Texas Rents Under $1,000 Are Disappearing — What This Means for Investors
A new report from the Harvard Joint Center for Housing Studies (JCHS) highlights what many of us already see on the ground: affordable rental housing is vanishing at an alarming pace.
Over the past decade, the number of rental units priced under $1,000 (after adjusting for inflation) has plummeted, while luxury rental options have exploded. This is especially true in Texas, where the housing market has experienced one of the most dramatic shifts.
The Numbers Don’t Lie
Between 2013 and 2023, Texas rental housing changed in a way that left lower- and middle-income families with fewer options:
- Units under $600/month: down nearly 40%
- Units between $600–$999/month: down about 35%Collateralized by real estate so your capital is protected
- Units over $2,000/month: up more than fourfold
At the same time, construction of new apartments has largely focused on the higher end of the market. Developers have chased profitability by building units that rent for $1,800–$2,500+, leaving a gap at the bottom.
This is no small problem. According to Harvard’s report, half of all U.S. renters are now cost-burdened, meaning they spend more than 30% of their income on housing. More than 12 million households spend over half their income just to keep a roof overhead.
Affordable Housing: Why It Matters
When people hear “affordable housing,” they often think it’s just a government program or a buzzword tossed around in policy debates. But here’s the reality: affordable housing is the foundation of stable communities.
- It means teachers, first responders, and service workers can live near where they work.
- It means families aren’t forced to choose between rent and groceries.
- It means seniors on fixed incomes don’t have to fear displacement as rents skyrocket.
Why We Focus on Affordable Housing
At Houston Capital Group, we’re intentional about where we put our capital. We believe the biggest opportunity (and the biggest impact) comes from investing in affordable housing communities. Here’s why:
- Notes (Passive Lending): By structuring private mortgage notes, we allow investors to participate passively while being secured by real assets. Unlike speculative development, these notes are tied to housing people need right now. It’s predictable, collateralized, and aligned with the realities of the market.
- Demand > Supply: Every year, the affordable housing shortage grows, which means our investments are naturally insulated from oversupply cycles that often hit the luxury apartment market.
- Mission + Margin: We believe impact and profit don’t have to be opposites. Affordable housing delivers both — investors earn returns, and families get stability.
- Single-Family Rentals: While rising taxes and insurance costs have made single-family rentals more challenging, they still make sense when approached strategically. The cash flow remains strong in the right markets, and demand for affordable single-family housing continues to grow as many families prefer the space, stability, and community that single-family homes provide.
Mobile Home Parks and RV Parks: The Sweet Spot
Mobile home parks and RV parks are two of the most underappreciated and underbuilt asset classes in real estate, yet they solve the very problem Harvard highlights.
- Lowest Cost Housing: Mobile homes and RV pads often provide housing in the $400–$800/month range — well below the cost of even “Class C” apartments.
- Durable Demand: Because they sit at the very bottom rung of the housing ladder, demand remains strong regardless of economic conditions. Families may move down into affordable housing in hard times, but they rarely move out of it.
- Limited Supply: Zoning restrictions and community resistance mean new mobile home parks are rarely built. That makes existing communities more valuable every year.
- Investor Advantage: By combining private lending structures (notes) with ownership in these communities, we’re able to offer investors the stability of cash flow and the upside of long-term appreciation.
Why This Matters for Investors
As an investor, you always want to be where demand is growing and supply is shrinking. Affordable housing fits that bill perfectly.
- High demand, low supply: With fewer units under $1,000, the families who rely on this price point have fewer and fewer options. That creates durable demand in the affordable sector.
- Resilient cash flow: During downturns, luxury renters can “trade down,” but affordable renters can’t trade lower — they’re already at the bottom. That makes these assets less volatile in recessions.
- Essential need: People may delay buying a new car or a vacation, but they can’t delay paying for shelter. Housing at the lower end of the market is always needed.
Looking Ahead
The Harvard report makes it clear: unless there’s a major shift in housing policy and development priorities, affordable rental stock will continue to shrink. That means:
- Rents in the bottom tier are likely to rise.
- More families will struggle to find housing they can afford.
- Investors who position themselves in affordable housing today will be in one of the strongest, most resilient asset classes tomorrow.
If you’d like to dive into the full research, you can read the report here: The State of the Nation’s Housing 2025.
Because one thing is certain: affordable housing isn’t just a social need — it’s one of the smartest places an investor can put their capital right now.
Ready to learn more about how private lending can work for you? Let’s talk.
Brant Phillips
Houston Capital Group