Texas lawmakers could consider expanding several recently enacted housing laws across the state when they return to Austin next year, as concerns grow that population limits and local ordinances are blunting the impact of reforms intended to make housing easier and less expensive to build.
During a Senate Local Government Committee hearing Wednesday, lawmakers heard calls to broaden three bipartisan laws dealing with residential development in commercial areas, occupancy restrictions and cities’ extraterritorial jurisdictions.
Some committee members, including Chairman Paul Bettencourt, R-Houston, appeared receptive to removing population thresholds that currently limit where the laws apply.
The discussion could offer an early preview of the 90th Texas Legislature, which convenes in January. House and Senate leaders have directed committees to study housing affordability ahead of the session, while Gov. Greg Abbott has made the issue a key part of his reelection campaign.
Bipartisan support for broader housing laws
The three laws under scrutiny — Senate Bills 840, 1567 and 2038 — all passed the Legislature with bipartisan support.
SB 840, approved last year, requires certain cities to allow residential development in areas zoned for commercial use without requiring developers to go through the rezoning process. The measure passed the Senate unanimously and the House 106-33.
SB 1567 bars cities covered by the law from regulating who may occupy a home based on age, familial status or occupation. The legislation, aimed in particular at College Station, passed the Senate with only one opposing vote and cleared the House 101-29.
SB 2038, passed in 2023, established a process allowing property owners to petition or vote to leave a city's extraterritorial jurisdiction, or ETJ. It passed the Senate 28-11 and the House 127-18.
Bettencourt described the measures as “bipartisan pièce de résistance bill passages.”
“When we talk about tax relief and housing, there’s no blue. There’s no red. There’s only how much green people have to pay for each unit,” Bettencourt said.
That bipartisan approach was also reflected among witnesses.
“As an organization, we’re generally opposed to preemption. We favor local control wherever possible, and we think housing is first and foremost a local issue. But that being said, we’ve heard about the results that these bills have had so far,” Every Texan researcher Shannon Holbrook told the committee.
Cities accused of working around SB 840
Much of Wednesday's discussion centered on SB 840 and whether some cities have attempted to undermine the law.
The legislation currently applies only to cities with more than 150,000 residents located in counties with populations greater than 300,000.
Brita Wallace, general counsel for the housing deregulation advocacy group Texans for Reasonable Solutions, told senators several suburban cities adopted ordinances last year that effectively counteract the law. Some added height, amenity or other requirements that can increase the cost of residential projects.
“We are seeing some cities work very hard to blunt the impact of these reforms,” Wallace said, adding that “the population threshold leaves out many fast-growing suburbs.”
Sen. Phil King, R-Weatherford, noted that the current requirements exclude many rapidly growing cities in Tarrant County.
“Is there a need to expand that to where it applies to more counties, and maybe all counties and all cities in Texas?” King asked.
“It certainly makes sense to expand it, and especially in areas where there’s fast growth,” Wallace responded.
Sen. Royce West, D-Dallas, said he would “need to have a conversation” with officials in Arlington and Grand Prairie about whether ordinances adopted by those cities were intended to thwart SB 840.
The issue has already drawn attention in the House. During a July hearing, the House Land and Resource Management Committee heard testimony from officials representing Plano, Arlington and Grand Prairie — three cities that adopted ordinances that make developments covered by SB 840 more expensive.
Occupancy restrictions could face wider ban
Lawmakers also heard arguments for expanding SB 1567, which prevents certain cities from enforcing occupancy rules based on whether people living together are related.
Ben Crockett, a policy analyst with the Texas Public Policy Foundation and a Texas A&M graduate, previously advocated against College Station's kinship-based occupancy restrictions while attending the university.
He told senators that University Park in Dallas County continues to enforce a similar restriction because the city falls outside SB 1567's applicability requirements.
“I just heard from a young lady that lives in University Park, and she lives with another young lady. They both go to Southern Methodist University. It’s a three-bedroom home … and both of them were recently fined, I believe it was $2,000, because they live with someone that they weren’t related to,” Crockett said.
Expanding SB 1567 could make its prohibition on those occupancy restrictions applicable to more Texas cities.
Questions raised over ETJ law
Lawmakers also examined SB 2038, the 2023 law that created a process for property owners to leave municipal ETJs.
Camm Lary, a partner with the public finance law firm Allen Boone Humphries Robinson, told senators the law's effect has varied around the state.
“A lot of cities have embraced SB 2038 … but of course, some have resisted, and there have been court cases,” Lary said.
He questioned whether exceptions written into the statute “create opportunities for various interpretations and slow down, if not deprive, some people from their relief.”
SB 2038 contains several population-based exceptions, including provisions affecting rapidly growing counties and the ETJs of particularly large cities.
Lary urged lawmakers to go further by expanding SB 840 and other housing legislation to apply to “all city and county regulation.”
Housing shaping up as 2027 legislative issue
Wednesday's hearing did not result in new legislation, but it offered a look at how lawmakers may approach housing when the Legislature returns in January.
The debate is increasingly moving beyond whether the state should intervene in local housing regulations and toward how broadly those interventions should apply.
The Legislature has already demonstrated bipartisan support for measures designed to increase housing supply and reduce regulatory barriers. The next fight could be over whether population thresholds and other exceptions should remain — and how much authority Texas cities should retain to impose their own development rules.
