Dallas Business Journal; Austin Business Journal
By: Brittani Bell
Texas’ ability to maintain comparatively attainable housing amid rapid population growth depends in part on how the infrastructure needed for new communities is financed. Municipal utility districts (MUDs) provide a mechanism to finance water, wastewater, drainage, roads, and other public infrastructure over time rather than embedding the full cost in the price of the first homes built.
At a recent Texas House Land and Resource Management Committee hearing, developers, local government leaders, and infrastructure experts discussed how MUDs can help reduce upfront development costs while supporting responsible growth without shifting the cost of new infrastructure to existing taxpayers.
The impact on housing prices can be significant. Using an industry rule of thumb that a home is priced at roughly four times the finished lot cost, testimony illustrated that a $200,000 lot could translate to an $800,000 home. If MUD financing reduces that finished lot cost to $150,000, the estimated home price could fall to approximately $600,000.
As ABHR’s Steve Robinson summarized, “Simply stated, builders will construct more expensive homes on more expensive lots.”
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