The New Law of Building

The angriest rooms in Dallas last year involved zoning discussions. The city was updating its land use plan for the first time in nearly two decades, and homeowners in single-family neighborhoods across the city organized and packed public meetings at rec centers, churches, and libraries. They worried about apartments careening into their blocks and changes accelerating the loss of their neighborhood “character.” They let the planners have it.

The opposition to the ForwardDallas plan seized on fears percolating for years. What were once existential concerns, most often expressed during dozens of disparate zoning disputes, roared to life over this 64-page document. To many homeowners, anything less than denial was an affront to their property rights. (The City Council eventually adopted the plan by a vote of 11-4.)

This year, the Texas Legislature signaled it was fed up with neighbors joining together to kill multifamily housing projects. Legislators passed a law that effectively makes any commercially zoned piece of land in the state’s largest cities and most populous suburbs eligible for apartments, townhomes, condominiums, or mixed-use developments.

After Texas Democrats killed bills in the 2023 session that would have permitted housing on smaller lots and legalized accessory dwelling units like garage apartments, Republican lawmakers returned to Austin two years later even more mindful of the need to chip away at the state’s growing affordability crisis. They brought with them a strategy to placate single-family sympathizers in the Legislature: They wouldn’t touch those neighborhoods, but they’d strip away the power of residents to block multifamily projects elsewhere.

State lawmakers are terrified of a future similar to California’s, where red tape and bureaucracy have contributed to homes and rents being prohibitively expensive. The Texas Comptroller built momentum through a study that reiterated oft-cited data that the state needed another 306,000 homes to accommodate its population growth while moderating prices. The report found that the median cost of a home in Texas had increased by 40 percent between 2019 and 2023 to above $350,000. The median age of a first-time buyer ballooned to 38, the oldest in the state’s history, according to the National Association of Realtors. The typical repeat buyer last year was 61 years old, another record high.

Lt. Gov. Dan Patrick made housing production one of the session’s priorities. Many pro-housing bills passed with bipartisan support and became law on September 1, effectively taking the power of regulating residential building in commercial districts away from municipalities and counties.

The most consequential for Dallas appears to be Senate Bill 840, which allows developers to build multifamily housing or mixed-use developments in areas zoned commercial, retail, or office by right, meaning without a zoning change. The bill’s rules are now law in any city with at least 150,000 residents within a county that has a population of at least 300,000. In addition to Dallas proper, Garland, Grand Prairie, Irving, and Mesquite are the county’s other qualifying municipalities. Plano, Frisco, and McKinney each qualify in Collin. Tarrant’s include Fort Worth and Arlington and Denton’s only eligible city is its namesake.

The new law allows buildings with a maximum height of 45 feet, which is between four and five stories, or the tallest height allowed in the city’s zoning code, whichever is greater. It green-lights density, permitting developments of up to the maximum number of units a city allows. Some parts of Dallas, such as Uptown, allow unlimited density; that means all commercial zoning can be transitioned into housing with height restrictions but no limit on density. Mixed-use is allowed so long as residential occupies at least 65 percent of the project. Setbacks can be no more than 25 feet and the most parking that can be required is a single spot per unit. 

Before SB 840, developers would need a zoning change to build an apartment on a piece of land where zoning did not allow it or did not allow the height, density, or design standards the developer sought. That’s an arduous process that land use attorneys say can add as much as a year or 18 months to the project, which causes prices—and rents—to increase.

The new law vaporizes these local restrictions. “The bill aims to unlock housing potential in areas historically zoned for specific commercial uses,” wrote the bill’s author, state Sen. Bryan Hughes, R-Mineola.

According to an analysis of zoning districts, nearly 32 percent of Dallas County’s land mass is affected by the law. In a flash, SB 840 made it possible to build new multifamily housing and mixed-use developments on about 118,000 acres of land across the county. (About 43 percent of the city of Dallas qualifies, which is just under 96,000 acres.) 

“What the bill does is it opens up sites that would have been very difficult to get through a rezoning process for political reasons, neighborhood opposition,” says Tommy Mann, a land use attorney and shareholder at Dallas-based firm Winstead PC. “I would say within three to five years there will be an interesting retrospective to do on the city of Dallas.”

The topline goal of SB 840 dovetails with the city’s update to its land use plan. ForwardDallas’ housing focus was not within the tree-lined blocks of existing single-family neighborhoods, but along the wide roads and public transit corridors that shuttle people throughout the city. The plan declared these to be the most appropriate places for multifamily density. SB 840 is aspirin for the zoning headache: Those corridors are most often zoned for commercial, retail, or office. 

“This (law) allows us to be able to respond more quickly to areas where we said through our citywide visioning sessions that this is where we should put more housing,” says Andrea Gilles, a deputy director for planning and development at the city of Dallas. “We don’t have to always go through separate, individual zoning processes to be able to get some housing in these areas.”

Despite only becoming law on Monday, its impact has already been felt at Dallas City Hall. Council member Chad West, who represents North Oak Cliff, last month cited SB 840 as a reason to support a rezoning of about 35 acres around the corridor that includes Hampton and Clarendon roads. The city needed Council’s permission to incorporate additional design requirements for developments, such as sidewalks, locating parking behind the building, and forcing drive-through businesses to obtain a specific use permit. Getting ahead of the bill meant that developers must now adhere to the city’s design standards for this area despite the new options afforded by the state law. 

Across town in North Dallas, a neighborhood association had sued over the redevelopment of the aging shopping center known as Pepper Square. Development company Henry S. Miller last March won Council approval to transform the 1977-era complex into a mixed-use project that included 900 apartments. The neighborhood dropped its lawsuit in August and cited SB 840 as a reason.

Mayor Pro Tem Jesse Moreno, the former chair of Council’s Housing and Homelessness Committee, testified in March against the bill. New Council member Bill Roth, whose campaign was rooted in opposing the Pepper Square redevelopment, last week suggested that the city consider suing to “contest this particular state law directly.”  

“I’m seriously concerned, and I understand there are folks who are out there who feel like there may be constitutional challenges and other legal challenges to this state law,” Roth said.

Housing advocates are bullish on the law’s possibilities. Ashley Brundage, the CEO of Dallas Area Habitat for Humanity, says her organization’s biggest challenge is obtaining land that is already zoned to allow housing. Before the law, Habitat actually gave back some properties it acquired through the city’s land bank program because their commercial zoning designation made it too difficult to build. The law doesn’t specify whether the developments must be for sale or rent, which means Habitat can expand beyond its traditional single-family development patterns to put up townhomes and condominiums for eligible buyers.

“It could most likely open up a lot of options in more of what you call ‘high opportunity’ neighborhoods,” Brundage says. “If you have some vacant shopping strips out there near jobs and schools—I’m thinking farther north in Dallas, where it is harder to find land like that—it could open up a lot of opportunity there for us.”

Brundage is also a founding member of the Dallas Housing Coalition, a group of more than 350 organizations that supported SB 840 and other housing bills. “Our complex network of local ordinances across the region are what contributed to this statewide housing crisis,” says Bryan Tony, the group’s executive director. “The state did have a duty to act to ensure that these local zoning powers were not being abused and driving up housing costs or blocking the next generation of North Texans from being able to live here.”

The suburbs are playing defense. The Texas Tribune reported that cities including Plano, Irving, and Arlington over the summer implemented height minimums, pricey amenity requirements, and sustainability standards well above the state’s baseline, which could make projects more difficult to pencil. Their intent appears to limit the development lawmakers would like to see rise into the sky.

Dallas sees things differently. Its city planners are treating the new law as an opportunity and is sharing information to help developers understand any new processes. That’s not surprising. Since 2010, the city has watched its population mostly stagnate while its neighbors in Collin, Denton, and Tarrant counties grew.

Gilles and Andreea Udrea, the deputy directors of planning and development for the city, say they’re now focused on improving design standards and other requirements to make projects interact better with public space. They’re eager to see where development goes naturally and respond to the patterns. Debating how a piece of land is used ate up precious time that could have been spent considering how a project is designed.

“It allows people to be more responsive to the market,” Gilles says. “Zoning takes a really, really long time to shift and change, and it often doesn’t keep pace with the market.”

Mann says “it’s still a particularly challenging time for capital markets and financing commercial real estate projects,” but once that changes, a significant barrier to new multifamily housing—zoning—will have been removed in much of the city. Dallas’ zoning is a chaotic patchwork, in part because much of the base code has been on the books since 1967 when it had fewer people and much more undisturbed land. Developers today get workarounds to local rules by creating what’s known as planned development districts. There are now more than 1,000 across town, and SB 840 applies to each of them.

The cities of Dallas, Irving, Grand Prairie, and Garland occupy 363,590 acres within Dallas County. Planners and housing advocates have supported turning derelict shopping centers into housing, pending zoning and infrastructure improvements.

Across the county, there are about 1,800 acres of parcels that house commercial buildings that are substantially more vacant, cheap, or structurally unsound compared to their peers, according to an analysis by the Child Poverty Action Lab’s data team. That amount of land is about the size of 336 Klyde Warren Parks, and the law has opened it up to conversions or redevelopment for multifamily and mixed-use. Vacant commercial land is even more prevalent, according to the analysis. There is about 26,652 acres zoned commercially but sitting unused—and that excludes natural features such as the Trinity River and the Great Trinity Forest. (The Lab Report is a local journalism project published by CPAL. Our newsroom operates with editorial independence.)

Of course, housing will not sprout on all those acres, and it could take years, or decades, for development patterns to settle. But the Texas Legislature has effectively shut down at least some of the strategies that have slowed and even killed projects in cities across the state. In so doing, the new law has accelerated the path Dallas’ planners envisioned for where to direct density—and that they tried their best to explain to residents in dozens of tense negotiations over the last couple of years.

SB 840 seems to have done what local leaders couldn’t: Quiet those rooms and allow for density in a city that has struggled to grow. 

Matt Goodman is the co-founder and editor of The Lab Report. [email protected].

By the Numbers

Editor’s Note: Taylor Crockett, a data scientist with the Child Poverty Action Lab, analyzed zoning districts to learn which parcels in Dallas County are likely to be affected by the new rules in Senate Bill 840. Data from the Dallas Central Appraisal District, CoStar, the U.S. Census, and the Texas Department of Transportation informed more specific queries.

• 117,971 acres The total amount of commercially-zoned land in Dallas County affected by the state law. That’s about 22,000 Klyde Warren Parks.

• 26,652 acres: Vacant land throughout the county that has never been developed or currently contains a demolished building. Equals to about 4,900 Klyde Warrens.

• 62.5%: The total land area in Dallas County affected by the bill in the cities of Dallas, Garland, Grand Prairie, Irving, and Mesquite.

• 113,045: The total number of buildings that are either under-used or will likely need to be demolished or significantly renovated before the parcel can be used. (The parameters include buildings that are over 75 percent vacant and older than 15 years; buildings over 60 percent vacant and older than 30 years; or are renting for less than 60 percent the rent of its submarket; buildings the appraisal district considers to be in “poor” condition that are older than 20 years.)

• 38,793: Projected number of new affordable units if Dallas develops just 20 percent of its vacant land at half of the maximum density and still reserves only 20 percent for subsidized affordable units.

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The Lab Report Dallas is a local journalism project published by the Child Poverty Action Lab (CPAL). Its newsroom operates with editorial independence.

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