Texas Bill Would Legalize Townhouses
Texas has a well-earned reputation as a place that builds.
The state built 16 percent of the country’s new housing last year despite being home to 8 percent of its population, according to data from the National Association of Home Builders. The Lone Star State managed to build over twice as much housing as the more populous, more expensive California.
Two decades of robust population growth and COVID-era price hikes have nevertheless pushed up Texas home prices and rents. The Legislature is considering a series of reforms intended to keep housing costs down and the growth machine running.
This past week, the Texas Senate approved a bill that allows homes to be built on smaller lots. In the past month, it’s also passed bills that legalize accessory dwelling units (ADUs) statewide and allow private parties to issue building permits.
“The goal is to get government out of the way and allow the private sector to increase the supply of housing so that we can meet demand and bring down the cost,” says James Quintero of the Texas Public Policy Foundation, a free market think tank.
Local minimum lot size rules can require homes to sit on lots of 5,000 square feet, 10,000 square feet, a whole acre, or even more. Satisfying these requirements means builders have to consume more land than they otherwise would. They end up building larger, more expensive homes to compensate for those higher land costs.
“The larger the lot size, the larger the price tag,” says Quintero.
There’s a growing body of evidence that Texas builders would make use of smaller lots if they were allowed.
One 2019 study of minimum lot sizes in several Texas suburbs found that typical lot sizes are concentrated at the legal minimum size. Builders also make frequent use of flexible “planned unit developments” to build housing on lots smaller than the legal minimum.
In famously unzoned Houston, several rounds of reform beginning in the la
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