Texas lawmakers are reviewing several bills this year that could significantly roll back some of Austin's building rules, potentially opening the door to more housing development citywide.

The context

State-level discussion over the bills—which are aimed only at the biggest cities and counties in Texas—ties into longstanding local debates over Austin's complex and antiquated zoning rulebook, managing growth and added density, and the protections that Austin's abundant single-family neighborhoods receive.

The proposals are under consideration in a session in which the Texas Legislature is pursuing several proposals targeting local government control of various municipal issues, including land use. The bills would affect other large cities in addition to Austin, but the capital city has frequently been referenced as an example of one with uniquely outdated and restrictive zoning rules.

Austin's two most recent efforts to comprehensively revise land-use regulations lasted years and cost millions of dollars but ended up producing no permanent changes after residents sued over the city's process and halted the effort.

Last year, City Council approved several more specific updates to encourage more residential development on major roadways and to grant taller height allowances for projects with affordable housing.

The details

Among many land-use proposals in the Texas House and Senate this year, a pair of similar measures is aimed at two topics that have frequently come up in local housing debates: Austin's strict compatibility limits and minimum residential lot size.

Local compatibility standards were first enacted to protect neighborhoods from the effects of new construction viewed as out of place. They control building features such as height over a certain distance from single-family homes, limiting how big and tall projects located near existing communities can be built. Height allowances gradually increase the farther away a new project is located from a home.
Austin's compatibility standards limit how tall new construction can build near existing homes. (Courtesy city of Austin)
Austin's compatibility standards can limit the height of new construction up to several hundred feet away from single-family homes. City Council voted in 2022 to relax compatibility's reach and height restrictions along major corridors only, but that change is now facing a legal challenge.
The effects of compatibility in Austin can stretch up to 540 feet away from a residential property line, several times more than similar limits in other major cities in Texas and across the country. In comparison, the effect of compatibility in many other municipalities extends just 50 feet away from homes.

Either Senate Bill 491 drafted by Sen. Bryan Hughes, R-Mineola, or its companion House Bill 2198 by Rep. Cole Hefner, R-Mt. Pleasant, would stop such height restrictions in large Texas cities from applying after 50 feet.

Hefner said despite professional Austin staffers having briefed city leaders multiple times on the negative side effects of the city's broad compatibility rules, no “significant steps” have been made.

“When you look at Austin, in many ways it’s 10 times more restrictive than the other major cities in our state. And we’re just wanting to re-establish supply and demand, let the free market work, and help some more affordable housing around here,” Hefner said during a March 29 House committee hearing.

Another Austin rule in the Legislature's sights is the local residential minimum lot size, or the amount of land required to build a home. In Austin, a property must be at least 5,750 square feet to qualify for such development. The city's code also requires a set distance for setbacks, or the spacing between a building and other features.

Mandated lot sizes vary across Texas from the larger limit in Austin to a 1,400-square-foot minimum in Houston—more than four times smaller than the local limit. SB 1787 from Sen. Paul Bettencourt, R-Houston, or the companion HB 3921 from Rep. Craig Goldman, R-Fort Worth, would set a 1,400-square-foot minimum statewide.

“One of the most significant costs in any construction of any new residential house is the price of land on which residential dwellings are built. Land costs currently comprise about one-quarter of the sale price of a single-family home,” Bettencourt said during a committee hearing April 3. “The Senate Bill 1787 seeks to alleviate these problems in our state’s fastest-growing economies.”

Austin City Council recently signed off on a plan to allow some historically larger lots to be split up into smaller sites for smaller construction, but minimum lot requirements overall have not changed.

Split opinions

Developers, pro-housing advocates and Austin housing staff have long said cutting into Austin development rules such as compatibility standards and lot size requirements will unlock more homes in the city, likely boosting affordability.

“By artificially restricting the supply of buildable land and essentially forcing young, first-time homebuyers to purchase more dirt than they need to house their families, we increase the cost of housing, and we prohibit the market from functioning efficiently,” Texas 2038 policy adviser Emily Brizzolara-Dove said during the April SB 1787 hearing.

Such moves have been generally opposed by Austin homeowners and neighborhood groups concerned lifting those limits could infringe on private property rights, hike their housing costs, interfere with established neighborhood character, and reduce the quality of life for residents near new projects.

During recent hearings, Barbara McArthur said limited compatibility would reduce Austinites' enjoyment of their homes and “literally cast a shadow” on their investments. South Austin resident Jeff Bowen questioned the need for looser building rules in a city that federal data points to as a national leader in housing construction. And Central Austin resident Betsy Greenberg told lawmakers compatibility should remain in place as a homeowner protection.

“You probably don’t want to look at a skyscraper directly outside your home’s window that is only 50 feet away. I feel the same way and ask you to respect that,” Greenberg said.

Proponents, including the legislation's authors, said change is needed to make more housing accessible to more Texans at lower cost, to standardize policies statewide, and to reform outdated rules that city governments have been unwilling or unable to tackle.

Developer representatives speaking at recent hearings have said Texas needs more standardized building rules such as the ones proposed in the new bills. Several detailed how Austin's rules ended up costing the city more affordable housing that they had planned to build.

Elle Allen with Wolfe Capital told lawmakers that compatibility limits ended up turning what the firm originally envisioned as 100-plus units of affordable workforce apartments into a 25-townhome project with entry prices ranging from $550,000 to $650,000. And Riverside Homes founder Scott Turner said SB 1787 would increase the potential to add more smaller homes on what are now larger lots.

“This bill would allow 1,400-square-foot lots. ... I can build four detached 1,200-square-foot homes on four 1,400-square-foot lots, and that’s four homes on less land than one minimum lot here in Austin,” Turner told senators. “That land is pretty expensive here in Austin right now, and these homes would be a lot more affordable.”

As of press time, the House and Senate versions of the compatibility and lot size bills were all pending in their committees.