as they tussle over whether homeowners or businesses should get a bigger break on their property taxes.
Some Republicans and tax policy experts have occasionally argued that renters would see relief from rising rent bills if lawmakers send a certain amount of money to school districts so they can lower their tax rates, a break legislators call “tax rate compression.” It’s difficult to measure how much renters would benefit from compression. Property taxes make up about 20% of every rent dollar paid by Texas tenants, according to figures provided by the Texas Apartment Association — though that percentage can be higher in the state’s urban areas. If a landlord’s property taxes don’t climb as quickly as a result of tax cuts, the thinking goes, their tenants’ rents won’t rise as fast either.
“Property taxes are currently the single largest expense for rental housing owners in Texas, and we welcome all efforts to address those rising costs,” said Chris Newton, the Texas Apartment Association’s executive vice president. “It will come as no surprise that other expenses that contribute to market rents, such as insurance, building materials, equipment and labor, are also increasing and have risen sharply over the past several years.
If lawmakers want to provide meaningful tax relief to homeowners and renters alike, they should loosen local restrictions that some housing advocates say get in the way of building new housing, Barrett said — which would spread the property tax burden among a greater number of households. Such measures“We should be seeking to lower the value of property by making it easier to build things,” Barrett said. “That is where that relief should come from.