The state of Texas, unlike much of the country, has mostly weathered the current economic downturn. But while our resilience is to be commended, we aren’t completely immune, and a clear example is our housing affordability crisis.
Thankfully there is one reform that can bring Texans much needed relief. Suffocating lot size restrictions are among the biggest culprits behind housing unaffordability. Reducing minimum lot size requirements would create much needed affordable housing.
What is the minimum lot size? Simply put, it’s the minimum size of a lot allowed for the construction of a certain type of dwelling.
Smaller lot sizes can help reduce the costs of purchasing a home first by reducing the amount of actual land needed to build a home, and second by increasing the overall supply of housing.
To get a sense for where Texas stands let’s look at the minimum lot size requirement and the median housing cost in Texas’ five biggest metro areas:
- Our Texas capital, Austin, has a minimum lot size requirement of 5,750 square feet and a median home price of $501,000. Out of the major metros, the Austin-Round Rock area is one of the least affordable.
- Dallas has a minimum lot size requirement of 5,000 square feet and a median home price of $425,000. Of note, due to “uncoordinated lenience” the most common minimum lot size is 7,500 square feet.
- Fort Worth has a lower minimum lot size requirement than Dallas and Austin coming in at 3,500 square feet and a median home price of $365,000. Due to a lower minimum lot size, Fort Worth has been more housing affordability resilient.
- Houston, the largest city in Texas, has a minimum lot size requirement of 1,400 square feet due to an ordinance passed by the City Council back in 1998 and a median home price of $335,000. Houston’s home prices are most resilient among all the cities, likely due to its low minimum lot size.
- The Alamo city, San Antonio, has a minimum lot size requirement of 1,250 square feet and median home price of $320,000. San Antonio has the lowest minimum lot size and is tied with Houston on affordability.
Recognizing the advantage of loosening these restrictions, the Austin City Council approved Phase I of its HOME initiative in late 2023. The part of Phase I that impacts housing density increases the number of housing units allowable on a single-family lot. There will also be a vote upcoming on Phase II of the project, which would decrease the lot size to 2,500 square feet from the current 5,750. The city of Dallas is currently in an exploratory phase trying to feel out the will for a similar endeavor which would reduce the minimum lot size to 1,500 square feet and allow for what is referred to as “missing middle housing,” which are affordable housing units like triplexes or fourplexes.
Simply put, the solution lies in getting the government out of the way. There is a clear correlation between low minimum lot sizes and higher affordability. Minimum lot size reform is a step in the right direction. Local governments would be wise to allow the removal of burdensome regulations to reinvigorate the Texas Miracle.