State Law | SB 840 (2025)

Texas SB 840 (2025): Homes on Commercial Land Without Rezoning

SB 840 requires the largest Texas cities to allow apartments and mixed-use buildings on land zoned for offices, shops, commercial use or warehouses. The housing is allowed by right, which means city staff approve it when it meets the written rules, with no rezoning hearing and no council vote. The law also caps how low a city can set density, height, setbacks and parking for these projects. For a small builder, note the definition: three homes on one site already count as "multifamily residential."

What SB 840 Is

SB 840 is Chapter 778 of the Acts of the 89th Legislature, Regular Session. Its author was Senator Bryan Hughes, according to the bill history. The Senate passed it 23 to 7 on March 24, 2025. The House passed it with amendments 106 to 33 on May 21, 2025, and the Senate agreed to the House changes 31 to 0 on May 26. The Governor signed it on June 20, 2025, and it took effect on September 1, 2025.

The enrolled bill adds Chapter 218 to the Local Government Code and a Section 211.0011. HB 24 (2025) also added a Section 211.0011, with different text, so cite it as "Section 211.0011, added by SB 840." A second bill, SB 2477 (2025), created Chapter 218 too. The official code merges the two and lists both bills as the source of the shared sections, with SB 840's text controlling where they overlap.

Where SB 840 Applies

Section 218.002 limits the chapter to "a municipality with a population greater than 150,000 that is wholly or partly located in a county with a population greater than 300,000." That is the same test SB 15 uses. By VanPlex count from 2020 Census figures, 19 cities pass: Houston, San Antonio, Dallas, Austin, Fort Worth, El Paso, Arlington, Corpus Christi, Plano, Lubbock, Irving, Garland, Frisco, Grand Prairie, McKinney, Brownsville, Killeen, Pasadena, Mesquite. The SB 15 page explains how the count was made and lists the close cases.

Inside those cities, Section 218.101 requires the city to allow mixed-use residential or multifamily residential development "in a zoning classification that allows office, commercial, retail, warehouse, or mixed-use use or development." Two definitions in Section 218.001 decide what counts:

• Multifamily residential is the use of a site for three or more dwelling units, in one or more buildings, including condominiums.
• Mixed-use residential is a development in which residential uses are at least 65 percent of the total square footage.

Four kinds of land are excluded under Section 218.101(c): zones that allow heavy industrial use; land within 1,000 feet of an existing heavy industrial use or development site; land within 3,000 feet of an airport or military base; and land in a military clear zone or accident potential zone, which are areas the military designates near its airfields.

What a Covered City Cannot Require

Once a project qualifies, Section 218.102 sets floors and ceilings on the city's rules. A setback is the required distance between a building and the property line.

Source: Local Gov. Code chapter 218, added by SB 840, in the enrolled bill text.

Under Section 218.102(b), when staff find a project meets the applicable rules, the city "shall administratively approve the permit or other authorization" and "may not require further action by the governing body." The council has no vote on a complying project.

What Cities Keep

Section 218.003 lists the city rules SB 840 leaves in force. A covered city can still apply its rules on short-term rentals, water quality, density bonus programs (which allow larger buildings in exchange for community benefits), access to sewer and water service, building codes, stormwater, and historic preservation, "including protecting historic landmarks or property in the boundaries of a local historic district." A lot in a local historic district therefore still follows the city's historic preservation rules.

Deed restrictions need a separate check. SB 2477's enrolled text says the chapter does not prevent "a property owner from enforcing rules or deed restrictions imposed by a property owners' association or by other private agreement." The codified Section 218.003 shows SB 840's wording, which does not mention deed restrictions. Read the recorded restrictions on any commercial lot and ask a Texas attorney how they apply before you rely on SB 840.

Converting Office, Retail and Warehouse Buildings

Sections 218.202 to 218.204 add rules for converting an existing building to housing. They apply to an office, retail or warehouse building that was built at least five years before the conversion starts, where at least 65 percent of the building, and of each floor, becomes residential. For those conversions a covered city may not require:

• a traffic study or a traffic fee;
• parking spaces beyond those that already exist on the site;
• utility upgrades beyond the minimum the project needs;
• design rules stricter than the International Building Code (IBC);
• a new impact fee, unless the land already carried one.

Impact fees are one-time charges a city collects for road, water or sewer capacity. SB 840 also reworded Local Government Code 395.011, the impact fee statute, and added the conversion exception. The bar on roadway impact fees in a city's extraterritorial jurisdiction (the land just outside city limits) already existed, and now sits in Section 395.011(b-1).

Timing and Enforcement

SB 840 applies only to projects initiated on or after September 1, 2025, under Section 4 of the enrolled bill. For conversions, the rules apply where the building permit application was submitted on or after that date.

Section 218.301 lets a housing organization or a person harmed by a violation sue the city for a declaratory judgment (a court ruling on what the law means) or an injunction (an order to stop). The court "shall award court costs and reasonable attorney's fees to a claimant who prevails." The Fifteenth Court of Appeals is the only intermediate appeals court that can hear an appeal in these cases.

What SB 840 Means for a Small Builder

SB 840 works on commercial land. If you own or can buy a lot zoned for office, retail, commercial, warehouse or mixed use in a covered city, a triplex or fourplex on it counts as multifamily residential. The city must allow it with no rezoning, may not cap its density below 36 units per acre or its height below 45 feet, and may require no more than one parking space per home. City staff approve it with no council vote.

Single-family zones keep the city's own rules. For a lot zoned for one house, the number of homes still comes from the city code: see the Austin, Houston, Dallas and San Antonio pages. A building of three or more attached units also moves to the commercial building code, which the building codes page explains.

Building Rules That Come With an SB 840 Project

SB 840 settles where housing may go. The building itself still follows state and federal building rules. Under the definitions in Local Government Code 214.211, a building of three or more stacked units counts as commercial, so it follows the commercial code, whose state minimum is the International Building Code as it existed on May 1, 2012. For energy, the state uses the 2015 International Energy Conservation Code for these buildings, under the State Energy Conservation Office.

Two more rules shape the design. Under the federal Fair Housing Act, the ground floor units of a building with four or more units, and every unit in such a building with an elevator, must meet accessible design rules. And SB 2835 (2025) lets a city allow an apartment building with a single stairway if it has no more than six stories above grade and no more than four units on any floor, plus sprinklers and other listed safety features. Each city decides whether to allow it. The building codes page covers these rules in full.

Permit data shows how large apartment buildings compare with small ones in the covered cities. In 2025 Dallas issued permits for 346 buildings of five or more units and 4 buildings of three or four units. Austin issued 113 and 1, and Houston 123 and 2, according to the Census Bureau's Building Permits Survey.

Where to Go Next

Related on VanPlex: the Texas multiplex guide overview and the missing middle guide for how Canadian cities handle small apartment buildings.

Frequently Asked Questions

Official sources (checked October 2026)