The housing shortage in Texas is worsening despite robust housing construction

Texas’ housing shortage is worsening, and home prices and rents continue to rise due to limited supply even as construction activity increases.

Texas saw a shortage of about 320,000 housing units in 2022, up from 306,000 the previous year, the Texas Tribune reported, citing housing policy organization Up For Growth.

Texas has struggled to keep up with demand despite being the state with the highest housing construction rate in the country. Demand is driven by economic growth and population growth. The shortage is driving up housing costs in major metropolitan areas such as Houston, Dallas-Fort Worth and San Antonio as competition for available housing intensifies.

“Texas has been building intensively, but it is often not enough to keep pace with both in-state demand and out-of-state migration,” said David Garcia, policy director at Up For Growth.

The housing shortage isn’t just in Texas. A federal deficit has driven up housing costs across the country. Up For Growth estimates that 3.8 million homes are needed to improve affordability.

Many Texas cities expanded housing construction, particularly with detached single-family homes in suburban areas. However, high population growth has shown the limits of outward expansion as a long-term solution, Garcia said.

The Austin metro benefited from a surge in housing construction and reduced its deficit by nearly a third. This construction boom has contributed to 16 months of falling rents in the area, although the area still needs 24,000 homes to meet demand.

As housing costs rise, advocates are calling on state and local governments to ease zoning restrictions that restrict higher-density housing options such as townhouses and smaller apartment buildings, which could help increase supply and reduce costs. Texas lawmakers are expected to address zoning and housing affordability issues at their next meeting in Austin.

—Andrew Terrell

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