A family buying the median-priced home in Dallas–Fort Worth in February 2026 faced an all-in monthly payment of $3,518. Five years earlier the same purchase cost $1,996 a month, a gap of $1,522. That figure comes from Federal Reserve Bank of Atlanta data compiled in a new report from the Texas Public Policy Foundation. The report argues that local regulation and property taxes are the parts of that bill Texas lawmakers can actually shrink.
The Austin-based foundation, a free-market think tank that favors less regulation and lower property taxes, released the 52-page report, “Exploring the Texas Housing Market: Conditions, Constraints, and Capacity for Development,” on Oct. 28. It was written by John Bonura, Ben Crockett and James Quintero of the foundation’s Taxpayer Protection Project. The group also unveiled an online tool that estimates what local building rules cost new homes, city by city.
The stakes are spelled out in the payment tables. Using the Atlanta Fed’s Home Ownership Affordability Monitor, which adds up mortgage principal and interest, property taxes, homeowners insurance and mortgage insurance on a median-priced home, the report finds the all-in monthly payment rose 76% in Dallas–Fort Worth between February 2021 and February 2026. It rose 72% in Houston, 67% in San Antonio and 51% in Austin. Rising prices and mortgage rates drove most of it: Dallas–Fort Worth’s principal-and-interest line roughly doubled, from $1,128 to $2,251. But the report notes that property taxes and insurance together now make up $1,094 of the Dallas–Fort Worth payment, or 31%. Insurance alone rose from $186 to $339 a month.
The report frames the problem as a shortage. It cites the Texas comptroller’s estimate that the state was about 306,000 homes short of need in 2021, and a 2024 University of Houston Hobby School poll in which 90% of Texans called housing affordability a problem in their area. Statewide, the median sale price stood at $321,000 in January 2026, according to the Texas Real Estate Research Center, down 1.5% from a year earlier and below the 2022 peak of about $360,000.
The authors point to three cost layers. The first is regulation. They cite a 2021 National Association of Home Builders study estimating that government regulation accounts for 23.8% of the price of a typical new single-family home, about $93,870, and a 2022 industry survey putting it at 40.6% of apartment development costs. Both are national figures, not Texas-specific. A separate national builders’ survey shows permit, impact and water-and-sewer fees rising from $3,604 per new home in 1998 to $20,554 in 2024. Impact fees are charges cities levy on new homes to pay for the road, water and sewer capacity that growth requires.
The second is lot size. Citing the National Zoning Atlas, the report finds that 26% of single-family land in the Dallas–Fort Worth area requires lots of at least 80,000 square feet, nearly two acres, the highest share of any major Texas metro. It holds up Houston, which cut minimum lot sizes in 1998 and 2013, as the state’s own evidence that smaller lots allow more starter homes.
The third is property taxes. Drawing on the foundation’s own data, the report says local governments levied about $89.4 billion in 2025 through nearly 5,000 taxing units. Fort Bend County’s levy grew 212.3% from 2021 to 2025, against combined population and inflation growth of 42.1%. Tarrant County was the exception among large counties: its levy grew 4.5%, below its 24.7% population-and-inflation rate.
“90% of Texans consider housing affordability a problem. The state legislature must take steps to rein in local government spending and cut burdensome red tape so the people of Texas can afford to live,” Quintero, the foundation’s policy director, said in a news release.
The report’s proposals for the 2027 session include extending the state’s limits on taxing, borrowing and spending to cities, and tightening the voter-approval tax rate — the cap above which a local government must ask voters — toward the rate that would raise the same revenue as the year before. It also calls for letting homeowners build backyard cottages, known as accessory dwelling units, without special permission, after that bill stalled on the House calendar in 2025. Other proposals are a state dashboard showing whether cities meet legal deadlines for approving plats, and requiring landlords to tell renters how much of the rent goes to property taxes.
The new Texas Housing Regulation Cost Tool, which the foundation links from its release on the Government Reform and Oversight Coalition website, estimates that local rules will add about $11.7 billion to the cost of new Texas housing over the 10 years starting in 2027. That is a median estimate, with a range of roughly $11.1 billion to $12.6 billion. The tool measures 361 of the state’s 1,224 municipalities. Its two largest categories are design and appearance mandates, at about $3 billion, and minimum home-size rules, at about $2.3 billion.
City officials see the question differently. At the Texas Municipal League’s 2025 annual conference, the league’s Mike Martin said zoning and permitting decisions “should be made by the people who live in the city,” according to CandysDirt.com. The report itself concedes that each type of housing rule “contains trade-offs that legitimate public purposes can justify.” It also acknowledges that mortgage rates and insurance pricing, two of the fastest-rising parts of the monthly bill, sit largely outside the state’s control.
The Dispatch has reported on senators’ scrutiny of cities resisting the 2025 housing laws. Bill filing for the 90th Legislature opens Nov. 9. The session convenes in January 2027, when lawmakers will decide whether the foundation’s prescriptions become the next round of housing law.