Single-Family Still Reigns as SB 840 Reshapes Development in North Texas

The Texas Legislature just passed one of the most sweeping land-use laws in recent memory—Senate Bill 840—and while it’s aimed squarely at multifamily and mixed-use development, the message for investors couldn’t be clearer: single-family remains king in North Texas.

With mounting political pressure to increase housing supply, SB 840 represents a major shift in how—and where—multifamily housing can be built across Texas’s largest cities. But for single-family investors, it also reinforces everything we've long believed: predictability, flexibility, and sustained renter demand make SFH one of the safest bets in today's evolving market.

Let’s break it down.

🏗️ What SB 840 Does

Effective September 1, 2025, SB 840 requires cities with more than 150,000 residents (like McKinney, Plano, Frisco, and most of DFW) to allow multifamily and mixed-use residential development by right in any commercially zoned area.

That includes:

• Office parks

• Strip malls

• Warehouse districts

• Any area zoned for retail or mixed-use

The law bypasses local zoning approval, community input, and Planning & Zoning Commission oversight. If a site is zoned commercial, developers can now build residential there without asking permission.

“SB 840 strips away a city’s ability to manage its own land use... it invites unmanaged density, reduced quality of life, and an erosion of our zoning and planning process.”
— George Fuller, Mayor of McKinney

🔍 What's in the Bill?

Here are the most investor-relevant provisions:

• Mandatory multifamily allowance in commercial zones—no rezoning or council approval required

• Cities cannot restrict density below 36 units per acre or their highest current residential density (whichever is greater)

• Cities cannot limit building height below 45 feet or the tallest permitted commercial height

• Parking requirements capped at 1 space per unit

• Conversions of old office/retail/warehouse buildings to residential are exempt from:

  • Traffic impact studies

  • Impact fees (unless already imposed)

  • Additional parking requirements

  • Design restrictions beyond the basic International Building Code

🛠️ Who It Helps—And Who It Hurts

This bill is a clear win for large-scale developers and institutional multifamily investors. It dramatically cuts down entitlement timelines and removes the political risk of city opposition.

But the bill also strips cities of their ability to regulate growth, plan infrastructure, or even collect added fees to deal with new density. It’s no surprise that many city leaders across North Texas have expressed frustration and concern over how this will affect traffic, emergency services, schools, and quality of life.

It also creates uncertainty. When zoning and land-use controls are pulled from local governments, long-term planning gets harder—for everyone.

🏡 Why Single-Family Still Wins

While SB 840 may dominate headlines, it’s focused entirely on multifamily and mixed-use development. It doesn’t affect single-family rental properties, subdivisions, or new detached home construction.

And that’s why this moment highlights what we’ve always told our investors:

✅ Single-family homes offer stability.

You know what’s allowed, what’s coming, and what kind of tenant you’re likely to attract.

✅ Single-family is resilient to policy swings.

You’re not relying on political decisions to unlock your investment potential.

✅ Single-family matches long-term renter demand.

Texas families want space, yards, good schools, and suburban neighborhoods. That’s not changing.

📌 What Happens Next?

We’ll be following SB 840 closely as it moves toward implementation on September 1, 2025. Cities may push back, legal challenges could surface, and further legislation is likely in upcoming sessions. For now, though, this law is in place—and the implications for zoning and multifamily investment are significant.

As we continue to monitor the impact on real estate markets across North Texas, one thing is clear: investors who stay informed and focused on quality single-family assets are best positioned to win in this environment.

💡 Have questions about how SB 840 could impact your investment strategy? Contact our team or sign up for one of our upcoming webinars, where we’ll break this down in even more detail.

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