Austin Business Journal writes, "The most recent Texas legislative session saw a slate of measures passed to make it easier to build more housing across the state.
Some of the laws that were changed include allowing smaller and ideally more affordable homes to be built, expanding where housing in the state could be built and making it harder for housing developments to be killed in the approval process.
While the Texas Legislature and its process is known for killing more bills than they pass, the 89th legislative session proved to be a “really strong” one for housing and affordability, said Julia Parenteau, the director of public policy for Texas Realtors.
“We did anticipate that housing affordability, in particular, was going to be something that the Legislature was focused on this year,” she said. “We had a lot of conversations with legislators, with legislative leadership throughout the interim about the availability of housing in Texas, and there have been concerns that have been raised.”
Texas has seen issues around housing affordability rise in recent years as more people and businesses move to the state. Parenteau said Texas Realtors has heard from demographers that the number of people moving to the state every day has ranged from 1,100 to 1,300 in recent years.
According to U.S. Census Bureau estimates, Texas has added more than 2.1 million residents from 2020 to 2024 and seen its population grow by 7.35%.
That rapid growth has led Texas to a shortage in housing. A report from Up for Growth, a nonprofit housing organization, found that Texas had a shortage of 306,000 homes in 2023.
“Across the board, Texans are hurting because of affordability and that's not good — that's not good for business, that's not good for the government, it's not good for education, it's not good for anybody,” said Greg Anderson, a member of the Austin Planning Commission and director of community affairs for Austin Habitat for Humanity.
Opening commercial land for residential uses
One of the bills that will open up a lot of land for residential uses is Senate Bill 840, which allows for mixed-use residential housing on any land that’s zoned to allow for office, commercial, retail, warehouse or existing mixed-uses without needing a zone change.
SB 840 "is going to open a ton more land for housing development, and I think do it in a way that is going to be more appealing, or maybe less intrusive than other development,” said Emily Brizzolara-Dove, a policy adviser for Texas 2036. “In those zones that are already zoned for commercial use, I think that housing is going to be a better and higher use of that land.”
Austin has already seen developers express interest in adding mixed-use housing to these types of sites, including a proposal to add 900 residential units to 200 E. Riverside Drive and to add 2,400 units to the Anderson Square site in North Austin.
The bill doesn’t allow for residential uses on land that has heavy industrial uses or is located close to heavy industrial sites or military bases. SB 840 only applies to cities with more than 150,000 residents that are also in a county with more than 300,000 residents.
While SB 840 will only apply to big cities in Texas, Parenteau said these cities can serve as a good test market on how this bill will the multifamily market and could see the application of the bill widen to smaller cities in the future.
Making it harder to kill new projects
One of the key changes made during the session focused on making it easier for housing projects to make it through the approval process. House Bill 24 raises the protest thresholds on zoning changes for new housing projects from 20% of adjacent landowners to 60%.
Anderson said this change was long overdue because the previous law would allow for proposed housing projects to be killed by a very small minority of community members.
“With housing affordability being such a big issue, allowing single homeowners and single landowners to protest and just easily kill so much housing — it just doesn't make sense,” he said.
Anderson also said the language of HB 24 clarifies how cities can rewrite land development codes around the construction of new housing, and he hopes this bill could make it easier for Austin to take another run at updating its land development code that was last overhauled in 1984.
The city of Austin had tried to update its land development code before the pandemic in a process that was called CodeNext. The city failed in its efforts to update the land development code after a judge ruled it didn’t properly notify property owners in the city about the impacts of the code update.
Making it easier to build smaller
Another bill that should make it easier to build more homes in the state is Senate Bill 15, which prohibits cities from requiring new homes to be built in housing developments that are five acres or larger on lots that are more than 3,000 square feet.
This bill also only applies to cities with more than 150,000 residents in counties with more than 300,000 residents.
The hope is that homes required to be built on smaller lots will be smaller and therefore more affordable. The city of Austin has had a similar thought process in its efforts to pass the HOME Initiative, which reduced the minimum lot size to 1,800 square feet.
“Land is incredibly expensive, generally speaking, and if you can reduce the cost of land, you can make that house a little bit cheaper,” Parenteau said.
When will it make an impact?
Although experts see these bills as a way to make it easier to build in Texas, it’s likely to take time before the impact is felt due to the current real estate market being constrained by increased construction costs and higher interest rates, Anderson said.
“One issue we're still facing right now are just capital markets, and there's just a lot of weirdness out in the economy right now,” said Anderson. “Once it is a builder's market again, and we're looking to add a lot of housing supply across the state of Texas, these bills are going to really help move the needle in having that supply.”
Other constraints these bills have is they mostly apply to large cities in large counties in Texas and don’t apply to smaller cities. In Central Texas, for example, it's the smaller cities that have the most amount of growth as home prices in these towns are generally at more affordable levels.
Parenteau, Anderson and Brizzolara-Dove all said that more work around housing policy is needed in Texas."
Source: Austin Business Journal
Written by: Sean Hemmersmeier
Published: July 3, 2025
Posted by Grossman & Jones Group on
Leave A Comment