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In Texas, Finding Affordable Housing Is Tougher Than Ever, Study Finds

Allison V. Smith
KERA News Special Contributor
New apartments are popping up in West Dallas and all across North Texas. They often come with higher rents.

It’s getting harder for people in Dallas-Fort Worth and other big cities in Texas to find affordable homes or apartments because the cost of housing is outpacing salaries.

That’s according to a new reportfrom Harvard University.

Brandon Formby is a reporter with the Texas Tribune who’s based in the KERA newsroom, and he’s written about the report.

Highlights from the Texas Tribune story:

Unemployment rates and downward spirals in home values weren’t nearly as bad in Texas during the national economic downturn as they were in other parts of the country. But the state’s large urban areas are still experiencing similar mismatches between housing stock and income as other American metropolitan areas.

Harvard researchers, elected Texas officials and development industry experts point to a number of reasons for the lack of affordable housing. They say that everything from stricter financing requirements to government regulations and labor shortages can drive project costs up to the point where smaller homes and rental properties for low-income people aren’t cost effective to build.

“Conditions are particularly tight at the lower end of the market, likely reflecting both the slower price recovery in this segment and the fact that fewer entry-level homes are being built,” the Harvard report said.
High demand for properties in Texas — a side effect of the state’s relative economic success and continued population growth — is also a contributing factor to increased project costs that typically get passed on to home buyers or renters.

Read the Harvard report here.

Interview Highlights: Brandon Formby

How Dallas-Fort Worth compares to other big Texas cities in terms of people being able to afford housing:

In Dallas-Fort Worth, 65 percent of homeowners can afford to buy a median-priced home. Forty-eight percent of renters can afford to do so. That puts North Texas on par, slightly above Houston and San Antonio. It’s still better than Austin, but not as good as El Paso. Austin is [more expensive because it is] a popular city, a popular place to live, which drives up demand which drives up prices.

More than two million urban Texan households spend 30 percent or more of their income on housing – and more than 950,000 of them spend more than half of their income on housing.

It’s alarming to a lot of housing advocates. They’re quick to point out the more you spend just to keep a roof over your head, the less you have for other needs: transportation, health care, clothing, groceries and education.

People with low incomes are having an even tougher time finding housing. Why?

As the cost to build houses or apartment units goes up, developers want to be able to make a profit, and to do that, they are building products that are more expensive. You’re seeing a lot of high-end apartments, more expensive houses being built, that completely out-prices people in low-income brackets.

In Dallas-Fort Worth, the Harvard study shows nearly 90 percent of people earning under $15,000 are burdened by housing costs. But even people making up to $75,000 are burdened by housing costs.

This isn’t just a problem that’s affecting poorer Texans. It’s affecting even the middle class. When you see housing outpace income across all levels, it creates this problem where even people making decent incomes are having a harder and harder time finding places they can afford to live.

Between 2000 and 2015, Dallas-Fort Worth saw the biggest increase – more than 1 million people – in the number of residents living in high concentrations of poverty. Those are neighborhoods where at least 20 percent of residents live below the federal poverty threshold.  What are the effects of that?

Housing advocates are worried about those statistics. There are a lot of studies that show when you live in high concentrations of poverty, it makes it that much more difficult to climb the socio-economic ladder. You’re more likely to stay at those lower-income levels. So, when the number of high-poverty neighborhoods increase, that alarms a lot of advocates.

What’s the future of housing costs in Texas?

It looks like the trend of higher housing costs will continue.  The popularity of Texas cities will drive land costs up. And it’s that rising land cost component that has a lot of people worried. In Austin, a housing advocate I talked with says no one in Texas or the U.S. has a solution to that part of the problem yet.

Brandon Formby is a reporter with the Texas Tribune. He’s on Twitter at @brandonformby.

This interview has been edited for brevity and clarity.

Eric Aasen is KERA’s managing editor. He helps lead the station's news department, including radio and digital reporters, producers and newscasters. He also oversees, the station’s news website, and manages the station's digital news projects. He reports and writes stories for the website and contributes pieces to KERA radio. He's discussed breaking news live on various public radio programs, including The Takeaway, Here & Now and Texas Standard, as well as radio and TV programs in New Zealand and the United Kingdom.