Texans be warned: Let’s quickly learn from California’s mistakes before it’s too late. Consider one of California’s most expensive cities: Los Angeles, to understand how it reached painful levels of unaffordability.
By 2002, LA already had a housing supply problem. As prices soared, families started flooding out of LA and into other cities; about 160,000 residents left Los Angeles County, according to the 2020 census. Those who left were largely Angelenos with low and middle incomes faced with dwindling housing choices: Since 2015, housing cost has been the No. 1 reason cited for leaving California.
This displacement of low- and middle-income residents shows up clearly when comparing LA housing prices to household income levels. In 2002, the wealthiest families in LA could find homes for about five times their annual incomes while homes for lower-income workers typically cost more than eight times their annual incomes. Today, homes are six and 12 times annual household incomes for those respective households, putting not just homeownership but any kind of affordable housing out of reach for most families.
This trend of mass displacement of the LA workforce should make Texans nervous: trends in Dallas’ housing look painfully similar. In 2002, rich and poor Dallasites alike could find homes for just a bit less than three times their annual incomes. Today the wealthiest families in Dallas can still find a home close to three times their annual income, but homes for lower-income households cost more than five times their incomes. Plainly put: While residents in both LA and Dallas share a common experience of rising home prices, the stresses of an inadequate housing supply fall hardest on families with lower incomes.
As a growing population moves into a city that has not built enough to keep up, home prices have risen. The end result of this process is that families who lack resources find themselves with bad choices: crowd into smaller spaces, move further away, or risk sleeping in cars or shelters.
However, there is hope: LA and Dallas have artificially limited the number of families they have room for. In Dallas, only about 14% of residentially zoned land allows anything other than a single-family home on a large lot. Meanwhile over 50% of Dallas households live in duplexes, townhouses, or other attached dwellings, according to census data.
The good news is that architects, builders and developers will create ample housing supply if we simply let them by legalizing more and different kinds of housing: think granny flats, starter homes with smaller lot sizes, building more with quicker construction times and other types of homes that let households split the high and increasing cost of land and infrastructure.
We cannot solve this problem by building one type of housing — the solution is necessarily multifaceted and requires homes of all types: detached homes, condos, townhouses, duplexes, attached dwelling units and apartments.
Recent hearings and testimony in the Texas Legislature by both a House and a Senate Committee, plus tweets by key leaders like House Speaker Dade Phelan and Sen. Paul Bettencourt, R-Houston, are promising signs that Texas leaders understand the severity of our housing crisis. But while it is important for decision-makers in the halls of the Texas Capitol to understand, we want Texas families to understand too: A necessary prerequisite to an effective policy to retain our Texan workforce is a state regulatory system that allows our builders to quickly build safe, modern housing of different kinds in all places.
Kevin Erdmann is the author of Building from the Ground Up, Nathaniel Barrett, is the owner of Barrett Urban Development LLC and Nicole Nabulsi Nosek is the chair of Texans for Reasonable Solutions. They wrote this column for The Dallas Morning News.
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