How Housing Advocates Built Bipartisan Support for a State Housing Fund in Texas

Across the country, affordable housing advocates are working to create change in their state policy landscapes. From researching innovative proposals to developing effective messaging strategies and tactics that have worked to get new or expanded housing measures passed, advocates look to impact zoning reform, pass state tax credits, implement housing funds, and make positive strides in their communities.

This brief presents a case study of Texas’ Workforce Housing Capital Investment Fund bill, legislation proposed by two affordable homeownership developer organizations.

Texas’ Workforce Housing Capital Investment Fund bill, SB 208, was proposed in April 2025 by Habitat for Humanity Texas (Habitat Texas). Although it did not pass, the bill serves as a useful model of policy design and the strategies that helped gain bipartisan traction. Motivated by data around the state’s need for more affordable, for-sale homes, Habitat Texas developed the concept for a statewide revolving loan fund that could support nonprofit developers to finance pre-development project costs. The bill was driven by a “simple but urgent reality,” said Amy Parham, Habitat Texas CEO. “When stress enters the housing system at any point – land acquisition, infrastructure, labor, financing, or supply – it ultimately lands hardest on the lowest-income families.” To target the root problem of affordability, they believe that “we must solve problems at every level of the housing ecosystem, not just at one end of the spectrum or the other.”

The bill was created to address the needs of Texas’s workforce such as teachers, healthcare workers, service sector workers and others for whom affordable
home options in the communities where they work are often out of reach. At the same time, SB 208 supports local and proven nonprofit developers.

The bill creates a dedicated funding vehicle – funded by a one-time appropriation of $50 million to create a revolving loan fund – for the development of owner-occupied single-family housing for households earning 30-80% of the Area Median Income (AMI). This fund would provide 0% interest loans to nonprofit organizations with demonstrated experience in affordable home building. Eligible uses include land acquisitions, planning, permitting, and construction training. The Texas Department of Housing and Community Affairs (THDCA), a state government agency, would oversee management of the fund from loan disbursement to compliance and reporting.

South Texas single-family homeownership developer, cdcb, partnered with Habitat Texas on the bill to serve as the rural implementer. cdcb advocated for a companion budget rider (HB 4505) for rural housing development during the appropriations process, as their role was to “ensure rural capacity wasn’t overlooked and to provide shovel-ready examples,” said Daniel Elkin, Director of Policy, Impact, and Innovation at cdcb.

The Texas bill referenced revolving housing funds in Minnesota and Florida as successful models for their bill.

Habitat Texas studied a revolving loan fund in Minnesota that had “successfully increased affordable homeownership supply while remaining fiscally responsible,” said Parham. The Minnesota legislation was the primary proof of concept for SB 208, as a one-time public investment created an evergreen revolving loan fund that supported housing production year after year, addressing common challenges to scaling production of affordable homes like land acquisition, infrastructure development, flood mitigation and workforce training.

According to Parham, Florida’s program acted as a “political reference point.” Although it was structured differently than Minnesota’s (through tax credit tools), the Florida fund provided an example of how such policies – fiscally disciplined and supply focused -- can gain support in a variety of political climates.

The messaging of the bill was framed around housing supply, accountability, and economic efficiency. Knowing they needed to rally the support of Republican senators, advocates of the bill framed it as an economic, market-driven approach to address the lack of housing supply. A few of the key benefits of the bill as stated in its marketing infographic are that the bill, “expands affordable homeownership opportunities, stabilizing local economies” and “reduces reliance on state services by fostering family economic independence.” Advocates of the bill focused on its economic benefits, citing how it would lead to greater economic stimulation by boosting property tax revenue and consumer spending.

The bill successfully passed the Texas House with strong bipartisan support, “confirming the underlying policy concept resonated across ideological lines,” said Parham. It was heard in committee, but ultimately stalled there and did not pass in the FY2025-2026 legislative session.

The proposed rural rider passed through its committee, the first housing measure to accomplish such a feat in 25 years, but was ultimately unsuccessful in getting into the final budget.

Although SB 208 didn’t pass, it laid the groundwork for future proposals. Future legislative sessions will be able to build on its structure to scale up workforce housing production statewide, especially in high need rural and suburban areas.

Habitat Texas and cdcb plan to refile the bill next session with some minor adjustments. They noted that interest in refiling has only increased – a positive indicator that the conversations it started are only furthering. To modify the bill, they will:

• add explicit carve-outs or scoring preferences for rural development and

• pair the bill with a pilot appropriation and an updated one-pager.

In the meantime, they plan to brief TDHCA on next steps, line up bipartisan authors for the bill as early as possible and prepare district-level project lists.

Advocating for the Workforce Housing Capital Investment Fund bill was a learning lesson in the need for simplicity, clarity and broad base support to pass bipartisan housing legislation. cdcb learned the following lessons when building support for a state-level housing fund.

1. Keep it evergreen and simple: a zero-interest revolving fund is easy to explain and fiscally conservative.
2. Clearly define eligible uses (e.g. land, infrastructure, utilities).
3. Include a rural on-ramp to ensure statewide equity.
4. Link housing with workforce training for added impact.
5. Run both tracks: a policy bill and budget rider.
6. Build a broad coalition of nonprofits, CDFIs, chambers, and local governments.

From Habitat Texas’ perspective, says Parham, “SB 208 represents long-term systems change rather than a one-session effort.” Although the bill didn’t pass on its first attempt, their goal is to create housing policy that can stand the test of time which requires refined language, coalition building and well-aligned political timing.