Texas Lawmakers Want to Override Local Zoning for Conversions

State lawmakers could boost residential conversions in Texas’ most populated areas.

The Texas Legislature is considering a move to streamline conversion of vacant office buildings and commercial spaces into residential units.

The proposal by Sen. Bryan Hughes would remove rezoning requirements for residential conversions in major cities and counties across the state, the Texas Tribune reported.

The legislation would apply to municipalities within the 13 Texas counties that have populations exceeding 420,000, along with cities within those counties that have over 60,000 residents.

Many Texas cities already permit downtown office buildings to be converted into housing, but the proposal would extend the option to properties outside of downtowns, including shopping centers and warehouses. The proposal is part of broader legislative efforts to address Texas’ housing shortage, which has driven up home prices and rental costs.

More than half of Texas renters are considered cost-burdened, spending over 30 percent of their income on housing, according to an analysis by the Joint Center for Housing Studies at Harvard University.

Rental costs vary across the state, but in Dallas, the average rent is $2,000 per month, according to Zillow. Statewide, the average is $1,870 per month. Home prices have outpaced wage growth, making the issue more pressing to lawmakers. The average Texas home price in February was $298,511, per Zillow.

Lawmakers are reviewing multiple proposals to ease zoning restrictions and encourage more residential construction.

Some local officials have concerns about statewide mandates overriding municipal zoning authority. Georgetown Mayor Josh Schroeder argued that land use decisions should remain local, allowing tailored approaches that directly reflect the needs of communities.

Office vacancies remain a concern in Texas’ metropolitan regions, even as employees return to in-person work at higher rates than in other major U.S. cities. The Dallas-Fort Worth metro trailed behind New York and Chicago with 52.8 million square feet of unused space during the second quarter. That translates to a potential rent loss for landlords of $1.62 billion.

Some housing advocates and developers see office-to-residential conversions as a way to mitigate the housing crisis and financial strain on struggling office properties. But that is often easier said than done, since many office buildings aren’t suitable for conversion because of large floorplates and lacking windows.

Residential conversions have yielded only 28,000 housing units nationwide since 2016, including about 2,400 in Texas, with another 2,800 in the development pipeline.

— Andrew Terrell