Reshaping Multifamily Development- Texas Senate Bill 840

On May 28, 2025, Shareholder Tommy Mann shared his initial insight into the direct and indirect impacts of Texas Senate Bill 840 (SB 840). This blog post is an update tracking responses to SB 840 by impacted municipalities.

Prior to SB 840 becoming effective, we postulated that it could become the most sweeping change to the ability for certain cities to regulate the development of multifamily projects in Texas ever adopted. Just beyond six months into the bill becoming effective, we are seeing its potential impacts, and they vary greatly by city. Several cities have adopted defensive changes to local regulations in response to SB 840. Many of these responses have the effect of drastically limiting, and in some cases, effectively eradicating the potential impact of SB 840 completely.

The result is a political and legal environment ripe with uncertainty and tension that sets the stage for potential litigation, novel questions related to the intersection of state and local laws affecting land use, and the prospect of a legislative response in 2027. At Winstead, we remain at the forefront of these issues and will continue to keep our clients informed and strategically prepared to address them.

Vested rights

Before a discussion and summary of municipal responses, a brief discussion of the intersection between vested rights and SB 840 is worth noting. Section 4 of SB 840, which is not codified in TLGC 218, states that TLGC applies to a “project initiated on or after the effective date of this Act.” No definition is provided for the term “project,” and no guidance is offered on what constitutes “initiation” of a project. In reality, real estate development projects, particularly large-scale projects, involve multiple permits, inspections, and certificates of occupancy. Thus, significant uncertainty exists around when a project is considered to have been initiated.

Further, TLGC 245, generally referred to as the Vested Rights Act, provides in Section 245.002(d) that “…a permit holder may take advantage of… change to the laws, rules, regulations, or ordinances of a regulatory agency that enhance or protect the project.” Thus, an argument exists that, even if a project is attempting to utilize SB 840 and was initiated prior to September 1, 2025, the project could elect to utilize the benefits of SB 840 that enhance it. Particularly with respect to infill projects, existing building conversions, and multi-phase, mixed-use projects, there are countless examples of projects that fall within this potentially unclear intersection of SB 840 and the Vested Rights Act.

Generally, the Vested Rights Act applies to the rules and regulations of cities, and SB 840, of course, is not a city regulation. However, as detailed below, a significant number of cities in Texas have adopted local regulations in response to SB 840. Thus, an argument exists that a project could elect to take advantage of such local regulatory changes that are believed to “enhance” or “protect” a project. From a city’s perspective, this argument can create significant frustration because it would allow a project to seemingly “cherry-pick” which rules it wants to follow. However, cities have made that exact argument in other vested rights disputes to no avail (see City of Austin v Garza, 124 S.W.3d 367).

There are likely to be many disputes involving this intersection of state and local law in the coming months and years as a result of projects seeking to take advantage of the new rights created by SB 840.

The Responses of Texas Cities

To date, multiple cities in Texas have adopted changes to local laws and policies in response to SB 840. Below is a general summary of many of those responses, and each of these local legislative responses invites further scrutiny and evaluation under the legal and political issues highlighted above, and to undoubtedly evolve in the near- and long-term future.

City of Dallas

The City of Dallas is fairly unique in that it has not adopted any amendments to local zoning or permitting regulations. Rather, Dallas is accepting the fact that SB 840 pre-empts its local regulations in the event of conflict, and the City has created a process whereby property owners and developers can seek an advanced zoning consultation and written confirmation from the City regarding how SB 840 will be applied to specific projects. The City has over 2,000 specially created planned development zoning districts that provide differing and often unique regulations for projects. Thus, the number of questions that arise with respect to how SB 840 will be applied and interpreted to a given project in a certain location is seemingly unlimited. It should be noted that the City is interpreting SB 840 to apply to both commercially zoned sites and sites with multifamily zoning classifications.

City of Frisco

The City of Frisco adopted several local regulatory amendments that, in total, appear to nearly completely prohibit the ability of a project to realistically utilize SB 840. Frisco’s adopted regulations include the following new zoning requirements affecting projects seeking to utilize SB 840.

• The City created a new use with its zoning regulations termed “heavy industrial.” The definition of this use in Frisco’s zoning regulation is exactly the same as its definition in SB 840 (see TLGC 218.001(1)) and is allowed via specific use permit (SUP) in all commercially zoned districts. An SUP is a discretionary approval of the city council after notice and public hearing that, if approved, conditionally allows the use to be developed. Thus, the city has legislative discretion as to whether or not to approve such an SUP. However, the city can now argue that the prospect of a future SUP means a site could become heavy industrial, and as such, an argument is created that SB 840’s inapplicability to sites within 1,000 feet of heavy industrial (see TLGC 218.101(c)(1)) is triggered. As such, any commercially zoned site within 1,000 feet of another commercially zoned site would be unable to utilize SB 840 for multifamily and vice versa between the sites.
• While the ground stories of multifamily projects are not required to contain retail uses, they are required to be constructed to retail building standards.
• Unless more than 200 feet from any property zoned single-family or designated for single-family uses on the city’s future land use plan, any multifamily project must be a minimum of 15 stories/150 feet in height.

There are additional requirements that have been adopted by the city, but these constitute the largest likely impact on the ability to utilize SB 840 for new multifamily construction.

City of Fort Worth

Like the City of Dallas, the City of Fort Worth is complying with the SB 840 changes. In fact, Fort Worth passed a Resolution (No 6150-08-2025) on August 26, 2025, affirming its compliance with the new law. However, unlike the City of Dallas, Fort Worth has not established a uniform process for property owners and developers to seek an advanced zoning consultation and written confirmation from the City on the application of SB 840 to specific projects. Fort Worth gives property owners and developers the option to schedule a 30-minute pre-development conference with city staff. There, the property owner and developer can discuss the application of SB840 to their specific project. Additionally, Fort Worth staff is currently drafting amendments to its Zoning Ordinance, and the City Council is expected to vote on the changes in 2026.

City of Garland

Following the adoption of Senate Bill 840, the City of Garland has initiated a review of its development regulations to maintain local oversight for multifamily construction. Although Garland recognizes that the new state law limits certain aspects of municipal discretion, the City Council has directed its staff to explore ways to reinforce Garland’s multifamily development standards within the Garland Development Code. To date, Garland staff has drafted substantial updates and presented them through the Development Services Committee and a City Council work session, where multiple rounds of discussion have occurred. On January 6, 2026, Garland adopted an initial series of amendments to their zoning standards for multifamily projects (while also noting that they anticipate future amendments), including:

• a new subsection in Section 2.52 – Special Standards for Multifamily Developments or expanding/revising Section 2.39 MF, Multifamily District;
•  increasing minimum height requirements to 40 feet (3–4 stories);
•  increasing maximum height requirements to 60 feet (5–6 stories);
• restricting surface parking in the front yard and adding design standards for structured parking;
• requiring eight-foot-wide sidewalks;
• requiring horizontal and vertical building articulations and restricting unattractive rooflines;
• adding site design criteria (block length, yard, and build-to-lines);
• incorporating an amenities list with a point system and requirements per size of development;
• building flexibility/incentives for environmental sustainability, enhanced glazing, and unique/distinct development elements;
• updating Section 4.39 to strengthen the perimeter screening requirements when adjacent to existing single-family developments;
• allowing townhomes wherever multifamily is permitted in order to encourage a mix of housing options in those locations (update in the Land Use Matrix);
• requiring applicant-paid construction signage to ensure community understanding of the state regulations; and
• revise the definition of “Development” to include conversion projects and clarifying the applicability section for Chapter 3 for water/wastewater capacity analysis

City of Austin

In Austin, an immediate effect of SB 840 was that some rezoning cases were no longer needed. Public debate then focused on the impact of SB 840 on the City’s density bonus programs, primarily in the Central Business District (CBD), where the City did not have maximum height limitations, as the City regulated density in the CBD via maximum floor-area-ratio (FAR), which the City can no longer regulate where SB 840 applies to the property and project.

Housing advocates lauded SB 840 for reducing Austin’s notorious impediments to development, while others decried it for disincentivising participation in the Downtown Density Bonus Program (DDBP) and similar programs. Under the programs, a development could earn relaxed site development regulations (such as increased maximum height or FAR) in exchange for the provision of on-site affordable dwelling units, or via payment into a City housing trust fund of fees in lieu of on-site income-restricted units.

The debate focused on the CBD as the DDBP generated the most fee-in-lieu revenue of the programs (which City Staff estimated to be approximately $40 million from 2006 to 2025), but SB 840 was also perceived by detractors as upsetting complicated sets of programs that the City had created over many years, often after numerous rounds of litigation.

In response to SB 840, City Staff proposed a maximum height of up to 350 feet in parts of the CBD. Key downtown stakeholders and commissions were opposed and recommended that the City instead dedicate incremental new property-tax revenue from denser by-right development into affordable housing trust funds. The City’s Downtown Commission emphasized that such a mechanism would provide a more durable source of funds compared to one-time fees-in-lieu payments.

One month after SB 840 went into effect, the City Council adopted an ordinance that imposed a maximum height of up to 350 feet, with maximum height going up to 700 feet in parts of downtown with participation in the DDBP. City Council could also approve additional maximum height based on the provision of community benefits pursuant to the filing of an application, a recommendation by City Staff, a review and recommendation by the Planning Commission, and a vote by City Council.

More debate and changes are expected even before the legislature reconvenes in 2027, as the City ordinance has different parts that are enacted at different times. City Staff must provide reports and recommendations to the City Council, and the ordinance contemplates a superseding ordinance for the CBD and the DDBP in 2026.

City of Arlington

• The City of Arlington amended its Unified Development Code to minimize the impact of SB 840, including changes such as: In non-residential zoning districts, multifamily and mixed-use residential buildings must meet a minimum height of six stories.
• Multifamily dwellings in non-residential zoning districts must also provide electric vehicle charging stations as 15% of all required parking.
• Multifamily dwellings require certain minimum site amenities such as a “fitness center with sauna or steam room,” “project-wide jogging/walking trails,” or a “centralized courtyard with fountain/art/sculpture.”

City of Grand Prairie

Similarly, the City of Grand Prairie has taken measures to combat the impacts of SB 840. For instance, each building with dwelling units must be comprised of the following: (i) 10% one-bedroom units; (ii) 30% two-bedroom units; and (iii) 60% three-bedroom units. Further, landscaping must comprise at least 30% of the total square footage of the development site, and each development must have at least one outdoor swimming pool at a minimum size of 13,448 square feet of surface area. Additionally, significant amounts of public art are required for projects utilizing SB 840.

City of McKinney

McKinney added regulations for multifamily development in non-residential districts. Specifically, McKinney enacted additional standards for multifamily development in non-residential districts, including:

• limits on the number of dwelling units in each building;
• minimum 14 feet ground floor height, and the ground floor shall be constructed to commercial-ready standards;
• offsets required in a façade for multifamily and mixed-use;
• prohibition on balconies facing single-family residential, with some exceptions;
• minimum building height (varies between 2–5 stories depending on the district);
• amenity and site enhancement requirements; and
• parking required to be located internally within clusters of buildings, except for guest parking provided as an amenity.

City of Plano

The City of Plano adopted changes to its zoning ordinance prior to the passage of SB 840 that impact the feasibility of multifamily development under SB 840. These amendments include the following:

• Minimum height requirements for multifamily and mixed-use development. Multifamily eligibility is tied to minimum structure heights that vary by zoning district as follows:
  •  
    • a) 120 feet – Commercial Employment (CE) and Research/Technology Center (RTC) Districts;
    • b) 75 feet – Central Business-1 (CB-1), General Office (O-2), Regional Commercial (RC), Regional Employment (RE), Light Industrial (LI-1) and Light Industrial (LI-2) Districts;
    • c) 45 feet – Corridor Commercial (CC) and Urban Mixed-Use (UMU) Districts.
• Minimum dwelling unit size requirements. Mandatory compliance with new design standards for multifamily and mixed-use residential developments. New requirements addressing sustainability, building materials, parking configuration, landscaping, amenities, and related development features.

City of Irving

The City of Irving adopted extensive amendments to its Land Development Code and related building codes that materially impair the feasibility of utilizing SB 840 for multifamily or mixed-use residential development. These amendments include the following:

• Minimum building height requirements. Irving imposes minimum building heights that exceed typical suburban multifamily construction as follows:
  •  
    • a) 85 feet and eight occupied stories – required for all multifamily and mixed-use residential buildings; and
    • b) 120 feet and eight occupied stories – required within the Urban Business Overlay district and the High-Intensity Mixed-Use District.
• Minimum dwelling unit size and unit mix requirements. Irving regulates both the distribution and minimum size of units. For projects with more than 25 units, no more than 50% of units may contain the same number of bedrooms. For projects with more than 50 units, at least 10% of units must contain three bedrooms or more, and efficiency units may not exceed 10% of the total unit count. Minimum average gross square footage per unit is:
•  
  •  
    • a) efficiency: 500 square feet;
    • b) one-bedroom: 650 square feet;
    • c) two-bedrooms: 900 square feet;
    • d) three-bedrooms: 1,100 square feet; and
    • e) more than three-bedroom: 1,100 square feet plus 150 square feet for every bedroom exceeding three bedrooms.
• Mandatory mixed-use proportions in all mixed-use districts. Multifamily projects in mixed-use districts must contain at least 35% non-residential uses, with ground-floor commercial required to meet commercial-ready construction standards, including a 14-foot minimum floor-to-ceiling height and direct pedestrian access to the public sidewalk.
• Open space requirements. A minimum of 20% of the gross area of the property must be provided as open space, of which at least 40% must be usable or improved open space.
• Private outdoor space requirements. Each residential unit must have a private outdoor space. Upper-story units must include a balcony, and ground-floor units must provide a minimum of 120 square feet of patio space directly accessible from the unit.
• Covered parking requirements. At least 50% of surface parking spaces must be covered, in addition to other structured parking siting and screening requirements.
• Mandatory on-site amenities and facilities. A project must include laundry connections within each unit, gym/fitness centre(s), club house, and business/remote work centre(s) plus two additional amenities approved by the city.
• Mandatory green building performance standards. All new and substantially rebuilt multifamily and mixed-use residential developments must comply with stringent green building requirements.
• Adequate public facilities requirements. Developers must complete extensive studies, analysis, and review processes to demonstrate that adequate infrastructure capacity exists. If capacity is insufficient, the developer must construct or fund infrastructure improvements or agree to phase development before the City will approve a plat or building permit.

Collectively, these standards impose additional costs on multifamily projects and limit the practical implementation of SB 840 within Irving.

Conclusion

Based on our experience navigating these regulations with clients to date, there are several cities in which SB 840 is likely to result in no multifamily housing starts. Given the clear intent of the legislature was to spur the construction of more affordable housing for Texans by adopting SB 840, it will be interesting to observe what types of future legislative responses or disputes may arise.