While we celebrate the Christmas season, hardworking Texans, who we all depend on to teach our children, respond to emergencies, and staff our hospitals, are fretting about where they will live when a recently passed housing bill takes effect in 2026.

Born out of a surge in NIMBY (“not in my backyard”) politics and fueled by a self-interested landlord lawmaker, HB21 threatens to deepen the state’s housing crisis by restricting housing options—targeting affordable developments and the families who depend on them.

The drastic changes in housing policy will have particularly devastating consequences for underserved communities across the state. Texas’s Latino community is a prime example. State data shows that a substantial portion of Texans who rely on income-restricted housing are Latino, and many of the neighborhoods where these developments are located are historically Latino areas already grappling with rising rents and stagnant wages.

In particular, a retroactive tax that is part of the law threatens to wipe out the affordability that has allowed these families to stay rooted in their communities, pushing them toward displacement at a scale not seen in years.

HB21 was pitched as a needed reform to deliver clarity and accountability to Texas’s affordable housing framework. The bill gained popularity among legislators, who bought into the narrative that it would close an alleged tax loophole for developers in the affordable housing space who partnered with government entities known as housing finance corporations (HFCs).

Yet in practice, HB21 reflects lawmakers' willingness to rush housing policy in response to political pressure rather than economic reality.

In places like San Antonio, El Paso, Houston, and the Rio Grande Valley, where affordable housing is already scarce, HB21 all but guarantees deeper housing insecurity, longer commutes for service-sector workers, and the erosion of cultural and economic anchors that have defined these communities for generations. Instead of expanding opportunity, HB21 effectively targets the very families who contribute so much to Texas’s workforce and cultural identity, making it harder for people to live where they work, raise their children, and build long-term wealth.

The bill was meant to overhaul the process through which affordable housing developers in qualify for tax exemptions from the state. But the legislation that passed went even further, applying retroactively to hundreds of completed affordable housing projects. That means buildings currently renting to working-class Texans at affordable rates stand to lose their tax exemptions and face huge bills that could force them to reconsider their ability to rent at those lower rates.

Thus, the law will destabilize public-private partnerships, deliberately unraveling of the very agreements that enabled the private sector to invest in affordable housing in the first place.

Developers are already warning that mass evictions and foreclosures could follow.

Even worse, the bill’s chief architect, Representative Gary Gates (R-28), has previously drawn scrutiny for potential conflicts of interest, as critics note that the restructuring of tax incentives and appraisal rules is likely to benefit his sprawling real estate portfolio directly.

Those effects justifiably raise serious concerns about whether HB21 was designed to serve Texans or to serve Gates. In fact, Rep. Gates recently set up an entity to serve as a front for his own properties and to intervene in a lawsuit challenging HB21 as unconstitutional. Critics argue that the maneuver is effectively an admission by Gates that his businesses will benefit from HB21 and would be hurt by the lawsuit challenging the law.

Housing advocates are fighting back to prevent HB21 from inflicting further damage. The Texas Workforce Housing Coalition recently filed suit, pointing out that HB21 is being used to retroactively strip tax exemptions from affordable housing projects that were legally established under prior law. The bill was set to go into full effect on Jan 1, 2027, but housing districts across the state are already stripping properties of previously granted approvals and exemptions.

For years, developers partnered with local housing finance corporations (HFCs) to produce units reserved for working families, relying on contractual tax exemptions that made these deals viable. HB21 requires rewriting these contracts after the fact, resulting in chaos: agreements are being questioned, financing structures disrupted, and long-term commitments disrupted.

Given the sweeping consequences HB21 is already producing, and the fact that tens of thousands of Texans stand to be affected, the Texas Legislature should immediately commission an independent, data-driven study examining the law’s economic, housing, and displacement impacts before they fully cascade across the state. Sound policymaking demands evidence, transparency, and deliberation, not rushed legislation that upends communities after the fact.

At the same time, the controversy surrounding HB21 underscores a deeper structural problem in Texas governance: the absence of an independent ethics commission with real enforcement authority. Texas lawmakers should move without delay to establish an ethics body empowered to investigate and sanction conflicts of interest, including cases like the one alleged against Rep. Gary Gates. Legislation that directly benefits—or even appears to benefit—a lawmaker’s private financial holdings erodes public trust. Without oversight and enforcement mechanisms, that erosion accelerates. Texans need politicians and policies that work for them, not against them.

The consequences of failing to uphold that standard are already clear. Texans have seen what happens when housing instability spreads unchecked: employers struggle to retain workers, schools lose students, and families who have invested years in their communities are pushed out. HB21 risks accelerating all of those harms. If Texas is serious about affordability, growth, and fairness, lawmakers must pause, study the damage, and act decisively. not just to fix a flawed housing law, but to reform the ethical safeguards that failed to prevent it.

Mario H. Lopez is the president of the Hispanic Leadership Fund, a public policy advocacy organization that promotes liberty, opportunity, and prosperity for all.