Big cities like Dallas are poised to see more multifamily housing built, assuming the enactment of SB 840, which will allow developers to bypass rezoning when building multifamily or certain mixed-use projects on land zoned for commercial use.
The senate bill, written by Sen. Bryan Hughes (R-Mineola), received bipartisan support in both chambers of the Texas Legislature this past legislative session as part of a push by lawmakers to address the state’s housing shortage. It’s now awaiting Gov. Greg Abbott’s signature, however, it can automatically become law after a prescribed number of days unless the governor vetoes it, per the Texas Constitution.
While boosting housing stock was a top priority of lawmakers this session and multiple bills with that aim were passed, SB 840 may be one of the most impactful because it essentially eliminates municipal authority over rezoning when it comes to multifamily housing or mixed-use projects where at least 65% of the square footage is residential.
That being said, SB 840 would only apply to cities with populations of more than 150,000 located in counties with populations greater than 300,000. Such cities in North Texas include Dallas, Fort Worth, Arlington, McKinney, Irving, Garland, Plano, Grand Prairie, and Frisco.
What Would SB 840 Actually Do?
SB 840 requires local governments to allow developers to build multifamily housing projects on sites located “in a zoning classification that allows office, commercial, retail, warehouse, or mixed-use.”
The bill offers few exceptions to the new allowance (proximity to land zoned for heavy industrial use, for instance, can be a factor) and goes on to essentially preempt local regulations related to historic preservation, overlays, planned development districts (PDs), or other special-use districts.
Additionally, rather than local officials negotiating and having final approval over building height and density, provisions in SB 840 would govern those aspects of qualifying projects. The bill allows a density of up to 36 units per acre or “the highest residential density allowed in the municipality,” whichever is greater. When it comes to height, buildings can reach 45 feet or “the highest height that would apply to an office, commercial, retail, or warehouse development constructed on the site.”
Dallas’ development code provides for unlimited housing density per acre in certain areas. Hypothetically, SB 840 would allow a developer to buy a commercial property almost anywhere in the city limits and replace it with multifamily housing of some unnegotiated height with no cap on units, all without having to secure rezoning from the Dallas City Council.
Housing Shortage Takes Priority Over Local Control
Granted, the scenario described above would depend on economic feasibility, but it’s the kind of thing that would typically draw residents who are wary of multifamily housing to city meetings to voice their concerns and attempt to sway officials from approving a rezoning request.
Whether or not state lawmakers considered such residents this session is unclear, but the housing shortage seems to have lit a fire in the Capitol as Texas tries to kick development into gear to make up the estimated home deficit of more than 300,000. In a lot of cases, lawmakers targeted municipal regulations that inhibit, delay, or increase the cost of housing development.
“Housing affordability has become a crisis,” said John Bonura, a policy analyst for the conservative Texas Public Policy Foundation, which supported SB 840 and even successfully lobbied for its expansion so it would apply to more cities.
Speaking with CandysDirt.com, Bonura referred to a University of Houston study that found 90% of surveyed Texans thought housing affordability was a problem in their part of the state. He argued that local regulations have been artificially creating scarcity and driving up home prices while also infringing on property rights.
“Using state authority to clear local regulation helps address and reaffirm the property rights of Texans, of property owners to be able to build so long as things aren’t dangerous or nuisances,” he said. “Our entire philosophy this session was removing local barriers to increasing density and supply to address the housing unit shortage but also address the actual demand of consumers.”
Dallas Cothrum, CEO of the land use and zoning firm Masterplan Consultants and Dallas Morning News contributing columnist, expressed his excitement for SB 840’s impending enactment in an op-ed on Saturday.
He told CandysDirt.com that vacant offices, old shopping centers, and underperforming commercial properties are ripe for transformation into badly needed housing. SB 840 will also neutralize the impact of NIMBYs by largely taking rezoning for multifamily housing out of local officials’ hands.
“I think a lot of elected officials are going to feel relief,” Cothrum said. “There’s a housing shortage across Texas and this is going to give them an opportunity to not have to be the bad guy.”
He argued that the last area of open, widespread discrimination in society these days is against renters.
“It’s unfair and wrongheaded, but it happens all the time,” he said. “Elected officials listen to it because their constituents say ‘I don’t want apartments,’ which in some cases means ‘I don’t want a school teacher or a nurse’ [living here].”
‘Our Residents Need To Be Heard’
CandysDirt.com reached out to the Dallas Planning & Development Department and asked a number of questions regarding SB 840. A spokesperson said officials will analyze the potential impacts if and when it becomes law.
Officials from Dallas did testify against the bill when it came before the Senate Committee on Local Government back in March. Council Member Jesse Moreno (District 2) criticized SB 840 and other similar bills that disempower local control over development.
That very local control has led to flashpoints around things like updating the city’s comprehensive land use plan, reducing parking minimum requirements, and rezoning for the controversial Pepper Square development. Officials were accused of running roughshod over the concerns of residents who are critical of increasing housing density.
Even still, City Hall was a local venue residents could engage with. While it is almost certain that developers will continue to hold meetings with residents over their projects, SB 840 ensures there’s no local mechanism to check applicable developments.
In a statement to CandysDirt.com, Council Member Kathy Stewart (District 10) decried the looming enactment of SB 840, which she said would essentially strip residents of their right to provide input on zoning changes in and around their neighborhoods.
“I’ve assured my residents for the past two years that any changes to the land use of the former grocery store and restaurant sites would require a public zoning process. This bill takes that opportunity for input away. Our residents need to be heard when land use changes are proposed,” Stewart said.
She went on to point to infrastructure and traffic needs, the impact on local public schools, and the overall compatibility of multifamily use with certain neighborhoods as serious issues the bill fails to consider.
Litigation Could Be Likely
Stewart isn’t the only one who’s skeptical about how SB 840 might play out in practice. Dallas resident Marc Lombardi, a business attorney who specializes in investment and real estate funds, said he doesn’t think the bill’s authors considered PDs like Pepper Square, which are numerous in the city.
“Pepper Square was tailored with some height and some density, and those two things were very heavily negotiated and discussed,” he told CandysDirt.com. “Obviously, there were serious community concerns with that, but with [SB 840], they’ve got their height by right and perhaps now they can go from X density to Y density.”
PDs are essentially customized zoning designations that can allow for a lot of flexibility that wouldn’t typically be permitted under standard zoning or a particular area plan. They’re established through the passage of specific ordinances based on proposed design and building plans that themselves are the product of collaboration between stakeholders.
“It’s a negotiated process that the community, the city, and the developer all sit down at the table and work through to come up with a project that really is unique to the area and meets in some form or fashion everybody’s needs and goals,” explained City Plan Commissioner Melissa Kingston (District 14), speaking with CandysDirt.com.
She pointed to a number of development details ranging from the burying of power lines to the crafting of more thoughtful interaction between the street and building site to improve walkability, and, of course, there are height and density variances.
“I’m hopeful that the development community will see the value in some of those things and continue to work with the community on developing smart projects,” Kingston said. “But this law would certainly give them more authority to not do so.”
She said she expects litigation will be spurred by the bill’s enactment, if not from residents opposed to particular multifamily projects then by disputes that might arise if developers attempt to circumvent traditional zoning by engaging with the permitting or platting process in bad faith in a bid to get their mixed-use projects under SB 840’s purview.
“Anytime we do something like this it’s likely to get challenged in the courts, so I think we’re probably at least a few years away from having some sort of definitive answers about the impact of this,” Kingston said.
If SB 840 becomes law, its provisions would go into effect on September 1.
