SB840 & Executive Order “Housing”
Executive Order (EO for short) that came before 21st Century ROAD to Housing Bill and “Statistics” as the lever to get change on demand
Mark Twain is the man who mouthed a quote known around the world “There are lies, damed lies and statistics.”
Well today’s we’re gonna ask about the “stats” that held up the story to make the case for SB840. I’ve written about the “Up for Growth” report, the smoking gun used to light the fire in the 89th Legislation Session. Remember Texas Comptroller’s report sayin… “we’re short 300,000 housing units?”
No word about the millions of people who just “appeared” in the US from all corners of the world. No word about the rampant inflation and its impact on construction, financing and remodeling costs. What about the “historically low interest rates” that created the best incentive ever to not sell?
The storyline was really focused on The Crisis. We sure have found ourselves living through crisis, after crisis, after crisis. What does that mean for “typical times?” You gotta wonder. Since we’re all still in the rodeo ring (metaphorically) let’s jump to Exhibit A. “The Typical First-Time Homebuyer Today…”
Source: First American Title
Those green arrows show the 32ish age vs. the 40. NAR showed a jump way up to get to 38 then 40. Look at the other sources, you see what I see? That’s right, Nothing even close. NAR, National Association of Realtors, I think you have some “explaining” to do. That bit about nearly 40 ain’t true.
So now let’s jump into action on the new Executive Order with a focus on homes, not apartments, condos etc. The EO says “new housing” that is matches the same song being sung from the 21st Century ROAD to Housing Act which contradicts the expert Patrick Condon I’ve written about that “adding supply does not work” and points to Vancouver as a 40-year experiment.
Trump’s Executive Order: Bucking Bronco!
This week a White House announcement was made to say “HEY, Y’ALL WANT TO SEE MORE SINGLE FAMLY HOUSING? Ok maybe it didn’t quite go like that but I wanna have some fun while explaining it. Here’s a link for starters so you can see it yourself. For starters:
Sec 1 Purpose. “The American dream of homeownership depends on a dynamic housing market in which a varied inventory of new homes is built and renovated each year. Layers of unnecessary regulatory barriers, slow permitting processes, and onerous mandates at all levels of government have delayed construction, restricted development, and driven up the costs of new housing. These constraints have made housing less affordable for many Americans.”
My commentary? Look at that…”layers of unnecessary regulatory barriers…at ALL LEVELS of government.” Why, that is not just pointing a finger at zoning is it? Ask the authors of SB840 how their bills solved for issues other than just zoning…answer is “none.” The set the stage to make “zoning” the bad guy and then had big named entities support that story. Let’s keep on going.
Sec. 2. “Targeting Federal Regulatory Barriers to Residential Development. (a) The Secretary of the Army, acting through the Assistant Secretary of the Army for Civil Works, and the Administrator of the Environmental Protection Agency shall review and revise requirements related to stormwater, wetlands, lakes, rivers, and other bodies of water to reduce housing construction and ownership costs, streamline regulatory and agency decision-making processes, reduce property tax burdens, and increase insurability, as appropriate and consistent with applicable law.“
My commentary? Insurance. This ties directly to that little thing called WUI, Wildland Urban Interface. And don’t forget that WUI is part of FEMA and that FEMA oversees the flood stuff. Next up: HUD.
(b) “The Secretary of Commerce, the Secretary of Housing and Urban Development, the Secretary of Transportation, and the Director of the Federal Housing Finance Agency (FHFA) shall, within their respective authorities, consider eliminating unduly burdensome rules and reforming programs that constrain residential development and impede housing affordability, especially the construction of affordable single-family homes as well as suburban and exurban neighborhoods, including, as needed…”:
My commentary? HUD is embedded in just about every city in the US. Their goodies are far too tempting for local governments to not take the money…so if HUD is in your town this will have an influence. HUD holds a lot of reins. And the part “especially the construction of affordable single-family homes” is a real switch out from SB840 and even HB24 which changed the rules on notification for multifamily projects so people couldn’t really fight the fight. On that very note, the study The Distaste for Housing Density shows a whopping 2/3rd or 66% of people do not like high density housing near them. Wow, that’s a stat.
HUD Is Involved
(c) “The Secretary of Agriculture, the Secretary of Housing and Urban Development, the Secretary of Energy, and the Director of FHFA shall, within their respective authorities, take appropriate action to reform and, where appropriate, eliminate unduly burdensome or costly energy-efficiency, water-use, or alternative-energy requirements regarding housing, including manufactured housing, to the maximum extent practicable and consistent with applicable law.”
My commentary? Energy is central to the policy change, a pendulum shift. Notice the shout out for “manufactured housing?” Why that’s just in time for SB782. I’ll be chatting about that soon enough - it goes into effect July.
Sec. 3. “Streamlining Federal Permitting Requirements for Residential Development. (a) The Chairman of the Council on Environmental Quality shall provide guidance to executive departments and agencies (agencies) on implementing the National Environmental Policy Act of 1969, including through the establishment, adoption, or application of categorical exclusions, in a manner that maximally exempts or reduces burdens on housing construction, preservation, adaptive re-use, and infrastructure that facilitates housing construction, such as roads, water, sewer, and other projects.”
My commentary? Taxes are talked about - how single family doesn’t pay enough and how inefficient it is to build the infrastructure to serve the homes. Ok, maybe this changes things. Also, I’d counter that I’d sure like to see a service per block with an easy way to see house vs. apartment. Just what does it take to serve services cities? And why is everything a “head count” so why would it matter if you have to drive your car or truck with your city logo another 100 feet? Personally, I see all the “number of miles on a police car” as a way to get Flock cameras into your city. That’s definitely the case where I abode.
Trump’s Circling Back to Opportunity Zones
Sec. 5. Facilitating New Residential Construction in Opportunity Zones. (a) The Secretary of the Treasury and the Secretary of Housing and Urban Development shall jointly evaluate Administration actions to better align programs and incentives with the Opportunity Zone tax incentives to expand investment in single-family home construction, including considering lawful mechanisms to link grants, financing tools, or other incentives with new or increased investment in Qualified Opportunity Funds engaged in the development and sale of single-family homes.
My commentary? You may just see single family homes and not just apartments in those rarely talked about “zones” for opportunities. They’ve been around for 10 years but you need write offs from investments that have done well to participate. I don’t think that has been the case. Let’s see what happens with this now. Will land in an opportunity zone have to allow for Single Family Homes? Kinda a reverse SB840 if you ask me!
Rounding Up The EO
This EO is gonna have a real “draw” for competing capital. Which will win out? The large apartments business model or the single family neighborhoods? There’s definitely something else about that Study I’ve citing over and over called “Distaste for Housing Density.” Turns out folks really don’t like it and that study is only tell a story from a perspective and statistics using 194 acres and ½ unit increase in density per acre. Gee with SB840, it shot right to the moon at a MUCH higher rate than that. And, forget having that much land to “distribute” the density over…we’re talking right next door, right across the street just about everywhere has been upzoned.
Tying this back to SB840, the state legislatures pitted the local city councils against the State and left the homeowners caught in the middle. Some cities - and this is our list - didn’t bend to the SB840 overreach without making it known they had reason to protect homeowners and their biggest investment. The 5 rated as providing protections are:
Arlington
Grand Prairie
Irving
McKinney
Plano
We offer a city list with handouts by city on the right-hand side of our Resources page.
The 21st Century ROAD to Housing Act
Does the EO from way back in May even matter now that in July, this bill got passed? I can’t say I know. It may be that is just started the engine down the tracks to get tot his bill. And boy oh boy what a whopper of items is packed into this bill.
I’ll be writing a “head ups” review in my upcoming piece for Building Savvy. For now, I want you to know that It touches on the heart of the American dream: single family living. This folks is now a real national story, not just Texas. It is unfolding before our very eyes.
As to how the bill was voted by Texan representatives, I can tell you that the following representatives in Texas voted “no”:
Roy Chip
Michael Cloud
Brandon Gill
Morgan Luttrell
Keith Self
The total number in the 400+ membership that voted “no” was just 32. Texas had 5 of them. Why is there so much support for making a federal case out of zoning? I gotta tell you that it has to do with money and control. You know, our country relies upon its “population” to swing districts for voting, not zoning. But if you add more “housing” in certain locations, it begs the question: which districts for voting get more votes?
Let’s see…
These are beautiful horses…let’s make a special place in our hearts for the beauty around us.
