit that specializes in the development of workforce housing.

In Texas, 46% of renters are cost-burdened, which means they spend more than 30% of their income on housing costs and utilities, and U.S. Cenusus Bureau community survey numbers show the percentages exceed 50% in the state’s largest metros.

Essential workers like teachers, police officers, childcare providers, paramedics and veterans, as well as the elderly, all have average incomes that are considered cost-burdened, according to the Texas Affiliation of Affordable Housing Providers.

“Housing affordability is impacting every income band, not just the lowest incomes, not just workforce,” said Debra Guerrero, senior vice president of strategic partnerships and government affairs for multifamily developer The NRP Group. “It’s really the gamut.” 

Housing advocates say NIMBYism is often driven by fear of the unknown and a desire to maintain the status quo. At the community meeting for Cypress Creek at Forest Lane, some residents criticized their neighbors for thinly veiled attempts to disguise racism and classism as concerns about school overcrowding, crime and traffic.

“I think everyone needs to be honest with themselves and say these are people you just don’t want living near you,” resident Nichole Jefferson said at the meeting. “Yeah, you want them here to work for you, but you just don’t want them living next to you.”

Some states have passed laws that make it easier for municipalities to sidestep community opposition. In Massachusetts, a program designed to deter NIMBYs and adopted in 1969 allowed developments that designated 10% of units as affordable to bypass certain local review processes. 

The law has spurred the development of more than 68,000 units across the state, including 35,000 that are affordable to households earning below 80% of the area median income, a report by ULI’s Terwilliger Center for Housing shows.

Texas and other states are more than 50 years behind the curve.

“There are a lot of elected officials who don’t feel like they have the political support to do what they actually believe would be the right thing to do,” said Christopher Ptomey, the center's executive director. “Not just the morally correct thing, but the best economic choice.”

In Part 3 of Bisnow’s "Affording The Texas Miracle" series, reporter Olivia Lueckemeyer analyzes whether solutions to the state's burgeoning housing woes require top-down state intervention or should be left in the hands of cities.