The 89th Regular Legislative Session (2025)
for the state of Texas has come to an end with
Governor Abbott announcing a special session
to begin July 21, 2025. So far, 1,155 bills have
been signed into law. Several of these new
bills will impact real estate development in the Lone Star
State. We will examine some of these bills in a
series of posts.
SB 840 amends Chapter 211 of the Local Government
Code (governing municipal zoning authority) by adding
Section 211.0011 and adds new Chapter 218 of the
Local Government Code. The effect of Section 211.0011 is to
limit the zoning enabling legislation establishing the rights
of municipalities to regulate land use by making existing
Chapter 211 subject to new Chapter 218.
New Chapter 218 subsections A and B provide that a
municipality shall allow “mixed-use residential” and
“multifamily residential” development by right (no zoning
change required) in zoning districts that permit office,
commercial, retail, warehouse or mixed-use. “Mixed-
use residential” is defined as “the use or development
... of a site consisting of residential and nonresidential
uses in which the residential uses are at least 65% of the
total square footage of the development” and includes
condominiums. “Multifamily residential” is defined as “the
use or development … of a site for three or more dwelling
units within one or more buildings” and includes residential
condominiums.
SB 840 prohibits restrictive regulations on density,
height, setbacks, parking, design and other restrictions on
development, which may be a disincentive to development of
residential products. However, municipalities can still restrict
density, but the restrictions may not be less than the highest
residential density allowed or 36 units per acre, whichever is
greater. Municipalities can also still restrict building heights,
but such restrictions may not be less than the highest height
that would apply to an office, commercial, retail or warehouse
development constructed on the site or 45 feet, whichever
is greater. Municipalities can also still require setbacks or
buffers, but only to the extent that such a setback or buffer
requirement would apply to an office, commercial, retail or
warehouse development constructed on the site or 25 feet,
whichever is smaller.
Municipalities may not require more than one parking
space per dwelling unit (regardless of unit size or number
of bedrooms) or require multilevel parking structures.
Municipalities also may not restrict the floor area ratio
(FAR) – being the ratio of the number of square feet in the
development to the number of square feet of lot size of the
development. Further, in zoning districts currently zoned for
mixed-use residential, municipalities can no longer require
nonresidential uses.
Any development in compliance with Section 218
subsections A and B of the Local Government Code shall be
administratively approved or permitted, and the governing
body may not require any further action.
Section 218 Subsection C of the Local Government Code
applies only to buildings that are currently being used
for office, retail or warehouse use and are proposed to
be converted from nonresidential occupancy to mixed-
use residential or multifamily residential, and which were
constructed more than five years prior to the conversion
date. In such a case, municipalities may not require a traffic
impact analysis, construction of improvements or payment
of a fee to mitigate traffic effects of the converted building.
Municipalities may also not require additional parking or
require extension, upgrade, replacement or oversizing of utility
facilities (except to provide minimum capacity to serve the
converted building) or require design requirements. Further, a
municipality may not impose impact fees.
