Investigative Summary:

KXAN Investigates introduced you to families inside one massive Austin subdivision fighting for costly repairs to their home foundations. While buying a home is most people’s largest investment, the industry responsible for building thousands of new homes every year is largely unregulated in Texas. We take a look at the shuttered Texas Residential Construction Commission — a short-lived Texas agency that tried to resolve disputes between builders and homeowners over alleged construction defects.

AUSTIN (KXAN) – Three months ago, Janeka Harris was nursing her newborn baby upstairs as construction crews began drilling the driveway of her southeast Austin home.  

It was the last part of a months-long repair of her home foundation. Harris said a couple of years after purchasing and building her new home in 2013, she noticed cracks coming from her window seals.

“After they started getting bigger, I called a friend to come out and do some measurements,” Harris said.

Harris’s home is one of nearly 50 in the Lennar at Bradshaw Crossing neighborhood that has undergone foundation repair since 2010, city permits show. Her repair was covered under her warranty with the developer, Lennar, records show.

video over a row of homes in the neighborhood
Lennar at Bradshaw Crossing subdivision in southeast Austin (KXAN Video)

But not every homeowner in the subdivision has had their repairs covered by the national builder, according to court records.

In 2019, two Bradshaw Crossing homeowners sued Lennar claiming the developer “failed to honor their warranties.”

Lennar declined an interview, but in an emailed statement to KXAN Investigates, Lennar said it “has built thousands of homes in Austin, and stand[s] behind all of them, including those in Bradshaw Crossing.”

The builder also said it will repair any home that does not meet the commitment made to buyers.

For many homeowners, it’s hard to drill down on the underlying problem causing their home foundations to fail.

The City of Austin told us it doesn’t require developers to submit the results of soil evaluations that would shed light on the environmental conditions home foundations are built on — and how the soil was treated — and outside of local permitting offices there is not much regulation for home builders in Texas.

At one time in Texas, there was an agency tasked with helping homeowners, like Harris and her neighbors, deal with alleged construction defects.

video of a home
Janeka Harris’s home after foundation repair. (KXAN Video)

‘Too much money at stake’

Back in 2003, for the first time, lawmakers created the Texas Residential Construction Commission. But the agency was short-lived. After seven years in operation, the legislature shuttered it in 2009 during the Sunset Review process — a system where state workers and legislators evaluate an agency and make recommendations to the legislature for changes, including abolishment.

The then-Sunset Commission director told lawmakers during a hearing in 2009 his staff’s review of the agency found “a fundamentally flawed system” for regulating builders.

The TRCC was not a hit with homeowners. The then-director of the agency, Paulo Flores — a construction law attorney — told lawmakers in 2009 he saw the commission not as a regulatory agency, but as a state agency to help resolve disputes between builders and homebuyers.

Some lawmakers and consumers accused the TRCC of favoring builders and delaying homebuyers from filing lawsuits over what they believed were construction defects.

The TRCC had a process where homeowners could request a third-party inspection of their home through the agency — and a ruling on the alleged issues with their home. The TRCC said it oversaw 580 inspections in 2007 and found 25,000 post-construction defects in Texas homes. But critics claimed the TRCC had little power to force builders to then make repairs.

Mickey Redwine speaks at a committee hearing
Former TRCC public member Mickey Redwine speaks in front of the Sunset Advisory Commission on Sept. 23, 2008. (State of Texas Photo)

“I mean you have a process with no results. You have a homeowner that goes through a two-year process and gets nothing from your agency because you have no authority. You have nothing to do to force a builder to make a repair to a home,” said Sen. Juan Hinojosa, D-McAllen, during the Sunset Advisory Commission meeting on Sept. 23, 2008.

But, during hearings in 2008 and 2009, even the harshest critics of the agency expressed interest in keeping it — with fixes including shortening the timeframe for inspections and posting consumer complaints on the agency’s website.

A bill proposed by then-Sen. Glenn Hegar, R-Katy — Hegar is now the Texas Comptroller — and the late Rep. Ruth Jones McLendon, D-San Antonio, gave lawmakers a choice: overhaul the agency or abolish it altogether.  

map showing 33 states have some kind of regulation for home builders
According to a TRCC report in 2007, a total of 33 states regulated home builders back then, but how they did varied by state. (KXAN Graphic)

“If this agency is abolished, both consumers and builders will lose,” said former TRCC member Mickey Redwine. “Renegade and unscrupulous builders will once again be able to operate in Texas, practically unchecked and unregulated.”

More than a decade after the commission’s end, Texas home inspector Lewis Brown, who once sat on the commission, says the homebuilding industry is still in need of regulation.

“There is no oversight,” Brown said. “We need a commission. We need oversight. We need unbiased oversight in our profession.”

The commission noted in 2007, 33 states regulated residential homebuilders in different ways. Many have state licensing agencies or set up recovery funds for homebuyers. Some states, like Nevada, developed inspection programs and help resolve disputes between builders and homeowners.

‘Things are better’

Individual cities across Texas approve building codes, including those from the International Building Code, that dictate the minimum requirements homebuilders must meet when they are building homes in any given area. The requirements can vary across the state. The Texas Legislature has passed legislation impacting the residential homebuilding industry, like laws restricting the period of time a contractor can be sued for defective construction or pandemic protections for construction projects. But there is still not a single agency tasked with solely regulating home builders in the state.

Scott Norman, the executive director of the Texas Association of Builders, said he would not speculate on whether the TRCC would be better to have now. But he said one thing available to homeowners that was not during the days of the TRCC is access to research on builders and remodelers.

“I think one of the things that exist now — that was not as prevalent, you know, going on 17, 18 years ago — is the rise of the internet and social media, the ability for consumers to learn more information beforehand,” Norman said. “We do not hear near the stories. We have 10,000 members around the state, get calls and hear things from all over our 26 local home builders associations, and the volume of complaints and those sorts of things are nothing, nothing to compare to where they were before or during the TRCC time.”

Investigative Photographer Richie Bowes, Investigative Intern Addie Costello, News Director Chad Cross, Director of Investigations & Innovation Josh Hinkle, Graphic Artist Rachel Gale, Digital Reporter & Assignment Editor Chelsea Moreno, Digital Director Kate Winkle and Graphic Artist Jeffrey Wright contributed to this report.