Greg Abbott Threatens to Withhold Tax Revenue from Defiant Cities

Governor Greg Abbott announced plans to penalize Texas cities that obstruct state housing affordability laws, specifically targeting municipalities in the Dallas-Fort Worth region. During a campaign stop in Round Rock, Abbott accused several cities of skirting legislation by implementing local rules that discourage the construction of new homes. He intends to pursue legislation that would withhold sales tax revenue from cities or counties that violate these laws.

This conflict follows the implementation of Senate Bill 840 and Senate Bill 15, which loosened zoning regulations to increase housing supply. Since September 1, SB 840 has enabled at least 8,400 apartments across 19 of the state's largest cities, including the redevelopment of a retail center into the 1,000-unit Pepper Square project in North Dallas. However, suburbs like Irving, Arlington, Plano, and Grand Prairie have resisted by mandating luxury amenities, such as Olympic-sized swimming pools and specific height thresholds, to curb development.

In addition to tax penalties, Abbott signaled his intent to grant homeowners the automatic right to build accessory dwelling units in their backyards. State Representative Gary Gates has also indicated that the next legislative session will focus on further curbing local obstruction tactics used by cities to thwart state-mandated growth.