Construction in Far East El Paso in 2021.

With recent U.S. Census data showing a decline in the population within El Paso’s city limits – and steady growth in the rest of the county – some experts point to a lack of suitable housing in the city as a primary driver of the shift.

The trend has highlighted the need to develop a plan to provide the types of homes that will encourage more people to live in El Paso, elected officials and urban planners say.

“We are in the midst of a housing crisis, not just here, but across the country,” said El Paso city Rep. Josh Acevedo, whose district encompasses one of El Paso’s most concentrated housing areas.

“People are leaving the core, and they’re going to the outskirts. That is really damaging a lot of things because there’s less population. Our schools are seeing fewer people, so infill development is really important,” he said.

The city is studying El Paso’s housing dynamics to create a blueprint for the next 10 to 15 years.

The first phase of that effort was presented to City Council in November by Economic and Planning Systems Inc., which has spent more than two years working with city officials, regional developers, builders, planners and community groups to provide a full housing assessment.

The report is spearheaded by the city’s planning division, which is working with Economic and Planning Systems to compile the research, assessments and strategy recommendations.

City leaders say the report is key to addressing two of El Paso’s growing housing challenges – affordability and a lack of available homes. They plan to use its findings to guide future housing policies.

“El Paso’s population has flatlined since about 2010, whereas the county has continued to grow,” said Matt Prosser, a principal at Economic and Planning Systems, a land economics consulting firm with offices in California and Colorado.

It “was sort of striking,” he said, that El Paso’s employment expanded by about 1% each year despite the city’s stagnant population growth.

“What we’re seeing is more folks who are working in our community are commuting from outside of our community for their job,” said Prosser during the November presentation.

Prosser also highlighted the different pace of residential construction in the city and in the county. Since 2010, housing units have grown at an annual rate of 1.2% in the city compared with 1.4% in the county.

In 2010, areas outside of the city limits accounted for 17% of all El Paso County housing units. By 2025, that figure had risen to 30%.

“We’ve seen a really dramatic shift in the amount of housing that’s being built outside of the city in either the unincorporated part of your ETJ (the area immediately outside the city) or in neighboring communities,” Prosser said, adding that this has been the trend for the last 10 to 15 years.

“That’s really new for you all,” he said. “Traditionally, you’ve captured the vast majority of the housing growth. And so about 31,000 housing units since 2000 were built outside of the city. That’s 70,000 to 80,000 new folks living outside the community that may traditionally have been within your city boundaries, and that starts to create some new regional dynamics.”

Prosser attributed the trend to neighboring communities becoming more established and offering more housing options. That leads to families moving outside the city limits with their children, which then leads to reduced school enrollments in El Paso and school closings in the core of the city.

“Losing schools makes existing neighborhoods less attractive and makes attracting folks back into the city more challenging as well. So there’s a bit of a cyclical nature to that,” he said.

One reason developers are building more homes outside El Paso, Prosser said, is the change in state annexation laws in 2017 and 2019, which made it illegal for cities to unilaterally annex property for expansion. With that change, developers are finding it “cheaper and easier in a lot of cases to develop outside the city versus in the city.”

The region has a lower household income than the national average, which creates affordability challenges for prospective homebuyers.

The average cost of a home in El Paso is $250,000, and a household would need an annual income of $85,500 to afford it, according to budgeting best practices, Prosser said. But the median household income in El Paso is $63,600, which leaves an affordability gap of nearly $22,000.

A similar income gap exists for renters, he said.

Alex Hoffman, assistant director for planning in the city’s capital improvement department and one of the lead researchers for the report, clarified that El Paso is not necessarily seeing a lack of housing.

“I would say it’s the lack of the right housing,” he told El Paso Inc.

He said one of the big takeaways from discussions with the community was that living in El Paso often means trying to upgrade an older home.

“It’s a cost proposition of, ‘do I want to spend money doing a renovation with an end product that may or may not meet my needs?’ or ‘do I want to have something that I can move in right away, and have it meet my needs today?’” Hoffman said.

Often, the decision is to move into a new home instead. And those homes, their research shows, are increasingly outside the city limits.

City officials said they are looking for housing strategies that incorporate some of El Paso’s existing customs and infrastructure. As an example, a few city representatives have proposed loosening rules for accessory dwelling units, better known as casitas or in-law suites, on properties.

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Housing crunch fuels El Paso’s population shift