Local government overregulation of the housing market hurts consumers, lessens supply, and denies choices to the individual. One example of this heavy-handed approach involves municipal regulation of accessory dwelling units (ADUs), which are houses or apartments built on the same lot as a larger residential home.
Commonly, cities harshly regulate or prohibit the construction of ADUs, and this regulation puts these units out of reach for many Texans. The resulting effect of this policy is that the housing supply is artificially constrained, and the area workforce is left with higher prices and fewer choices.
By limiting or removing municipal regulation of ADUs, the Texas Legislature will provide property owners with some unique advantages. For example, property owners who choose to seize this opportunity can gain a new passive income source by renting out their ADUs. ADUs can also serve as a way for elderly family members—who typically downsize after their nest empties—to live near family, while also maintaining independence and privacy. Other property owners can benefit from increased home equity by building an improvement that adds to the value of the entire property.