Texas should have some form of rent control outside of disasters.
By Timia Cobb
Reporting Fellow
The Texas Tribune
Introduction
Approaching the end of 2021, Rebecca Brown had a tough choice to make: Either renew a lease at her Carrollton apartment complex, which wanted $346 more a month in rent, or leave the area where she’d lived for five years.
When Brown reached out to her leasing office, she was told the rent increase couldn’t be negotiated. Her two-bedroom, two-bathroom apartment’s rent would jump from $1,443 to $1,789. For Brown, the new price would be a struggle to afford.
“It stressed me out immediately because, I mean, that’s a huge jump,” Brown said. “That’s [about] $400. To try to come up with an extra $400 a month, that’s not that easy to do.”
Brown, a 37-year-old tax analyst, is far from alone. Across the state and country, a combination of social, economic and political forces are driving more people to look for rental housing but limiting the construction of units. That imbalance between supply and demand pushes rents upward, putting tenants in financial binds. And in Texas — where laws favor landlords, and rent control is virtually nonexistent — tenants are left to either take on additional jobs, cut other household costs or move out of the communities they prefer.
“I could have afforded the increase, but it just would’ve made the budget tighter,” Brown said. “So I was like, I have to start thinking about what my options are here.”
From March 2020 to last month, the estimated median rent of new leases has increased by double digits in several Texas cities, according to Apartment List. And it’s not just the big cities. Waco and Temple saw increases of more than 30% in that time frame.
In cities like New York and Los Angeles, rent control limits how much housing costs can increase on some units. And while such policies protect some tenants there, overall rental prices can still jump.
Texas allows rent control only if a city’s governing body determines there’s a housing emergency caused by a disaster. Even then, the decision to enact such a policy must be approved by the governor. The state’s government code lists many things that can be determined as a disaster, such as a flood, hurricane, drought and an epidemic. Texas’ landlord-friendly regulations — and lack of broader rent control — is increasingly making the state unaffordable for tenants, said Sandy Rollins, executive director of the Texas Tenants’ Union.
“It just leads to homelessness,” she said. “It leads to people having been priced out of the market.”
During the COVID-19 pandemic, the Texas Tenants’ Union encouraged the city of Dallas to implement rent control, but the effort gained little traction, Rollins said.
“We thought people needed protection at this time and we certainly still think people need protection to be able to stay housed and because landlords are using the opportunity of low supply to jack rents,” Rollins said.
Supply and Demand
Ian Mattingly, president of the Apartment Association of Greater Dallas, understands why some people think that rent control could help tenants feeling squeezed by higher prices.
But, he said, limiting how much landlords or property owners can make in rent could actually lead to fewer new units being built. That, in turn, could worsen the mismatch between what’s available and what people in his region are looking for.
“Just like any economic problem, the problem of pricing in housing is really related to supply and demand,” Mattingly said. “And the reason that the cost of housing — not just rental housing, but single-family housing — has gone up so much in North Texas over the past several years has really been because we are not producing enough supply to meet the demand.”
Since 2016, Texas has seen a 43% increase in the median cost of buying a home, according to research gathered from The Texas Real Estate Research Center at Texas A&M University. In 2016, the median sales price was $210,000. Only five years later, the median price sat at $300,000.
The increase in sales prices has made it harder for people to buy a home, increasing the number of people looking to rent. Luis Bernardí Torres Ruiz, a research economist for the Real Estate Research Center said that’s only worsened during the pandemic.
“If you look at home price growth, historically, for single-family homes, they’re at a really high historical level, an unprecedented level and unsustainable level,” Torres Ruiz said.
Meanwhile, the state’s continued population growth only increases demand for places to live. Texas gained the most residents of any state between 2010 and 2020, according to the latest census. It is home to three of the country’s 10 largest cities and four of the fastest-growing. That’s made it difficult for builders to keep up.
“The issue is, right now, because we had a big increase in people moving,” Torres Ruiz said. “In 2021, I think it was a record year on net people moving into our state and it’s difficult. It’s gonna be difficult for them to catch up.”
When Politics Poses Challenges
Texas cities’ zoning regulations can limit what kinds of developments can be built in particular areas. And such restrictions can make it more difficult for developers to meet housing demand, particularly in constructing multifamily properties that can provide hundreds of rental units with one project. In larger cities, like Austin, residential zoning that favors single-family homes over multifamily projects has made affordable housing harder to find for many people looking to rent.
But loosening zoning requirements can be a fraught local political issue — and not just in major cities. Fights over zoning have also recently played out in suburbs, many of which have morphed from sleepy bedroom communities to magnets for an enviable number of major employers.
“There are cities, like Plano and Frisco, that have had real political struggles related to housing affordability because you want to preserve what municipal advocates have called their suburban character,” Mattingly said. “But the truth of the matter is, Plano and Irving, these cities have more national and regional headquarters than in many cities, but they don’t have the housing stock that supports that.”
In addition to changing cities’ zoning ordinances, Mattingly said increasing the housing bonds administered by the Texas Department of Housing and Community Affairs could help increase supply. Housing bonds can be allocated at the state or local level to finance affordable housing. The bonds can fund the construction of rental properties or help first-time homebuyers with moderate to low incomes pay their mortgage.
In 2021, Texas set a cap of $3.2 billion to help finance housing projects or programs within the state. Over $1 billion was reserved for single-family home mortgages and credit certificates, while $1.8 billion was set aside for multifamily projects.
In early January, Austin Mayor Steve Adler announced his plan for a $300 million to $500 million affordable housing bond for the city, which has struggled for years to provide enough affordable housing for existing and new residents. A housing bond of this magnitude aims to permit more housing to accommodate the growing number of residents and prevent longtime citizens from being priced out. Adler hopes to put the proposition before voters in November.
Still, Rollins sees rent control as a way to combat the financial pressure tenants face from so many social and political forces.
“Rent control doesn’t stop somebody from making a profit, it just limits how much the rent can increase,” Rollins said. “So, places that have rent control boards, the landlords go before those boards and say ‘these are what my costs are and this is what I want to increase to’ and they [get] approval for the rent increase. It’s not like they’re told they can’t make money. They’re still making money. It’s just the gouging aspect of it is reduced.”
Rollins concedes that rent control likely wouldn’t solve the supply-and-demand imbalance if only some cities adopted it.
“I think that it would need to be widespread in order to mitigate any of the … harmful impacts that there could be if one city has it and another city doesn’t. Then landlords might build in the other city rather than the city that enacted a rent control law,” Rollins said.
Buying Time
Brown agrees that Texas should have some form of rent control outside of disasters. Brown failed at finding a cheaper apartment in Carrollton. However, she discovered that many nearby apartments offered more amenities than her current complex — at the same price her new rent was going to be.
The way Brown saw it, she had three options.
“So option one: Pay the rent, look at other ways to cut my budget, maybe even get a part-time job to try to make up the difference,” Brown said. “Option two: Try to find a different place that has better amenities. And then, like I said, at least then I’m actually, you know, getting something out of paying the extra money a month. Or option three: Leave the area completely.”
Brown decided she’d try and negotiate with her current complex.
She sent an email giving examples of the prices — and amenities — at other apartments in the area and pleading her case as to why she believed the new rent price should be lowered. She also argued why she was a tenant worth having, noting she always paid her rent on time and never had any lease violations. She also said her son enjoys his school, making her dread the prospect of having to move even more.
Her apartment management lowered the rent for a new lease from $1,789 to $1,520 — only a $77 increase over her previous rent payment.
“I just kind of basically sold myself,” Brown said. “Whether they were going to say yes or no, at this point I had kind of made my mind up, you know. If they were gonna say, ‘no,’ then it’s like OK, I know my options, now I can see that I can probably get more for my money’s worth.”
That solved her immediate problem. But with the forces that push rent up still persisting, Brown worries about when her lease ends, scared that she won’t be able to find a reasonable price next year.
Originally published by The Texas Tribune, 02.04.2022, republished with permission for non-commercial purposes.
About the Author
