According to the Legislative Budget Board (LBB), HB 4398 is not expected to have any fiscal implications for the state of Texas. The bill’s requirements for expedited permitting processes in larger municipalities do not necessitate new state-level expenditures, staff, or infrastructure. As such, state agencies are not projected to incur additional costs as a result of implementing the provisions of this legislation.

For local governments, the fiscal note indicates that no significant fiscal impact is anticipated. While the bill requires cities with populations over 100,000 to accelerate permit review timelines for affordable housing developments that receive low-income housing tax credits, the change is framed as an adjustment to existing processes rather than the creation of new regulatory mechanisms. Thus, although municipalities may need to reprioritize resources or adjust internal workflows to comply with the accelerated review requirement, these changes are not expected to produce substantial new costs.

Overall, HB 4398 is designed to promote efficiency in local permitting without imposing additional financial burdens on state or local entities.

HB 4398 proposes expedited permitting timelines for affordable housing developments that receive federal Low-Income Housing Tax Credits (LIHTCs) in municipalities with populations exceeding 100,000. While the bill aims to address Texas’s serious affordable housing shortage, it does so by prioritizing a single class of housing developments over others—those funded through a specific government subsidy program. This selective prioritization raises concerns about fairness, neutrality in public policy, and the proper scope of government intervention in local regulatory processes.

The bill’s most significant flaw lies in its creation of a two-tiered permitting structure. By mandating that LIHTC-supported projects receive faster municipal permit reviews than other residential developments, HB 4398 inherently favors one financing model and one tenant group over others, including working-class and middle-income Texans who also struggle with housing affordability. This undermines the principle that all individuals and developers should be treated equally under the law, regardless of how their housing is funded.

Additionally, the bill deepens reliance on a federal tax credit system as the primary vehicle for affordable housing. Rather than fostering innovation or reducing regulatory burdens across the board, it reinforces a subsidy-dependent approach that may not serve the broader housing market effectively. Texas needs housing reform, but it should focus on streamlining regulations and creating fair, consistent permitting standards for all types of developments—not just those backed by government subsidies.

For these reasons, despite its good intentions, HB 4398 is not the right solution. It introduces preferential treatment, risks distorting municipal priorities, and falls short of the comprehensive, neutral reforms needed to improve housing access for all Texans. As such, Texas Policy Research recommends that lawmakers vote NO on HB 4398.

• Individual Liberty: While increasing access to affordable housing may expand personal freedom for low-income residents, the bill does so by privileging one group’s path to housing over another’s. By mandating preferential treatment for LIHTC-backed developments, the bill implicitly suggests that some individuals' housing needs are more urgent or more deserving of state-facilitated fast-tracking. This undermines the notion of equal treatment under the law, a bedrock of individual liberty.
• Personal Responsibility: The bill does not directly discourage personal responsibility, but its targeted support for subsidized housing could be interpreted as favoring dependency on government mechanisms rather than encouraging broader, community-driven or private-sector solutions. It assumes the most efficient route to affordability is through public tax credits, rather than empowering individuals or private developers across income levels to build and seek housing more freely.
• Free Enterprise: This is where the bill most clearly conflicts with liberty principles. The bill distorts the competitive playing field by giving government-subsidized developers a regulatory advantage. Market-rate builders, including those creating low-cost or workforce housing without subsidies, are left to navigate slower, more burdensome permitting processes. This violates the principle of a neutral, open market and introduces state favoritism into what should be a level economic arena.
• Private Property Rights: The bill does not infringe on property ownership itself. However, by giving certain developers special access to faster approvals, it may discourage investment from others whose projects are delayed or deprioritized, effectively tilting local land use policy in favor of tax-credit-backed housing. This raises questions about the fair and equitable use of local resources, particularly if cities are compelled to reshuffle priorities at the expense of other legitimate development proposals.
• Limited Government: Though the bill does not create a new agency or program, it imposes a state mandate on local governments, telling cities how quickly they must process certain building permits and which projects to prioritize. This top-down approach expands the scope of state influence over local governance and represents a departure from the principle that government should act narrowly and minimally, especially in matters traditionally handled at the municipal level.

• SB 210 (Same As)