Austin, October 1, 2025
News Summary
Texas has enacted Senate Bill 840, aimed at easing the housing affordability crisis by allowing the conversion of underutilized commercial properties into residential developments. This legislation, initiated by Senator Bryan Hughes, seeks to bypass traditional zoning changes, facilitating quicker development in cities with populations over 150,000, including Austin. The bill is expected to add thousands of residential units and reduce regulatory hurdles for developers, though it also raises concerns about local impacts and competition.
AUSTIN, Texas — Texas lawmakers have passed Senate Bill 840 (SB 840) to address the housing affordability crisis impacting the state. Introduced by Republican state Senator Bryan Hughes and signed into law by Governor Greg Abbott in June 2025, this legislation aims to facilitate the conversion of underutilized commercial buildings into mixed-use and multifamily residential developments.
Under the provisions of SB 840, land currently classified for office, commercial, retail, warehouse, or existing mixed uses may be repurposed into residential housing without the need for a zoning change. This legislative move is designed to help alleviate Texas’s persistent housing shortage by streamlining the process and enabling developers to repurpose land “by right,” thus avoiding lengthy zoning approvals.
Importantly, SB 840 specifically applies to cities that have populations exceeding 150,000 located within counties that have populations over 300,000. This affects fewer than 20 cities in total, notably including Austin.
In Austin, the potential impacts of SB 840 are significant. Developers are anticipating the addition of nearly 900 residential units at the property located at 200 East Riverside Drive and up to 2,400 units at Anderson Square. The bill also places restrictions on municipal regulations concerning density, building height, and parking for new multifamily and mixed-use developments.
Municipalities will not be able to require more than one parking space per dwelling unit, nor can they mandate a multilevel parking structure. Furthermore, density for multifamily developments must adhere to the greater of either the municipality’s maximum allowable density or 36 units per acre. Height restrictions will also conform to the larger of the municipality’s zoning code or the stipulated height of 45 feet.
Set to take effect on September 1, 2025, SB 840 is viewed as a means to reduce time-consuming zoning deliberations, allowing developers to move forward with projects more efficiently. It is anticipated that the legislation will create substantial opportunities for developers while also increasing the availability of affordable housing across Texas.
The introduction of this bill is a part of a larger legislative strategy aimed at improving housing supply and affordability as home prices continue to surge. Experts predict that the reduction of red tape associated with land development could prompt a rapid increase in multifamily housing initiatives, catering to rising housing demands.
Despite the optimistic outlook surrounding SB 840, concerns have been raised about potential adverse effects such as increased competition with existing multifamily properties, possible devaluation of neighboring areas, and impacts on local infrastructure, including schools and traffic management. The overall implementation and success of SB 840 will significantly rely on how municipalities choose to adapt and enforce the new regulations.
FAQ
What is Texas Senate Bill 840 (SB 840)?
Texas lawmakers passed Senate Bill 840 (SB 840) to address the housing affordability crisis.
Who introduced SB 840?
SB 840 was introduced by Republican state Senator Bryan Hughes and signed into law by Governor Greg Abbott in June 2025.
What does SB 840 aim to do?
The bill streamlines the process for converting non-residential commercial buildings into mixed-use and multifamily residential developments.
What types of land can be repurposed under SB 840?
Under SB 840, land classified for office, commercial, retail, warehouse, or existing mixed uses can be repurposed for residential housing without needing a zoning change.
Which cities are affected by SB 840?
SB 840 applies to cities with populations over 150,000 that are located in counties with populations exceeding 300,000, affecting less than 20 cities including Austin.
What are the potential impacts of SB 840 in Austin?
Potential impacts in Austin include the addition of nearly 900 residential units at 200 East Riverside Drive and up to 2,400 at Anderson Square.
What restrictions does SB 840 impose on municipalities?
The bill also imposes limits on municipal regulations regarding density, building height, and parking for multifamily and mixed-use developments.
When will SB 840 take effect?
The legislation is expected to take effect on September 1, 2025.
What are the general concerns associated with SB 840?
Concerns have been raised regarding potential negative impacts, such as increased competition for existing multifamily properties, potential devaluation, and effects on local infrastructure like schools and traffic.
Key Features of SB 840
| Feature | Description |
|---|---|
| Introduced By | Republican state Senator Bryan Hughes |
| Signed By | Governor Greg Abbott |
| Effective Date | September 1, 2025 |
| Focus Area | Conversion of non-residential buildings into multifamily housing |
| Applicable Cities | Cities with populations over 150,000 in counties with populations over 300,000 |
| Potential New Units in Austin | Up to 3,300 units combined at two properties |
| Parking Limit | No more than one parking space per dwelling unit |
| Density Requirements | Either municipality’s maximum density or 36 units per acre |
| Height Limits | Greater of municipality’s zoning code or 45 feet |
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Additional Resources
- CoStar
- Wikipedia: Housing Affordability
- Colliers
- Google Search: SB 840
- Multi-Housing News
- Google Scholar: SB 840
- CBRE
- Encyclopedia Britannica: Texas Housing Market
- MultiFamily Dive
- Google News: Texas Senate Bill 840
Author: STAFF HERE AUSTIN WRITER
The AUSTIN STAFF WRITER represents the experienced team at HEREAustinTX.com, your go-to source for actionable local news and information in Austin, Travis County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as SXSW, Austin City Limits Music Festival, Formula 1 United States Grand Prix, and the Austin Film Festival. Our coverage extends to key organizations like the Greater Austin Chamber of Commerce and Visit Austin, plus leading businesses in technology, automotive, and retail that power the local economy such as Dell Technologies, Tesla, and Apple. As part of the broader HERE network, including HERECollegeStation.com, HEREDallas.com, HEREHouston.com, and HERESanAntonio.com, we provide comprehensive, credible insights into Texas's dynamic landscape.
