Texas

Will The Housing Crisis In Texas Get Worse?

More Texans have been struggling with housing costs driven by factors such as market dynamics, construction prices, and even algorithms, and this problem may continue in the future.

According to The Texas Tribune, Texas housing prices are above where they were before the COVID-19 pandemic, and the number of Texans struggling to find affordable housing is higher than ever.

The current financial climate exacerbates these problems. High interest rates and cautious banks make new commercial real estate loans scarce. Additionally, the costs of building materials, operating expenses, insurance, and property taxes have not returned to pre-pandemic levels, making new housing projects less financially viable.

Other factors such as algorithms are contributing to rising housing prices. Property management software RealPage has been under FBI scrutiny for inflating rent prices.

“[The software]works by giving you a recommendation for how to price a given unit in your building,” Maureen Tkacik, investigations editor for the American Prospect, who reported the case, told Texas Standard. “What the FBI and investigators have realized is that it acts more like a cartel. You’re not really given a choice whether you want to take RealPage’s recommendations. They will put a lot of pressure on you if you try to price your apartment lower.”

According to the Dallas Morning News, in places like Dallas-Fort Worth, where apartment construction has been booming, there is a notable slowdown. This has led to a softening in rent prices and growth, but fewer new apartments are starting construction, which could worsen the affordability problem in the long term.

In other places, such as Austin, home prices are falling. According to the Tribune, home prices in Austin have fallen for 16 straight months, but residents still haven’t seen substantial income growth.

For some experts, the solution to the housing crisis is to first solve the ongoing financial uncertainty.

Caitlin Sugrue Walter of the National Multifamily Housing Council said that: “We are really setting ourselves up to continue this affordability problem if things don’t get sorted out on the financial side.”

On the other hand, housing advocates have said city rules limiting how many homes can be built on a given lot are leading to higher housing costs.

RA Staff

Written by RA News staff.

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