Legislative Update

THE ONE WHERE IT DIDN’T HAPPEN

The failure of many bills is a win for the apartment industry.

THE 2021 SESSION of the Texas Legislature was a tremendous victory for the apartment business because almost every apartment business-related bill died.

This was an extraordinary legislative session for many reasons, but from an apartment industry perspective, it was an extraordinarily risky one. We have never seen a session with so many bad bills – bills aimed at making it more expensive and difficult to provide rental housing.

Why is this happening?

Much more than the U.S. Congress, the Texas Legislature has historically had a bias toward moderation. The rules, especially in the Texas Senate, were designed to force compromise. For decades, the “two-thirds rule” required the vote of 21 of the 31 senators to bring a bill up for floor debate. For most of the Senate’s history, partisanship wasn’t a factor –there weren’t enough Republicans for partisanship to matter. Other things that separated members did matter, though. It was hard to pass a bill with just rural members or just urban members. It was hard to pass a bill with only liberal Democrats or only conservative Democrats. (Yes, there used to be conservative Democrats.)

In recent years, though, the legislature has grown much more partisan, and the parties have been pulled farther apart by redistricting, social media and other forces that would take more than this column to explore.

Republicans are more conservative while Democrats are more liberal with each passing election. Democrats expected significant gains in the 2020 election, which saw the national defeat of Donald Trump by Joe Biden. President Biden’s national win didn’t help Texas Democrats seeking legislative seats, though, and the 2021 session saw both chambers with significant Republican majorities. The Senate’s “two-thirds rule” has been watered down to a “five-ninths” rule that requires only 19 senators – the precise number of Republican senators – to bring a bill up for debate.

Democratic legislators in seats where Republican challengers are unlikely to be competitive have little to lose from filing anti-business legislation – even when they know it won’t pass. An unsuccessful anti-business bill is something they can show their base as evidence they fought the good fight. Before the 1990s, pro-business Republicans would do the same with lawsuit reform legislation they knew could never break through the plaintiffs’ lawyers’ grip on the state senate.

Additionally, the pandemic created a new political concept, buoyed by the CARES Act and the CDC Eviction Moratorium, that it simply isn’t fair for people to have to pay for housing in difficult times – that housing providers should be required to provide apartments free of charge. Remember that the CDC Moratorium came from Republican President Trump’s administration and that the CARES Act was adopted by a majority Republican U.S. Senate.

The concept of the government requiring property owners to provide housing for free has been found unconstitutional by court after court, but with rulings that haven’t applied beyond the parties to each case while endless appeals have continued to creep through the court system.

In this environment, anti-apartment bills are not surprising, and are likely to increase in number and severity in future legislative sessions.

The Houston Apartment Association Political Action Committee is the PAC of the Houston Apartment Association, a non-profit trade association representing the area apartment industry. Without political capital, our industry would not be as successful in representing you or your clients’ interests, and thus, your financial well-being. The HAAPAC participates in local and state political campaigns, helping candidates who support the apartment industry and its supplier businesses. You can participate in the HAAPAC on several levels.

With a lot of hard work by the Texas Apartment Association and its members, bills defeated in the Texas Legislature this year included:

• H.B. 279 to prohibit pet deposits and pet rent

• H.B. 886 to allow cities to mandate Section 8 participation

• H.B. 1099 to restrict property tax protests

• H.B. 1101, H.B. 3939 to require mandatory sales price disclosure to appraisal districts

• H.B. 1470, S.B. 265 to mandate Section 8 participation statewide

• H.B. 1532, H.B. 3036 to prohibit evictions during a pandemic

• H.B. 2801 to allow residents to evade eviction by paying rent up to 30 days late

• H.B. 1647, S.B. 558, H.B. 3903 to restrict access to eviction records

• S.B. 1288, H.B. 4410 to restrict the use of criminal history information

• H.B. 3882 to make landlords always responsible for bedbugs

• H.B. 4104 to allow the termination of student housing leases after a disaster

• H.B. 4039 (the omnibus anti-apartment bill)

• H.B. 4444 to allow counties to enact eviction moratoria

One bill that did pass is H.B. 531, which will require an owner to disclose if a unit is in a floodplain or if the landlord has actual knowledge of flooding. Violation may allow the resident to terminate the lease. This was a compromise to which the industry agreed, and TAA will have language in the next edition of its standard lease to make this easier.

We are also happy to report the passage of S.B. 237, which will give police officers the option of writing a ticket or making an arrest for criminal trespass – a proposal we think will make it more likely that trespassers on our properties will be cited, rather than simply shooed away.

The industry owes thanks to Steve Moore, owner of Villa Serena Communities, who has advocated tirelessly for this bill for the past six years and traveled to Austin to testify in numerous committee hearings.

Want to help choose the officials who make water and sewer rate decisions for your property? Contribute to the HAA Political Action Committee and get involved! Find more information at www.haaonline.org/haapac.

If you have a regulatory problem or question, call the HAA main line at 713-595-0300 and ask for Public Affairs.