The Tenth Amendment to the United States Constitution is a very important one. “The powers not delegated to the United States by the Constitution, nor prohibited by it the States, are reserved to the States respectively, or to the people.”
Over the past several years, the Federal government, primarily through the United States Supreme Court (“SCOTUS”), has delegated certain powers back the states. (The most notably and controversial being Dobbs v Jackson.) SCOTUS has been a center of the de-centralization of Washington D.C.’s powers.
In contrast to expectations of decentralization, the Texas Legislature has increasingly exercised preemption over local authority by enacting laws that restrict cities from passing ordinances beyond what is permitted under state law in specific areas. The prevailing trend in urban real estate suggests that policy decisions are consistently centralized through Austin. The driving force behind these actions in Austin has been solving Texas’ affordable housing problem.
The two bills impacting builders the most are the subject of this article. Both benefit home builders and developers on the one hand. But on the other hand, both restrict cities with populations: (i) over 150,000 people[1] AND (ii) located in part or whole in counties with more than 300,000 people[2]. However, both statutes fail to identify whether this count is as of the official 2020 U.S. Census, demographics studies by the state of Texas, or otherwise. Thus, in cities such as Amarillo and Potter County, population may be a debatable point and a moving target in the cities and counties on the bubble. This leaves room for some debate on where the statutes do apply.
Small Residential Lots
SB 15’s passage (codified in Chapter 211 of the Texas Gov’t Code) caps off a legislative session in which lawmakers passed multiple bills to reduce the state’s spiraling housing costs. They did so primarily by cutting local regulations and red tape to allow more homes to be built. Texas needs hundreds of thousands more homes than it has. That shortage, housing advocates and experts have argued, played a key role in driving up Texas home prices and rents as the state boomed.
The basic requirements of SB 15 are: (i) lots have not been previously platted. (ii) located in Urban Cities. (iii) zoned for single-family homes. If those basic thresholds are met, then no ordinance or other rule can prohibit lots sized: (i) larger than 3000 square feet; or (ii) wider than 30 feet; or (iii) deeper than 75 feet.
There are finer points in HB 15 such as minimum setbacks that a developer/builder must be familiar with. And there are some exemptions around airports and air force bases that are beyond the topic of this article. Allowing the small lot sizes will naturally result in more homes in each subdivision. And this will increase the supply of housing in these growing urban and suburban areas.
However, closer neighbors are likely to make survey and boundary disputes more common and will certainly challenge builders and developers on necessary drainage in these confined spaces.
Commercial Zoning Changes
SB 840 (codified as Tex Gov’t Code 218.001) will have an immediate impact to Urban Cities and their planning and zoning departments. Generally, there are six (6) categories of commercial zoning: (i) heavy industrial use; (ii) mixed-use residential; (iii) multi-family; (iv) office; (v) retail; and (vi) warehouse. Prior to SB 840, if an apartment developer wanted to build an apartment or mixed-use project in any zoning category above except multi-family, it would require a zoning change. Such change would be challenged by adjacent property owners, especially residential neighborhoods and their associations. But now, stay tuned for a multi-family development coming soon near you!
The applicable situation is as follows: The owner of a retail power center in the urban center of an Urban City (“Commercial Seller”) wants to sell not to another retail property owner, but to the open market. The Commercial Seller locates a multi-family developer (“Commercial Buyer”) interested in demolishing the retail center and building apartments. However, to do so requires a zoning change. Due to the public outcry over traffic, crime and density, a local group convinces the city to deny the change and the deal falls through. However, after September 1, 2025, there would have very little to stop the Commercial Buyer from proceeding with this transaction. In fact, the statute specifically states:
“[a] municipality may not require the change of a zoning district or land use classification or regulation or an approval of an amendment, exception, or variance to a zoning district or land use classification or regulation prior to allowing a mixed-use residential use or development or multifamily residential use or development in an area covered by zoning classification described by Subsection (a).”[3]
Gone will be the drawn-out battles at P&Z meetings across the state.
Further, Urban Cities will be very limited on what density, building height and set back requirements may be imposed on the new development. Additionally, mandatory, minimum parking requirements will be only one parking spot per dwelling or a multilevel parking structure. This is often a critical factor in establishing the footprint of the new structure(s) and an economic consideration for the developer.
There are additional “green lights” in the statute that will quickly move the approval and permitting process along, such as prohibiting required traffic studies in a remodel or conversion situation where the structure is more than five (5) years old, adding parking spaces, or requiring upgrading a utility facility. As a final win for developers, there will be no impact fees on conversions, unless such building was previously subject to an impact fees.
Unleashing Urban Growth: Zoning Reform and Its Ripple Effects
Texas is growing at a record pace, and Urban Cities will be ripe for the majority of that growth with the easing of municipal red-tape and administrative roadblocks to clear the path for expedited, affordable multi-family housing meeting a long overdue need.
Yet, despite these sweeping reforms, the changes have sparked considerable debate and controversy among residents, local officials, and advocacy groups. Many argue that loosening zoning restrictions and curtailing municipal oversight could undermine neighborhood character, strain existing infrastructure, and challenge the delicate balance between growth and community interests. The expedited path to multi-family housing, while welcomed by developers, leaves some questioning whether the voices of local communities are being adequately considered in the rush to address Texas’s housing demands.
Matthew L. Motes is a partner in the Fort Worth office of Shackelford, McKinley & Norton, LLP, and can be reached at 682-339-9870 or [email protected]. The firm also has offices in Dallas, Austin, Houston and New Orleans with a strong foundation in all areas of construction law and construction/design defect litigation.
[1] Based on the 2024 Texas Demographic Estimate: Texas Cities over 150,000: Houston, Dallas, San Antonio, Fort Worth, Austin, Arlington, El Paso, Plano, Corpus Christi, Lubbock, Frisco, Amarillo, Irving, McKinney, Laredo, Garland, Grand Prairie, Brownsville, Denton, Mesquite, and Killeen (“Urban Cities”). (Thus SB 15 applies in all but Amarillo, because Potter County’s population is currently less than 300,000.00 people.
[2] Texas Counties over 300,000: Harris, Dallas, Tarrant, Bexar, Travis, Fort Bend, Collin, Denton, Hidalgo, Cameron, Brazoria El Paso, Nueces, Williamson, Montgomery, Galveston, Lubbock, Bell. Several other just miss the mark: McLennan, Hays and Webb.
[3] Tex Gov’t Code 218.101(b)
SHOWDOWN: NIMBY vs. the State of Texas
Tuesday, September 16, 2025
8:30 – 10:30 am
Acme Brick Tile & Stone
801 Airport Fwy, Euless, TX 76040
Matthew Motes and Leigh Budlong of Zoneability be making a special presentation and update on these major changes to Texas zoning laws.
Read Leigh Budlong’s article: What Every Property Owner in Texas Needs to Know Before Sept. 1
THIS ARTICLE ORIGINALLY APPEARED IN VOL 4 2025
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