Rent Burden Too High for Many in San Angelo

CITY OF SAN ANGELO

The San Angelo Development Corporation board listened to a briefing on the local housing market from real estate consulting firm CDS of Houston.

CDS Managing Director Michael Pratt delivered the briefing, which was an update to the comprehensive Housing Study conducted by CDS in 2019, authorized by the board in July of 2025.

Although he touched on several key points, most of his time was spent focusing on San Angelo’s most immediate need: affordable housing.

Pratt said the Creek 27 and Wolf Creek developments that helped keep the San Angelo market from overheating in 2019 were leased up in record time, and based on local incomes, the city needs about 850 more affordable units to be considered competitive for economic-development purposes.

According to CDS’s data, the target price San Angelo needs to be shooting for is right around $185,000, based on the median household income of $61,000, noting that developers can’t seem to build them for less than $225,000 to $250,000.

Median income for renters is about $44,000 — roughly $17,000 less than homeowners, Pratt said.

For these renters, $900 to $1,000 represents about one-third of their income, so, many of them are overly cost-burdened by rents in excess of that amount, the report said, adding that the dwindling supply of rental units over the last 10 years has driven rents up.

CDS’s data shows that the 8,000 to 9,000 retail workers in Tom Green County are lucky to make $15-20 per hour, or $31,200 annually on the low end, and they are straining to afford their rents.

Economic Development and Housing

According to Pratt, for economic development experts, one new housing permit approved for every two new jobs is considered a balanced market, and following the sudden job losses associated with the COVID-19 pandemic, San Angelo’s job market has caught up while housing has lagged behind.

Pratt said Tom Green County currently has more jobs than at any time in history: 50, 000 jobs — with existing demand for about 1,800 more housing units — CDS looked at different projections for the housing needed to accommodate growth.

The kind of housing being developed needs to match available incomes, Pratt said.

“You know; healthcare is decent pay, but once you get down into retail, food, hospitality, education — these are four of your largest employment sectors, and they’re also the lowest paying.

“Again, this is why we’re seeing this demand for lower-priced homes and rental units; because the bulk of our employment is folks that make between $20- and $40,000 a year. They can’t afford a house.

“There is no affordable home price for those [workers], unless they get married, and have dual incomes, or get a degree or get a new skill and increase their wage …

“And, of course, that’s what we want to do with the local economic development, but we’ve got to have the housing market that can allow those “maybe” families to come in and say, ‘maybe I can go to ASU’; or ‘maybe I can get a certification’ and ‘maybe I can get an apartment, and get married and have kids’ right?

“So, we want to have a housing market that allows those maybes to materialize, and to happen, so people can put down roots.

“That’s how we’re going to develop our economy locally.”

Pratt went on to talk about things the city is working on to improve the permitting and building process, with the aim of encouraging development.

“In Planning and Zoning … they are working on some good ideas,” he said, “They’re working on their permitting software, working to make permit data more available, and things can be submitted online, signed online …

“We want to make sure that we cut down on the cost of regulation: if the cost of regulation for building a home is 15- or 20 percent of the [cost of the] home, we want to reduce that as much as we can, so, lowering minimum lot sizes, and liberalizing your single-family zoning to allow for people to come in … and build new duplexes and fourplexes in existing neighborhoods.

“Or take a 50-foot lot and demolish and old structure, and subdivide it into two 25-foot lots, and now you have two, smaller, more affordable homes where one larger home used to be.

“These are the types of things that cities are doing; this is best practice in land use, and housing development, to allow for these missing middle-housing types, which are not just big, giant, 250-unit apartments.

“If we had 250 [accessory dwelling units], scattered throughout a neighborhood, that’s not going to put a strain on existing infrastructure, because these neighborhoods already have streets, and they have utilities and pipes.

“So, theoretically, we could cut down the cost of housing production by allowing the market to come in and provide smaller homes, [like] rental units… things our workforce really wants and needs.”

CDS provided a list of next steps that included:

• Legalize and support missing middle housing across all residential zones
• Reform zoning standards to unlock more buildable land
• Remove excessive parking mandates
• Streamline existing permitting, review and entitlement processes
• Reform building and infrastructure codes
• Ensure fair, transparent and affordable development costs
• Align infrastructure investment and housing development
• Support an ecosystem of incremental developers

Also recommended

• Reduce 5,000 square-foot minimum single-family lot size, especially in infill areas, with a target of 1,400- 2,000 square-foot or less.
• Permit subdivisions/splitting of existing home lots to enable small-scale development, like townhomes.
• Increase lot coverage allowances, up to 60% or more) and reduce setback requirements.
• Allow zero-lot-line homes and flexible setbacks.
• Increase building heights up to at lease four stories.
• Collaborate with city, economic development and private developers on housing production goals.
• Monitor housing costs and supply through regular ResIntel updates.
• Position San Angelo as competitive in talent attraction with diverse housing stock via incentives and financing.

CDS was founded in 1971 as Consulting and Development Services, providing market and economic research. The firm has since completed more than 4,000 studies for public and private clients.