Testimony: Strategies to improve housing affordability

Key Takeaways:

• The best way to improve housing affordability is to build more of everything.
• Minimum house size requirements are an exclusionary tool that prevent low cost housing from being built.
• Single stair buildings are a proven housing typology that could infuse high demand areas with small apartment buildings.

Housing Prices are a Supply Problem

An abundance of housing affordable to the Texas middle class has historically been one of our state’s greatest competitive advantages. Now, a decade of underproduction of homes has led to increasing prices and decreasing affordability. Median home prices in Texas have exploded from $244,000 in February 2020 to $340,000 in August 2024. 45.2% of Texas renters are housing cost burdened, meaning they spend at least 30% of their income on housing; the same can be said of 26.4% of homeowners. Even with an increase in household wages – the median household income in Texas rose from $68,400 to $79,060 from 2020-2023, in 2017 the median home price in Texas surpassed three times median household income – a common metric of affordability.

These significant increases in home price are largely driven by a lack of supply. The nonprofit UpForGrowth calculates the Texas housing shortage at 320,000 units, with a nationwide shortage of nearly 3.9 million units. To begin to moderate home prices and improve affordability, Texas must ease regulatory burdens to housing construction and adopt creative strategies to allow the market to respond to a growing populace with a diverse set of demands.

Eliminate Minimum House Size Requirements

Minimum house size requirements serve to inefficiently and expensively compel the construction of larger houses than would otherwise be demanded by the market. This results in higher home costs.

As minimum lot size standards compel families to purchase more land than they need, minimum house square footage requirements, which some municipalities use in conjunction with minimum lot sizes, compel families to purchase a bigger house than they want.

The square footage of the median house on the market has declined by 92 square feet in eight years – from 1,927 square feet in July 2016 to 1,835 sq feet in October 2024. This trend is particularly evident in the size of newly constructed homes. Real estate analytics firm Parcl Labs reports that the median square footage of new construction has declined nearly 13% from 2,328 sq ft in 2014 to 2,036 sq ft in 2023. As the market trends toward smaller homes, minimum house sizes could become a factor preventing the development of single-family homes that the market desires. For example, nearly half of newly built homes nationwide would be illegal in some single family zones in Mesquite, where minimum home sizes reach 2,000 square feet.

The Legislature could eliminate these requirements to allow for the construction of smaller, more affordable homes.

Allow Single Stair Buildings

Single stair buildings are a widely used building typology that allows for small multifamily apartment buildings to be integrated into the existing urban fabric. While these buildings are ubiquitous in most of the world, their usage is limited in the United States.

The International Building Code, which is designated in Texas statute as the municipal commercial building code for most multifamily properties, dictates that for multi-family developments over three stories tall, each unit is required to have access to two means of egress (stairwells) connected by a fire rated corridor. Multifamily development is permitted to be serviced by a single stairwell provided the building is one to three stories tall – a height limit so restrictive that it is used by only Uganda, South Africa, Pakistan, Canada and the United States.

To meet this requirement, apartment complexes are built using “double loaded” corridors with apartments on either side of a windowless hallway. To offset the loss in rentable space from the means of egress, these double loaded corridor buildings are large. According to a joint Boston Indicators and Harvard University report, “typical residential floor plates…need to be at least 14,000 gross square feet to meet financing underwriting requirements in most North American markets.”

Conversely, allowing an apartment building to be served by one stairwell, (called “single stair” or “point access block” buildings), allows multifamily buildings to exist on a smaller scale on smaller lots. Single stair buildings can achieve 95% floor plate efficiency, compared to a low of 80% efficiency for double loaded corridors. These smaller apartment buildings fit more cohesively within existing neighborhoods, have better cross ventilation and energy efficiency, and, with access to more light on multiple sides of a unit, family sized units with more bedrooms can be built.

Recognizing the potential of single stair buildings as a “missing middle” housing typology, many municipalities and states are filing legislation to circumvent the IBC’s restriction on single stair buildings. California, Colorado, Connecticut, Minnesota, New York, Oregon, Pennsylvania, Rhode Island, Tennessee, Virginia, Washington and Wyoming have embarked on efforts to increase usage of this building typology. Texas could follow suit to allow this proven building typology to serve Texans in high demand areas.

Read more:

• Testimony: Nurse practitioners can improve health care access
• Testimony: Recommendations on prescription drug prices program
• Testimony: Address housing, nutrition needs of pregnant women

This written testimony was presented to the Senate Committee on Local Government on Nov. 7, 2024.