Texas Treads A New Path Into Zoning To Battle Housing Crisis

Like much of the nation, Texas is grappling with a housing affordability crisis due to dramatic underbuilding and rising costs.

Despite leading the country in new housing construction, the state’s rapid growth has outpaced supply, leaving many residents struggling to find affordable options.

This challenge mirrors a national trend as cities and states across the U.S. revisit restrictive zoning laws that have long limited the types and density of housing that can be built, contributing to higher prices and limited availability.

Ending single-family zoning hasn’t been a serious consideration in the state, even in Dallas. Texas lawmakers, however, are taking their turn at considering sweeping zoning reforms like those being debated and enacted in other states. These land resets seek to increase housing supply by navigating the thorny single-family zoning debate.

Like North Carolina and other states, Texas Senate lawmakers want to allow residential development “by right” in commercially zoned areas and ease converting office buildings to residential, another hot nationwide trend. They are also considering legislation to substantially reduce minimum lot sizes, which proponents there and elsewhere in the country believe will mean more affordable starter homes.

These are all outstanding free market issues that allow the actual market to respond to the actual needs of consumers as opposed to shirking this to the government to either do things it’s not allowed to do or it’s not competent to do,” John Bonura, a policy analyst with the Texas Public Policy Foundation, told a Senate committee hearing.

The Texas Senate has already passed two bills and sent them to the House for consideration. Lawmakers are also weighing legislation that makes it more difficult for “not in my backyard” opponents to block zoning changes, which has drawn public opposition.

Texas Population Boom

Like other parts of the Southeast, Texas experienced a population boom over the past several years. Between 2023 and 2024, U.S. Census data shows that the Lone Star State had the highest absolute growth in population.

Home builders and apartment developers responded with a heavy construction pipeline, but that hasn’t been enough to stem affordability chokeholds throughout the state.

Texas needs more than 300,000 new homes to match the population boom, according to Up for Growth, a public policy housing nonprofit devoted to solving housing shortage and affordability issues.

The National Association of Home Builders’ February report found that 9.2 million households in Texas are priced-out of a median-priced home ($445,713), second to California’s 10.3 million. However, at 79.2% of total households, Texas is middle of the pack nationwide, an indicator of the affordability problem’s breadth.

For all the talk about California’s affordability problems, it’s below the middle of the pack and better than Texas, such as better can be, at 73.7%.  

No state is below 50%. Delaware is the closest, with 58% of households that can’t buy a median-price home in the state. Maine has the highest percentage, at 91.2%.

Houston Serves as a Model

Houston is known for lacking formal, comprehensive zoning, which has been good and bad for the city. Housing development has flourished, and so has urban sprawl.

The city reformed land policy in 1998, reducing lot sizes to 1,400 square feet in the city center. A 2013 update expanded the policy citywide.

One of the Texas Senate bills is modeled after Houston’s reforms and is designed to make starter homes more accessible and affordable.

It would prohibit cities with populations greater than 90,000 (in counties of 300,000 or more) from requiring residential lots in new subdivisions to be larger than 1,400 square feet — down from the widely typical range of 5,000–7,500 square feet.

The bill also prevents cities from imposing density limits below 31.1 units per acre and restricts local regulations, such as setbacks and height limits, for lots under 4,000 square feet. SB 15 applies only to new subdivisions on unmapped, unplatted land larger than five acres, leaving existing neighborhoods and HOAs unaffected.

Supporters say the measure will boost housing supply and affordability. Opponents argue that it undermines local control and could strain infrastructure.

Urban planners, architects, and housing advocates nearly everywhere there is a housing shortage have urged shifting to small lot sizes.

Ryan Kilpatrick, founder and CEO of Flywheel Community Development Services in Grand Rapids, Michigan, wrote on his Substack that lowering lot sizes is “low-hanging fruit” for solving the housing shortage in his area.

“Don’t be afraid to allow lots smaller than you would personally choose,” he wrote. “Remember that you don’t pick anyone else’s wardrobe or choose what kind of car they drive.”

SB 840

This bill would require cities to allow multifamily and mixed-use residential developments "by right" in zoning districts designated for office, commercial, retail, warehouse, or mixed-use purposes, effectively streamlining the approval process for such projects.

Bonura told the Senate committee that this would help clear unused office space.

Building up in that urban core helps address and reverse gentrification in those areas because you have people closer to those high-demand jobs that a city needs for its health,” he said.

The bill excludes heavy industrial zones from these provisions and includes measures to maintain historic district design standards while allowing Texas cities to implement affordable housing incentives.

HB 24/SB 844

The opposition has formed to this legislation because of the bar that would be set for attempts to push back on proposed zoning changes.

Those protesting a change, whether requested by the property owner or the city seeking more restrictive zoning, would face an increase in the number of signatures necessary from 20% of the affected nearby owners to a minimum of 60%.

A simple majority of a governing body could override the protest. Wider opposition could trigger the need for approval from a supermajority (three-quarters of the governing body).

Requiring 60% of adjacent landowners to sign on is onerous and seems designed to severely limit citizens’ ability to protest,” an Austin retiree said in published comments on the committee hearing.

Other comments echoed the sentiment.

A Dallas pastor countered that the current process allows the vocal minority to wield veto power.

“This ensures development decisions are not held hostage by narrow interests while still allowing those directly impact to raise legitimate objections,” the pastor wrote. “This legislation reflects a healthy skepticism of concentrated power.”