For every $1,000 increase in the price of a home, 2,800 households in the Dallas-Fort Worth-Arlington area are priced out of the market.
With housing affordability on track to be the No. 1 crisis in Texas in the coming years, people are seeking solutions to help combat the surge in prices and demand.
Four panelists gathered at Texas Wesleyan University to discuss solutions for housing affordability in Fort Worth as part of the Fort Worth Report’s Candid Conversation event on June 23.
Some of the many factors aggravating the market include supply chain delays, rising interest rates and competition from investors willing to pay huge amounts in cash for properties. As a result, the median price of a home resale — traditionally two-thirds that of a new home — is now higher than for new construction.
This combination of factors has dramatically decreased available housing inventory, which particularly hurts first-time homebuyers, Carlene Thomas-King, owner of Tybrion Realty, said.
“This is the most frustrating time in all my years of being in real estate,” Thomas-King said. “Our clients are not able to compete with the investors that have cash in their pockets, even those that are approved. We’re not even assessed.”
The panelists struggled to offer solutions for the overwhelming problem but suggested the city could use existing tools to a fuller extent.
The city of Fort Worth tries to encourage various mixed-income housing options. Amy Connolly, assistant director for the city of Fort Worth’s Neighborhood Services, said the City Council can offer incentives for developers to set aside affordable housing units or lots.
That includes using the Fort Worth Housing Finance Corp. to subsidize housing developments.
“We can provide affordable housing to people for a period of 30 to 50 years. That’s a long time,” she said. “We need to use all the tools that we already have and use them to the most extent that we have.”
Connolly also encouraged aligning city policies with federal and state policies that allow municipalities to receive more federal tax credits. She also suggested zoning property in the city in a way that allows for a more diverse housing mix.
“You’ve got to make each individual development work. And so we have to look at opportunities to provide incentives to developers that are providing affordable housing,” Connolly said.
Incentives can be as simple as getting a density bonus for building affordable units, which means more units can be built on a site. Or the city could buy property and then provide that property as part of an affordable housing development deal at a reduced, non-market price, Connolly said.
That could help reduce the cost of developing such a property.
“It all has to make financial sense. it has to work financially. A bank has to be willing to finance it. So there are all kinds of factors that go into it,” she said.
Ann Zadeh, executive director at Community Design Fort Worth, said different housing types — like townhomes, condominiums, and duplexes — are one way to provide more affordable housing options.
“If you have all the types of housing, then you are providing a product for someone to live in the way that they want to live,” she said.
She also emphasized public transit as a way to help people get to jobs so they can afford their homes and their gas expenses.
Don Allen, future president of the Texas Association of Builders, said developers are struggling with spiraling costs and delays in construction.
“As a developer and builder, we’re generally mostly reactive to the market, and our role is to provide housing in whatever shape, fashion or form the market generally wants,” Allen said. “What drives a lot of development is where services and where things are.”
The city of Fort Worth is working on an infill chapter in the city’s subdivision ordinance to make development inside the central city core easier, said Travis Clegg of the Real Estate Council of Greater Fort Worth and the event’s moderator.
Clegg said when a real estate agent or developer comes into the city core to develop a property, it can take years for it to get a project done.
“A lot of developers don’t want to come into the downtown area. It’s too difficult to develop. There are too many restrictions and rules,” he said.
During a question-and-answer period, audience member Craig Hulse, director of economic development at the city of North Richland Hills, asked whether the city of Fort Worth would put in place any regulations or restrictions on investment buyers purchasing over half of the homes in Tarrant County to turn into rentals. He cited similar work done in Canada and in Dallas.
The panelists said laws and court rulings prevent government action on the problem. Some builders have tried to stop selling to out-of-market investors, but it can be hard to differentiate between an investor and a traditional homebuyer, Allen said.
“What we see right now is basically a lot of institutional money is building entire subdivisions to be investment/rental communities, and they’re essentially competing with us,” Allen said. “And so we’re not real happy about that as an industry, and it’s something that we do struggle with.”
Sandra Sadek is a Report for America corps member, covering growth for the Fort Worth Report. You can contact her at firstname.lastname@example.org or on Twitter at @ssadek19. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.