Texas Approves SB 840 for Easier Multi-Family, Commercial Conversions

Texas Senate Bill 840 Eases Zoning Rules to Boost Multifamily Housing — Office of the Governer Greg Abbott /Facebook

The Texas legislature recently approved Senate Bill 840, now awaiting Governor Abbott’s signature. The bill promises significant benefits for developers by simplifying multifamily housing approvals and allowing the conversion of commercial properties without rezoning in major Texas cities. This legislative change aims to accelerate housing supply while challenging existing zoning practices.

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Transforming Housing Regulations

SB 840 represents one of the most significant legislative shifts impacting multifamily housing development in select Texas cities. It opens already developed sites for multifamily projects, removes the need for zoning district changes or variances, and facilitates the conversion of commercial buildings into residential units. The bill prompts municipalities to reevaluate their comprehensive plans and development strategies, responding to the new regulatory environment. However, cities will face infrastructure challenges, likely resulting in new local rules to address these changes.

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Multifamily Use By Right

The core provision of the bill allows multifamily housing construction or conversions on land zoned for commercial, office, warehouse, retail, or mixed-use without the need for rezoning. Rezoning often faces opposition from neighboring communities, so this provision effectively grants multifamily housing as a use by right in these zones.

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Benefits and Challenges for Developers

Developers looking to build new multifamily projects or repurpose commercial buildings, such as vacant office spaces, stand to gain from the bill. Conversely, developers who benefited from protective zoning around existing multifamily developments may see their market positions threatened as new projects gain easier approval.

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Limited City Applicability

The bill applies exclusively to cities with populations over 150,000 located within counties of at least 300,000 residents. This limits its reach to fewer than 20 Texas cities, including McKinney, Frisco, Irving, Plano, Arlington, Dallas, Fort Worth, Austin, San Antonio, and Houston.

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Administrative Approval Focus

SB 840 emphasizes streamlined administrative processes to avoid lengthy amendment or variance applications. Permits and authorizations are expected to be approved administratively, reducing delays and bureaucratic hurdles for developers.

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Development Standards Clarified

The bill outlines specific standards for multifamily developments:

Density: Projects can reach either the municipality’s highest allowed multifamily density or 36 units per acre, whichever is greater. Cities that previously allowed higher densities for select projects may now extend these standards city-wide.
Height Limits: Developments may build up to the tallest permitted building height in the zoning code or 45 feet, whichever is higher.
Setbacks: Building setbacks cannot exceed either the zoning code’s setback requirements or 25 feet, whichever is less.
Parking: Parking requirements are capped at one space per dwelling unit, with no mandates for multi-level parking structures.
Floor Area Ratios (FARs): There are no restrictions on the ratio of building floor area to lot size.
Fee Waivers: Fees related to building permits, street closures, expedited reviews, impact fees, and parkland dedication will be waived for building conversions.
Study and Mitigation Waivers: Certain studies, such as traffic analyses, and mitigation requirements, including additional parking or traffic effect measures, will not be required for conversions.