The Truth About Density, Tax Revenue, and Public Services in Montgomery County, TX

When commissioners consider regulations that affect residential density — like minimum lot width requirements — one argument comes up repeatedly: smaller lots and higher density put more strain on public services. More calls to emergency services. More children in schools. More pressure on roads and infrastructure. And therefore, the argument goes, larger homes on larger lots are better for the county's bottom line.

It sounds logical. But when you look at who is actually buying attainable homes in Montgomery County, apply straightforward math to the tax revenue question, and examine what decades of research say about how first-time homeowners treat their communities — the argument does not hold up. Worth noting: county staff have described this proposed increase as a "clerical correction." A 25% increase in minimum lot width — with measurable consequences for housing affordability across the county — is neither clerical nor a correction. It is a policy decision, and it deserves to be examined as one.

Here is what the data actually shows.

The Tax Revenue Argument Doesn't Add Up

The claim that larger, more expensive homes generate more property tax revenue than smaller, more affordable homes sounds intuitive. But it ignores a fundamental question: how many homes fit on the same land?

Property taxes are calculated per home, on the assessed value of that home. So the question is not which individual home pays more tax — it is which land use pattern generates more total tax revenue for the county from the same acreage.

Consider a straightforward example using a 100-acre tract in unincorporated Montgomery County:

The math is simple. A single $350,000 home pays property taxes on $350,000. Two $175,000 homes pay property taxes on $350,000 combined. The taxable value is identical — but the two-home scenario generates twice the economic activity: two families hiring local contractors, two landscapers, two internet subscriptions, two households shopping at local hardware stores, two families eating at local restaurants.

And the 50-foot lot scenario actually generates the least total taxable value of all three. Fewer homes on the same land means a smaller total tax base — not a larger one.

More Homes Means More of Everything the Local Economy Needs

Beyond property taxes, the density advantage compounds when you consider what each household contributes to the local economy. Going back to the 100-acre example — a community of 600 attainable homes versus 250 larger homes on the same land produces a multiplier effect across every category of local spending:

Same land. Similar total taxable value. But the attainable community generates 2.4 times more local economic activity, more local jobs, more local spending, and more direct community engagement — because there are 2.4 times as many households participating in the local economy.

The School System Argument: Who Is Actually Moving Into These Homes?

The second part of the density argument is that smaller, more affordable homes bring more children into the school system — adding enrollment pressure to Conroe ISD and Montgomery ISD without a proportional increase in tax revenue.

This assumption does not reflect who is actually buying homes in attainable communities. Based on our experience across Ellison Development communities in Montgomery County, approximately 1 in 6 homes has a school-age child — a rate of roughly 17%.

Why? Because homes starting in the mid-$100s attract a fundamentally different buyer profile than homes at $350,000 and above. Attainable first homes are purchased by:

On a 100-acre tract, 600 attainable homes at 1 in 6 households with a school-age child would produce approximately 100 school-age children. The same land with 250 larger homes at 2.5 children per household would produce approximately 625 school-age children — more than six times the enrollment pressure, from the same acreage. The assumption that smaller lots strain the school system more is the opposite of what the buyer profile data supports.

The Public Services Argument: What Research Actually Shows About Attainable Homeowners

Beyond school enrollment, the broader concern about density and public services assumes that more households means proportionally more demand on emergency services, law enforcement, and county infrastructure. But this assumption misses something important about who is moving into attainable ownership communities and how they behave once they get there.

The research on this is consistent and significant. A study cited by the Joint Center for Housing Studies at Harvard University found that the positive impact of homeownership on civic and community participation is greatest for low- and mid-income homeowners — not affluent ones. The mechanism is straightforward: when a home represents years of sacrifice and the realization of a lifelong goal, the owner is far more invested in maintaining it and in the stability of the neighborhood around it. (Source: Hope Policy Institute / Journal of Urban Economics ↗)

Habitat for Humanity's research series on homeownership and civic engagement found that after purchasing a home, new homeowners' likelihood of joining a neighborhood association increased fourfold. (Source: Habitat for Humanity ↗) Renters who moved showed no such increase — because renters have no financial stake in the neighborhood's long-term condition.

Renters move at five times the rate of homeowners. High turnover means unstable neighborhoods, less investment in property upkeep, and less community accountability. A renter facing a lease renewal has no reason to paint the exterior, maintain the yard, or attend a neighborhood meeting. A first-time homeowner has every reason to do all three.

The communities that require the most from public services — emergency response, law enforcement, code enforcement — are not communities of engaged first-time homeowners. They are communities defined by instability, high turnover, and low investment in the physical and social fabric of the neighborhood. Attainable homeownership produces the opposite of that.

"I never thought I would own a home. I thought I was doomed to rent for the rest of my life — and I am here now." — Melissa, Homeowner · Ellison Development Community · Montgomery County

"It is not a dream that our age group kind of gets to have anymore. So it was amazing to find something attainable — that we can own something, and build generational wealth." — Joshua, Homeowner · Ellison Development Community · Montgomery County

The Data Points in One Direction

The argument that larger lots generate more tax revenue, strain public services less, and produce better communities is not supported by the evidence. What the data actually shows:

• More than half of all households in Montgomery County earn less than $100,000/year — below the income needed to qualify for the median home. This regulation eliminates the only available option for those families.
• A 100-acre attainable community generates comparable or greater total taxable value than the same land developed with larger lots — and significantly more than a 50-foot lot community
• The same acreage with attainable homes produces approximately 100 school-age children vs. approximately 625 from a comparable large-lot community — because the buyer profile is fundamentally different
• Attainable homeowners are fourfold more likely to join neighborhood associations after purchase than renters — producing more stable, more engaged, better-maintained communities
• The civic engagement gains from homeownership are greatest among low- and mid-income owners — exactly the families who live in attainable communities
• Higher density produces 2.4 times more local economic activity from the same land — more contractors hired, more local businesses supported, more tax contributors participating in the local economy

Regulation should be based on data. The evidence — from tax math, buyer demographics, and decades of research on how first-time homeowners engage with their communities — tells a consistent story.

Attainable homeownership on 30-foot lots is not a burden on this county. It is one of this county's greatest assets.

Related Reading

• How Affordable Homeownership Boosts the Montgomery County Economy
• Renting vs. Owning in Montgomery County: The Wealth Gap That Changes Everything
• Two Lot Size Increases in 13 Months: What It Means for Montgomery County Homebuyers
• In Their Own Words: What Homeownership Has Meant for Montgomery County Families

Sources

1. Ellison Development community data — household composition across Montgomery County communities
2. U.S. Census Bureau: 2024 American Community Survey — household income distribution, Montgomery County, Texas
3. Hope Policy Institute: Homeownership Promotes Civic Engagement — citing Journal of Urban Economics and Joint Center for Housing Studies at Harvard University
4. Habitat for Humanity: Research Series — How Does Homeownership Contribute to Social and Civic Engagement?
5. Next City: Study Finds Connection Between Homeownership, Mobility and Civic Engagement
6. NAHB: The Economic Impact of Home Building in a Typical Local Area, 2015
7. U.S. Census Bureau: American Community Survey — household size and composition data