88th Texas Legislative Wrap Up

The 88th Session of the Texas Legislature was a success for the members of TAA. TAA was victorious in ensuring that no new mandates or regulatory burdens were imposed upon the rental housing industry. Only one new legal cause of action affecting the industry passed – HB 567, the “Crown Act”, which TAA did not oppose and is a broad anti-discrimination bill that prohibits discrimination in employment, education and housing opportunities based on hair texture or protective hairstyles.

As you may recall, TAA reported there was a record number of bills specifically aimed at the rental housing industry introduced this session. Indeed, the vast majority of TAA’s time and effort this session was devoted to killing as many of these bills as possible and mitigating the adverse effects of those bills that had momentum moving through the process.

TAA was also victorious in getting its priority bills passed into law that will (1) restore consistency to the eviction process and other local governmental regulation (HB 2127) and (2) set appropriate guardrails for creating more workforce housing supply through public facility corporation (HB 2071).  The Texas Legislature and the Governor supported TAA’s priorities that will keep Texas a leader for the rental housing industry. Even though tenant advocacy groups will continue to be more vocal and aggressive seeking to prolong and overly complicate the eviction process, attempting to create new operational and legal mandates or impose governmental controls on payments or pricing, TAA’s zealous advocacy during the 88th legislative session ensured that the laws governing rental housing in Texas are consistent, fair and lead to more housing opportunities for all Texans.

SESSIONS BY THE NUMBERS

8,046 bills were filed | 1,246 bills were passed (15% passage rate). Click here to view bill statistics from previous sessions.

Governor Abbott vetoed 76 bills by the end of the veto period on Sunday, June 18. This is the 2nd highest number of vetoed bills in Texas history. Although none of the bills vetoed by the governor were part of TAA’s legislative agenda, two of the vetoed bills would have impacted rental housing:

• HB 3405 would have made changes to laws governing repairs requested by tenants and the return of security deposits.
• SB 1979, as amended, would have directed the Texas A&M Real Estate Research Center to annually compile a report related to purchases of single- family homes made by corporate or institutional buyers.

2024-2025 BUDGET

For the 2024-25 biennium, $321.3 billion for financing the Texas state budget was approved by legislators on Saturday, May 27. Of that amount, $144.1 billion was from general revenue, the fund that comes mainly from state taxes and which the Legislature has the most direct control over. The budget as signed into law set aside funds for extensive property tax relief, the primary issue the Legislature is taking up during special session. As of the date of this publication, the plan is to achieve the largest property tax cut in Texas History including $12 billion to buy down school tax rates for all types of properties and containing another $5 billion dollars for an increase in the homestead exemption, as well as funds set aside for a franchise tax cut for small businesses.

TAA PRIORITY ISSUES – 2 HUGE VICTORIES; 1 LOSS

HB 2127 – Local Regulatory Consistency (Preemption)

Authors:
Representative Dustin Burrows (R-Lubbock)
Senator Brandon Creighton (R-Conroe)

What Happened – HB 2127, also known as the Texas Regulatory Consistency Act, was signed into law. It directs local governments to forgo regulating issues that are already addressed at the state level – and it specifically preempts local regulation of evictions. Under the bill, cities cannot enforce ordinances that delay evictions or add requirements to the process.

Effective September 1, this bill will restore consistency in the eviction process by preempting local government regulation. It invalidates the Austin, Dallas and San Marcos notice to cure ordinances and others.

It also bars cities and counties from issuing local ordinances that go further than what’s allowed under state law, including labor, agriculture, natural resources, and the property code.

Why it matters – This bill provides regulatory stability and certainty that enables businesses owners to expand and grow to other cities within Texas without inconsistent and burdensome regulation thereby creating a better environment for the rental housing industry and other businesses. It creates a level playing field across the state of Texas, by limiting local municipalities from imposing restrictions on local businesses, specifically noting that evictions may no longer be regulated at the local level which was TAA’s number one priority this session.

HB 2071 – Public Facility Corporations (“PFC’s”)

Authors:
Representative Jacey Jetton (R-Katy)
Senator Paul Bettencourt (R-Houston)

What Happened – The Legislature approved a bill in 2015 allowing PFC’s to own multifamily properties without paying property taxes provided the property was utilized for affordable housing as defined by the law. In the years since the law’s passage, concerns have arisen regarding inconsistent application of the program’s affordability requirements, PFC’s owning properties outside of their jurisdiction and regulatory oversight.

In response, the Legislature passed HB 2071 this session, effective as of June 18. HB 2071 preserved the PFC option for multifamily properties while adding several new guardrails to ensure consistent application of the law and provide more accountability. New program guardrails include:

• Jurisdiction Limits – PFC’s may only own properties located within their jurisdiction
• Notice Requirements – Local taxing officials must receive 30 days notice
• Affordability Requirements – 10% of units must be reserved for residents with incomes of 60% of AMI. 40% of units must be reserved for residents with incomes of 80% AMI
• Rent Rate Limits
• Audits – PFC’s must obtain an independent compliance audit to submit to the Texas Department of Housing & Community Affairs

Why It Matters – TAA has traditionally supported measures designed to accelerate the development and delivery of rental housing properties. Although PFC’s may not be the appropriate approach for all multifamily properties, the program’s options may help deliver needed workforce housing while ensuring transparency and accountability.

SB 767 – City Fee Transparency

Authors:
Representative J.M. Lozano (R-Kingsville)
Senator Tan Parker (R-Flower Mound)

What Happened – SB 767 failed to pass the Texas House of Representatives in the waning days of session because of a technicality that had nothing to do with the substance of the bill. The bill would have required local governments to provide better transparency when it comes to proposing and adopting new or increased fees by requiring a fee schedule on the beginning of the budget, separate votes on the fee schedule, and email notification of new or increased fees.

Why it Matters – TAA members have felt negatively impacted by fees that local governments have enacted and enforced with little public notice, input, or transparency. TAA will continue to advocate on this issue by shining a light on city budgeting and supporting measures that provide common sense solutions for the public to have notice and an opportunity to comment before the city fees are implemented.

DEFENSIVE WINS – TAA SUCCESSFULLY OPPOSED 50+ BILLS

What Happened – TAA successfully opposed more than 50 bills that would have negatively affected your ability to do business, including an omnibus tenant bill of rights (HB 2516). A few of the other major bills that failed include:

• RIGHT TO CURE: HB 673 would have created a seven-day window for tenants to cure lease violations before a Notice to Vacate could be delivered.
• EVICTION SCREENING: HB 511, HB 1450, HB 2516, and HB 3644 all would have limited access to eviction records for tenant screening and created new legal causes of action for violations.
• SOURCE OF INCOME: HB 1148, HB 1470, HB 3038, HB 3277, HB 4103, SB 265 and SB 570 would have mandated acceptance of rent payments from specific sources of income.
• A/C REQUIREMENTS: HB 2592 would have required air conditioning service for all rental housing units.
• CABLE/INTERNET BUNDLING: SB 974 would have prohibited the bundling of cable / internet services by property owners.
• REGULATION OF RENTS: HB 289 would have required any payments received be first applied to past due rent first; HB 143 would have created rent control of self-storage units and HB 2910 would have instituted rent control for residents age 65 and up.
• LANDLORD ACCESS: HB 1820 would have established statutory requirements for when and how a property owner or their representative can access their property.

Why It Matters – Successfully opposing these measures is important because it is a near certainty that many, if not all, will be introduced again in the 2025 session of the Texas Legislature. Although members of the Legislature may change between now and then, TAA’s responses to these issues will set a benchmark for their consideration in 2025. TAA staff and volunteers will use the interim period before the next legislative session to hone our response to these measures and ensure elected officials are aware of our position on these issues. TAA’s successful opposition to these types of bills also helps demonstrate the value and importance of TAA’s active and robust approach to advocacy.