The 2025 Texas Legislative Regular Session has wrapped up, introducing new laws that will directly affect real estate investors and developers starting September 1, 2025. Winstead continued its long-standing commitment to advocating for policies that facilitate growth and development throughout the session.
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Senate Bill 840
Senate Bill 840 overrides municipal zoning regulations in order to facilitate multifamily and mixed-use development, including condominium developments, in cities with a population of at least 150,000 in certain counties.
Where the population requirements are met, a municipality must allow mixed-use and multifamily development on land with zoning that allows office, commercial, retail, warehouse, or mixed-use use. It also reduces density, height, parking, setback, and floor area requirements and limitations. development regulations. Municipalities must administratively approve qualifying developments.
It also facilitates the conversion of office, retail, or warehouse buildings for multifamily or mixed-use developments. The bill also limits or eliminates certain Traffic Impact Analysis (“TIA”), mitigation, design standards, and impact fee requirements.
What you need to know: Where applicable, SB 840 will facilitate new multifamily and mixed-use development by limiting municipal zoning regulatory barriers.
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Senate Bill 17
Senate Bill 17 regulates the purchase or acquisition of real property by certain foreign individuals or entities, primarily motivated by national security concerns. The bill restricts foreign entities from acquiring real property in Texas, including agricultural land and other types deemed significant for national security. DPS, in consultation with the Homeland Security Council, can designate countries or entities as posing a risk, thereby affecting their ability to purchase property. Violations may result in substantial civil penalties, and the Attorney General may enforce SB 17.
What you need to know: Developers should be aware of restrictions on foreign property acquisition, which could impact partnerships or investments. Compliance is crucial to avoid substantial penalties. Developers with foreign entity affiliates or investors should ensure compliance and prepare for potential investigations. SB 17 requires vigilance about foreign involvement in real estate transactions. It remains to be seen how this will be handled with title companies during the acquisition and disposition of property.
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House Bill 24
House Bill 24 outlines procedures for changes to zoning regulations or district boundaries within municipalities. Key provisions include increasing the threshold for protests of owners of land in the area immediately adjoining the area covered by the proposed change from 20 percent to 60 percent, and if such threshold is met, the change must receive approval of a majority of the governing body instead of three-fourths of the members of the governing body to be effective. In summary, this bill increases the threshold required for a successful protest of certain zoning changes. Additionally, changes that allow more residential development are presumed valid unless challenged within 60 days, and new public notice requirements apply.
What you need to know: Developers should be aware of new public notice requirements. The bill should also facilitate residential development by reducing the ability to trigger a supermajority vote by a city council to approve certain zoning changes.
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House Bill 2559
House Bill 2559 addresses the use and extension of moratoriums on certain properties by municipalities. The bill specifies that a moratorium on property development adopted by a municipality expires 90 days after its adoption unless extended, ensuring that moratoriums are temporary and subject to review. To extend a moratorium, the municipality must hold a public hearing and adopt written findings to provide justification for any extension, describe progress made to address the cited issue, and specify the duration of the extension. This process is intended to ensure transparency and accountability. Additionally, the bill aims to restrict municipalities from adopting a new moratorium addressing the same issue, affecting the same type of property, or covering the same area within two years of the expiration of a previous moratorium, thereby aiming to prevent a city from utilizing moratoria as a way to block development. The bill also intends to repeal specific sections of the Local Government Code related to moratoria and streamline the legal framework governing their use.
What you need to know: Developers should plan projects with the understanding that moratoria may no longer be as indefinite as previously experienced.
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Senate Bill 15
Senate Bill 15 relates to size and density requirements for single-family residential lots in municipalities with a population over 150,000 within counties with populations over 300,000. These municipalities would be prohibited from enforcing ordinances that require residential lots to be larger than 3,000 square feet, wider than 30 feet, or deeper than 75 feet. Density regulations cannot prevent single-family homes on lots of at least 3,000 square feet. Municipalities cannot impose certain restrictions on small lots, such as excessive setbacks, parking requirements, open space, or building height limits. Exceptions are allowed for environmental setbacks and aquifer protection. This bill aims to inhibit overly-burdensome municipal regulations that hinder residential development.
What you need to know: The bill is intended to facilitate residential development by limiting a municipality’s ability to enforce regulations regarding minimum lot sizes, density, setbacks, parking, and other development requirements. Developers should be aware of exemptions for strategic locations.
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Senate Bill 1566
Senate Bill 1566 clarifies that a city may provide utilities to property if the land is subject to the city’s Certificate of Convenience and Necessity (“CCN”) (within its service area), even if the land was removed from the city’s extraterritorial jurisdiction (“ETJ”)., subject to certain conditions.
What you need to know: After the enactment of the ETJ release process by Senate Bill 2038, which was passed in the 2023 legislative session, certain cities refused to provide released properties with utility service, even though the properties remained within the city’s CCN, citing lack of a plat certificate under Section 212.0115 of the Local Government Code. SB 1566 aims to clarify that a city may provide utility services to lands that have been removed from its ETJ, regardless of whether such a plat certificate exists.
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Senate Bill 1883
Senate Bill 1883 introduces substantial modifications to the procedures that local governments must follow when contemplating the adoption or increase of impact fees. Key aspects of the bill include: (i) extended periods for citizens to examine the capital improvements plan, (ii) multiple voting sessions by the council with a higher adoption threshold requiring a two-thirds majority of the governing body, (iii) mandatory audits of the impact fee program, and (iv) a restriction preventing local governments from increasing fees more frequently than once every three years.
What you need to know: SB 1883 aims to enhance transparency and accountability in the process of adopting and increasing impact fees, ensuring public access to relevant information, and requiring thorough financial audits to justify fees.
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House Bill 2512
House Bill 2512 amends certain provisions of the Local Government Code governing the release of properties from the ETJ of municipalities. It expands the list of property types previously exempted from ETJ release by Senate Bill 2038. With the passage of House Bill 2512, properties in the ETJ of Fort Worth are no longer subject to the ETJ release provisions of the Local Government Code if they are subject to a Chapter 212 development agreement, contain fewer than 12 acres, or consist of a single lot in a platted subdivision of 25 or more lots. The bill also attempts to cure deficiencies in SB 2038 cities that previously used to avoid ETJ releases. For example, it provides notice to landowners whose property has been included in a petition to a municipality to hold an election on whether to release lands from the ETJ and gives that landowner an opportunity to opt out of the removal. It also specifically exempts the ETJ release process from the requirement that a city consent in writing to the reduction of its ETJ.
What you need to know: Developers should assess whether their projects fall within any existing and expanded exemptions when considering an ETJ release. If the concerned properties do not fall under any exemptions, developers should continue to weigh the potential implications of developing properties under county versus municipal oversight, including future impacts of Senate Bill 1566, described above.
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Senate Bill 1844
Senate Bill 1844 updates the qualifications for those signing a petition for disannexation of property from a municipality for the municipality’s failure to provide services to that property. The bill changes the qualification of such petitioners from a majority of the qualified voters of the area to a majority of the property owners of the area, allowing a landowner to seek disannexation of its lands even if it is a person not residing within those lands or a business entity. It also updates the petition signature requirements accordingly. Senate Bill 1844 also allows for the disannexation of a new category of lands, being lands adjacent to a navigable waterway that are not connected to a city’s sewer and water systems, when any other areas in the city are connected to the city’s sewer and water systems.
What you need to know: If a landowner feels a city is not providing services under an established service plan, written annexation agreement, or annexation resolution, but previously could not avail itself of the disannexaiton ordinances due to not being a registered voter within the property, the landowner should now be aware that options for disannexation may exist. Further, in the limited case a landowner owns property adjacent to a navigable waterway and the new provisions regarding municipal water and sewer connections apply, the landowner should be aware it may now be eligible for disannexation.
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Senate Bill 2477
Senate Bill 2477 addresses zoning and land use regulations, specifically focusing on amendments, exceptions, or variances that allow for the conversion of buildings to mixed-use residential or multifamily residential use. The bill outlines conditions under which these conversions can occur, including limits on impervious cover and site coverage, and additional drainage or water quality requirements. It also prohibits the imposition of impact fees related to these conversions. The bill introduces amendments to zoning districts or land use classifications, allowing for special exceptions, zoning variances, site development variances, subdivision variances, conditional use approvals, special use permits, comprehensive plan amendments, or other discretionary approvals for building conversions. It specifies that no additional impact fees can be imposed for these conversions, ensuring developers are not burdened with extra costs.
What you need to know: Developers who plan to convert buildings to mixed-use or multifamily residential use should be aware of the possible new provisions under SB 2477. The bill aims to facilitate such conversions by allowing various zoning and land use amendments and prohibits additional impact fees, potentially reducing costs associated with development.
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Senate Bill 783
Senate Bill 783 amends regulations concerning the construction or alteration of residential and commercial buildings. It specifies exemptions to certain governmental regulations, particularly focusing on historical, cultural, or architectural significance. The bill outlines conditions under which buildings are exempt from specific regulatory requirements, including those related to energy and water conservation, plumbing standards, and outdoor lighting aimed at reducing light pollution. SB 783 amends Section 3000.002(c) of the Government Code, detailing exemptions for buildings located in historically significant areas, designated landmarks, and areas under specific conservation programs. It also addresses standards for plumbing products and energy codes, allowing for exemptions in cases where buildings meet certain historical or conservation criteria. Additionally, it establishes procedures for public comment on energy code amendments.
What you need to know: Developers who may be involved in projects within historically significant areas should be aware of the exemptions provided under SB 783. The bill facilitates construction and alteration by exempting certain buildings from stringent regulatory requirements, potentially reducing compliance costs.
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Senate Bill 785
Senate Bill 785 regulates the installation of new HUD-code manufactured housing. It mandates that municipalities must permit the installation of these homes in areas deemed appropriate, such as subdivisions, planned unit developments, single lots, rental communities, or parks.
The bill specifies that applications for installation are automatically granted unless denied in writing within 45 days, with reasons for denial provided. It also restricts municipalities from requiring specific use permits for these homes if they comply with federal law and are treated similarly to other residential properties in the same zoning classification. The bill amends Section 1201.008 of the Occupations Code, adding provisions that prevent municipalities from imposing additional permits or fees for the transportation and installation of manufactured homes, except for actual costs incurred. It also clarifies that municipalities retain the authority to enforce ordinances protecting historic landmarks and deed restrictions established before January 2, 2025. The bill does not apply to municipalities where all residential areas have deed restrictions prohibiting manufactured homes or lack business or industrial zoning.
What you need to know: Developers planning to install HUD-code manufactured homes should be aware of the streamlined application process under SB 785. The bill facilitates installation by limiting municipal requirements for additional permits, potentially reducing regulatory hurdles. Developers should ensure compliance with federal construction standards and assess local zoning classifications to determine if specific use permits are required. Additionally, they should be mindful of historic preservation ordinances and existing deed restrictions that may impact installation.
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House Bill 21
House Bill 21 pertains to housing finance corporations (“HFCs”), entities created by cities and/or counties intended to increase access to affordable housing. HFCs are exempt from taxation and can issue bonds to promote their purposes. The bill is intended to address HFCs acquiring properties and seeking tax exemption outside their creating entities. It also aims to increase the monitoring and transparency of these entities by subjecting them to the Texas Open Meetings Act and requiring annual auditing of their activities. The bill further establishes strict thresholds for housing affordability, specifies the minimum volume of HFC housing that must be reserved for lower-income users, and provides standards for units that are income-restricted.
What you need to know: In order to retain their tax exemption, property owners availing themselves of the advantages afforded to HFCs should be aware of the heightened requirements enacted by House Bill 21. Further, for those not currently in compliance with the updated statute, users of HFCs should be aware of the strict timeframes imposed for compliance or risk losing their tax exemption.
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House Bill 2468
House Bill 2468 restricts the time for a potential purchaser of lands to terminate its purchase contract if the purchaser did not receive proper notice that the subject property was in a public improvements district (“PID”). Previously, the law provided that a purchaser could rescind its purchase contract prior to closing if the purchaser had not received the statutory notice. This left ambiguity as to whether a purchaser could rescind its contract after the seller attempted to cure the notice defect by providing the statutory notice between the time of contract and closing. The new law clarifies that if the purchaser is not provided proper notice at the time of contract, it has only seven days from the time it receives the notice to terminate the contract.
What you need to know: Sellers of land should continue to be aware of the consequences of not providing proper statutory notice to purchasers at time of contract and closing. Purchasers of land should be aware that if they did not receive a proper notice at time of contract, once they receive the notice, they have only seven days to utilize the statute to rescind the contract.
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Senate Bill 1106
Senate Bill 1106 continues the legislature’s trend of increasing transparency requirements and ease of access to public information. This bill requires any city approving, updating, or amending a PID service and assessment plan—the document that establishes PID assessments over landowners’ property—to post such plan on its website within seven days. During those seven days, the city must also provide the plan to the central appraisal district, which must include the plan in its required property tax database.
What you need to know: While not directly affecting developers of property, landowners should be aware of this change in law and their ability to access the applicable public information. Developers utilizing a PID should work with the city or county creating the PID to ensure compliance with this bill.
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Senate Bill 1921
Senate Bill 1921 amends provisions related to “tourism PIDs”, or PIDs including hotel lands that are intended to increase hotel and tourism activities in the area. A petition to create such a PID may now be signed by an authorized hotel manager, rather than only the underlying property owner, and will be proper if signed by petitioners who represent a threshold of owners of hotels subject to assessment, rather than a threshold of owners of underlying real property. The bill removes the restrictions that tourism PIDs may only be created in certain cities and may be used only for special supplemental services.
What you need to know: Hotel owners or developers should be aware that the change in petition requirements may allow them to petition for the formation of a tourism PID without the signature of the owner of real property underlying the hotel. Additionally, they should be aware that the removal of certain restrictions placed on tourism PIDs may result in new incentive tools for the development and improvement of hotel properties.
