It's NIMBY versus YIMBY as potential buyers and investors are caught in the middle
Improving affordability has been one of the big talking points by politicians at both the state and federal levels. There has been talk of President Trump declaring a housing emergency to try to tackle the issue.
At the state level, some progress has been made in reducing red tape, which has helped more housing developments be built in cities where housing shortages have been a major issue. However, some cities are fighting those regulations.
One such case is unfolding in Texas, where the state government passed a bipartisan bill to allow multifamily housing developments in areas zoned for commercial use. One rental economist pointed out that the law is being met with local resistance.
Jay Parsons (pictured top) is a rental economist who previously spent more than 15 years at RealPage, Inc. He now runs his own consulting firm and is an economic advisor for JPI, a real estate company in Dallas. He noted on his LinkedIn page on Wednesday that cities in Texas are imposing significant restrictions to prevent those multifamily structures from being built easily.
“Cities like to think they know what's best for their city, but many of them have dated stereotypes of renters and rental housing,” Parsons told Mortgage Professional America. “They need quality rental housing to make it affordable for the teachers, firefighters, and retail workers who are critical to any city. The best thing they can do is focus on how to ensure more quality housing gets built, and to reduce obstacles and red tape to making it happen.”
City restrictions
He noted in a LinkedIn post that The Texas Tribune reported on some of these restrictions, which could prevent the construction of these multifamily properties. This impacts the commercial market because companies are less likely to build in these areas, and it affects the consumer space as ongoing housing shortages will keep home prices higher.
“New apartments in Irving must have at least eight floors (no garden properties!),” Parsons noted in his post. “The Texas Tribune reported buildings also ‘must include a swimming pool, a dog park, a gym and a workspace for remote workers. Builders must also pick from a menu of amenities to add, such as a yoga room, a place to wash pets or cars or a station for cyclists to repair their bikes.’”
Similar laws were passed in Arlington, where apartment builders were required to include certain amenities like swimming pools or basketball courts, and at least 15% of parking spots must include electric vehicle charging stations.
In Frisco, the city changed its zoning code to allow heavy industry in the same areas where these multifamily properties could be built. Even though it is unlikely the city would actually approve heavy industry in those areas, it could be enough to scare off any developers.
He noted that the cities in Texas were following a playbook similar to how Los Angeles has limited the types of properties that can be built.
“When you choke off housing, you drive up housing costs in the long run,” Parsons said. “Then, maybe decades from now, you'll have a housing shortage and an affordability crisis. And, like Los Angeles, you'll blame everyone but yourselves and your anti-housing policies.”
Parsons said the challenges of affordability are an ongoing battle between those in higher-income brackets and lower-income customers.
“The reality is affordability is a bifurcated issue of haves and have-nots,” he said. “Census data shows us renter households making more than $50,000 spend only 22% of income on rent, whereas lower-income households spend 53%. The good news is that wage growth has outpaced rent growth for almost three years, so at the top half of the market, affordability is not a major headwind for renters spending 22% of income on rent. But there are still challenges at the lower end of the market.”
Help on the way?
Despite pushback from cities and other local governments, states will continue to try to alleviate the housing affordability issue. It then becomes a battle between those who would say yes and those who would say no to projects in their backyards.
“The YIMBY movement has made major gains, particularly within state government,” Parsons said. “State legislators in states both red and blue are increasingly educated on how the only way to solve the housing affordability and availability issues is to build more housing.”
Kimber White returned as president of NAMB with a clear mission. He aimed to tackle housing affordability by urging changes to loan-level price adjustments and calling for practical government solutions to help first-time buyers.https://t.co/fyyruihgIB
— Mortgage Professional America Magazine (@MPAMagazineUS) October 13, 2025
If cities and states continue to battle on the issue, the federal government may step in. In addition to a possible housing emergency, Parsons noted that the federal government has more options at its disposal to both force changes and provide assistance.
“It's difficult because housing is mostly a local issue, but the federal government does have tools it can use,” he said. “In particular, the federal government could set rules around the use of federal tax dollars to build housing, especially affordable housing via the Low Income Housing Tax Credit.
“That could include things like preventing states and cities from layering in additional requirements of developers that would raise the costs of construction, making federal spending more efficient and resulting more units built. The expansion of LIHTC and Opportunity Zones in the Big Beautiful Bill is also impactful.”
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