According to the Legislative Budget Board (LBB), SB 731 would have no significant fiscal impact anticipated at the state level. The Texas Department of Housing and Community Affairs (TDHCA), the agency responsible for implementing and overseeing the requirements established by the bill, is expected to absorb any administrative or enforcement costs using its existing resources. This implies that no additional appropriations or staffing expansions are currently projected.

Similarly, there is no significant fiscal implication anticipated for local governments. Since the bill applies to private developments that receive Low-Income Housing Tax Credits and not directly to municipal or county infrastructure, local entities are not expected to bear any notable financial burden related to enforcement or implementation. The primary costs will be borne by developers of qualifying senior housing projects who must install or retrofit water pressure booster systems as specified.

While the fiscal note reflects a low impact on government budgets, it is important to recognize that the costs for compliance may still be substantial for affected property developers. However, since these are private costs and do not affect state or local budgets directly, they are not reflected in the official fiscal analysis. Overall, the bill appears fiscally neutral from a governmental standpoint.

SB 731 requires water pressure booster systems to be installed in certain multifamily residential developments—specifically those that are four stories or more, reserved for residents 55 years or older, and receiving Low-Income Housing Tax Credits (LIHTCs). The bill’s goal is to address emergency preparedness and safety concerns in these buildings, ensuring all floors maintain water access during emergencies. TDHCA is tasked with enforcing compliance and reporting back to the legislature by 2030.

While the bill's intent is rooted in public safety, the mandate raises significant concerns regarding overregulation, especially for private property owners and developers operating under already stringent LIHTC requirements. The bill imposes retrofit obligations on existing developments, creating financial burdens that may deter future affordable senior housing projects. This could have the unintended consequence of reducing the availability of LIHTC-supported housing at a time when affordability is already strained.

Moreover, the bill creates a precedent for narrowly tailored regulatory mandates that affect a specific subset of private developments based on occupancy and height, without offering state funding or incentives to offset costs. From a limited government and free enterprise standpoint, this is problematic and invites reconsideration of whether a mandatory approach is the most balanced solution.

As such, Texas Policy Research recommends that lawmakers vote NO on SB 731. We also suggest the below-listed amendments to improve the bill's approach.

Suggested Amendments:

• Limit applicability to new developments only, avoiding retroactive mandates.
• Create a waiver or variance process for developments facing undue hardship.
• Offer financial or tax-based incentives rather than mandates for retrofits.

These changes would preserve the bill’s safety goals while respecting private property rights and minimizing regulatory expansion. Without such amendments, the bill may overstep the acceptable bounds of government intervention.

• Individual Liberty: The bill aims to protect the health and safety of senior residents in multifamily housing by ensuring access to water during emergencies. While this promotes individual well-being, it does so through a top-down regulatory mandate. It does not give individuals or property owners the freedom to assess risk and adopt their own mitigation strategies, thereby reducing autonomy in favor of state-prescribed solutions.
• Personal Responsibility: By requiring developments to proactively ensure emergency preparedness for a vulnerable population, the bill promotes the notion that those who provide housing—especially subsidized housing for seniors—have a responsibility to ensure residents' basic needs are met during emergencies. This aligns with a broader concept of personal and institutional responsibility toward those in their care.
• Free Enterprise: The mandate may create a chilling effect on developers’ willingness to participate in the LIHTC program due to the added cost and complexity of compliance. Instead of allowing market-driven safety enhancements or providing incentives, the bill imposes a compliance requirement that could distort decision-making in the affordable housing sector. This undermines the principle of a free market unburdened by unnecessary regulatory interference.
• Private Property Rights: By imposing infrastructure requirements on private developments—particularly retroactive requirements for existing buildings—the bill infringes on property owners' control over how they manage and improve their own assets. Even if such mandates aim to protect residents, they do so at the expense of owners’ discretion and financial autonomy, undermining property rights.
• Limited Government: The bill expands state authority into construction and operational standards for a narrow class of housing developments, mandating compliance and enforcement by the Texas Department of Housing and Community Affairs. This represents a step away from limited government by increasing bureaucratic involvement in what has traditionally been a local or private matter.