Texas Earns B+ on its 2025 Housing Affordability Report Card

Texas Lawmakers Make Strides Toward Housing Solutions While Challenges Remain

Austin, TX – The Texas Affiliation of Affordable Housing Providers (TAAHP) has unveiled its 2025 Legislative Report Card, assigning the 89th Texas Legislature an overall grade of “B+” for their efforts to enhance housing affordability. State leaders have made commendable strides in tackling the escalating housing crisis, yet there is still work to be done.

Housing affordability was a clear priority this session, with lawmakers filing more than 100 related bills, many with bipartisan support. Several key measures passed, reflecting a concerted effort to broaden access, reduce bureaucratic hurdles and foster confidence in tax-supported housing initiatives. In many respects, the Legislature made progress, though some areas remain unresolved.

One of the session’s major accomplishments was Senate Bill 2137, authored by Sen. José Menéndez (D – San Antonio) and sponsored in the House by Rep. Cunningham (R – Humble). The bill removes public school performance ratings from the scoring and eligibility criteria used by the Texas Department of Housing and Community Affairs (TDHCA) to evaluate Housing Tax Credit applications. The temporary change applies to the 2026 and 2027 allocation cycles and requires TDHCA to study the policy’s long-term impact.

“SB 2137 shows what is possible when lawmakers listen to data, context and community need,” said Roger Arriaga, Executive Director of TAAHP. “The bill ensures that families are not penalized for school ratings that may be outdated or irrelevant in an era of open enrollment, school choice and assessment reform.”

House Bill 21, filed by Rep. Gary Gates (R – Rosenberg), addressed the misuse of some Housing Finance Corporations (HFCs) by removing their ability to remove properties from the local tax rolls in areas outside of their established boundaries. While TAAHP supported this goal, the bill’s broad, retroactive rules and costly audits have created financial uncertainty for developers and investors, risking slower affordable housing production and could threaten existing projects. Accountability is important, but one-size-fits-all mandates may hinder Texas’ ability to meet its growing housing needs.

“The attention to affordability marks a vital step forward,” said Nathan Kelley, President of TAAHP. “The Legislature has made substantial progress in reducing barriers, increasing flexibility and restoring public trust in housing initiatives. However, we must recognize that too many Texans are still struggling to find affordable housing.”

Lawmakers also tackled housing supply through zoning and land-use reforms. Several new laws make it easier to build homes where Texans need them most:

• SB 840 and SB 2477 clear the way for housing in commercial zones and empty offices
• HB 24 curbs zoning vetoes by requiring broader support to block proposed housing.
• SB 15 scraps minimum lot size rules that blocked smaller homes
• SB 2835 allows safe, six-story single-stair apartment buildings

•  SB 1883brings more transparency to development impact fees

These changes modernize how Texas plans and builds, making it easier and faster to get new homes on the ground.

Still, critical solutions failed to cross the finish line. A bipartisan proposal to raise the per-development cap on 9% housing tax credit developments – from $2 million to $3 million – fell short, despite the cap remaining unchanged since 2016. Other bills aimed at appraisal reform, local scoring rule clarification and improvements to the 4% Resolution of No Objection process also stalled late in the session.

These missed opportunities come as more Texans face growing challenges in finding affordable, stable housing. Nearly half of all Texas households are renters, and more than half of renters are spending more than 30% of their income just to remain housed – putting essential workers at risk of being priced out of the communities they serve, turning the dream of homeownership into a distant reality.

“If Texas wants to stay competitive, we need to protect affordability and help renters find stable housing they can afford,” said Kelley. “TAAHP is excited to see the State’s focus on affordability and will continue working with lawmakers to shape a comprehensive housing strategy ahead of the next session, one that includes all Texans.”

 

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The Texas Affiliation of Affordable Housing Providers (TAAHP) is a non-profit trade association serving affordable housing industry providers. TAAHP works to increase the supply and quality of affordable housing for Texans with limited incomes and special needs. Founded in 1997, TAAHP is considered the “Voice of Affordable Housing in Texas,” and represents housing industry professionals involved in the financing, design, development, and management of affordable housing communities in Texas through public/private partnerships. TAAHP members produce tens of thousands of award-winning affordable housing communities with state-of-the-art designs, amenities, and resident services. For more information, visit www.taahp.org.