February 29, 2024
AUSTIN – Texas’ multibillion-dollar property tax cut package will provide homeowners $18 billion in property tax relief over the next two years, but some lawmakers and policy experts say there is no guarantee that the package will reduce housing costs for renters, reports the Houston Chronicle.
The question of whether renters will see any property tax relief depends on the dynamics in each local housing market, Texas Real Estate Research Center Research Economist Lynn Krebs, Ph.D. told the Chronicle.
“It really just comes down to what’s driving the market,” he said.
In places with lots of vacant rentals, where landlords would need to offer lower rent or other incentives to attract tenants, “then it seems perfectly logical that the lower property tax burden will give them the ability to do that, and they would do that” to prevent the property from going uninhabited, Krebs said.
But without those market pressures, Krebs said, there’s nothing to force the savings onto renters as long as the market “is demanding housing at higher or current rates.”
“If there’s a serious housing shortage, as there has been in recent times in a lot of markets, then it would be reasonable to expect that landlords would really have no need, or reason, to lower their rents,” he said.
Across the state, renters occupy about three out of every eight households, including more than half of those in Texas’ largest cities, according to U.S. Census Bureau estimates.