The need for affordable housing is on the increase daily, as citizens are still grappling with the effects of Covid on the total wellbeing and means of livelihood of the people on the decrease. Now, nearly half of Texans spend almost 30 percent of their family income on the cost of housing, making the demand for Affordable Housing of greater necessity in 2021 and beyond. Unfortunately, current policies and strategies of government not geared towards bridging the void of affordable units desired. This article, therefore, seeks to answer the all-important question: ‘Is Texas Housing more affordable in 2021?’
Texas Housing Market in 2021
It is well-known that Texas is perhaps the hottest market now, especially in the terms of migration of new residents. The state has witnessed a high surge of new residents enticed by numerous elements, overall the state’s low housing prices. Unfortunately, the low housing prices may not be there for long. Affordable Housing units are on the decrease in several Texas counties. For instance, from the information made available by Texas A&M Real Estate Center, among the houses sold in Collin County, a suburban neighborhood of Dallas, in 2019, only 4 percent cost shorter than $200,000—a decrease from 51 percent as formerly as 2011. Similarly, the findings of Zillow, in the Austin municipal, the median house now sells for almost $397,000, as against $200,000 in 2011.
Why is Texas Housing Becoming Expensive?
The high demand for housing in Texas is one of the high costs of housing in Texas. “Texas’ population in 2010 rose from 25,145,561 to 27,862,596 in 2016. That is a rise of 10.8 percent. This expansion steers the nation in numerical increase.” Population propulsions demand, and immigration propulsions population. From an Economists perspective, price defines demand and supply. So yes, reducing demand would bring about a reduction in price. But increasing supply would also bring about a price reduction and give room for the establishment of many jobs and expand the tax base magnificently.
Another cause for the soaring prices in housing cost is legal constraints imposed on housing. In Texas’s metropolitan areas, zoning codes are the same as other U.S. municipalities. Vast districts in the exceptionally high demand, prominent neighborhoods of cities like Austin and Dallas constrain advancement through single-family zones, significant critical obstacles, and parking lots minimums. Also, in Houston, repeatedly alleged to have “no zoning”—meaning the municipality does not appoint neighborhoods for restricted residential or commercial purposes. However, other clauses of the municipal code have the most splendid of the constraints establish in conventional zoning codes.
Another threat to affordable housing in Texas is that increased real-estate prices created political tensions due to terrible tax policy. Texas has expensive property taxes but retains low commercial taxes and no state income tax. The improved property and home prices, necessitated by lousy tax policy, are horrible for the working class and new residents, who are significant to the state’s tech prosperity.
Property taxes are one of the vastly productive tax structures because they do not penalize productive activity; meaning, the price of land banks mainly on the location of the land and other intrinsic factors than on developments by the land proprietor. Citizens can condone increased property taxes until property prices begin to soar. Then, drive them into fabricating to crown property taxes and transition to other shapes of surcharge, such as income taxes, which would immediately weaken the economy by bringing about productive activity slight compensative.
Though Texas Housing is still more affordable, drastic actions must be taken by all actors in the sector, including the government in combating the imminent surge in the price of housing in Texas.