New Texas Laws Effective September 1, 2025 | LAA Update
September brought more than cooler weather to Texas—it brought dozens of new laws that directly affect how we do business in multifamily housing. Some of these changes open doors. Others create new compliance hoops. A few shift the ground rules entirely.
Here's what matters most for LAA members, from developers and owners to the service providers who keep our industry running. We'll cut through the legal language and focus on practical impacts—what changes, what stays the same, and what you need to do about it.
The Big Wins for Developers and Owners
SB 840: Zoning Just Got Easier
This one's a game-changer for multifamily development. SB 840 allows multifamily projects "by right" in most commercial and industrial zones in larger cities. Translation: less time in planning meetings, fewer bureaucratic roadblocks.
The law also limits cities from piling on extra parking requirements, height restrictions, or setback demands that weren't already on the books. For developers, this means faster approvals and lower soft costs. For existing properties, it opens up adaptive reuse opportunities that weren't feasible before.
Bottom line: Projects that used to take months of zoning fights can now move straight to construction. That's real money saved.
HB 21: Housing Finance Gets Tighter Rules
Housing Finance Corporations helped fund a lot of affordable housing projects across Texas. HB 21 tightens those rules significantly.
Starting now, HFCs can only operate within their home jurisdictions—no more cross-county financing deals. The law also mandates specific affordability percentages and requires rent pass-through provisions. Projects have until 2027 to get compliant.
What this means: If you've got projects relying on HFC financing, review those deals now. Some structures that worked last year won't work going forward. Budget time and money for restructuring.
SB 15: Smaller Lots, Higher Density
SB 15 allows smaller single-family lots in larger Texas cities. While this doesn't directly change multifamily rules, it affects market dynamics.
More single-family density means different neighborhood patterns and potentially different renter preferences. Keep an eye on how this plays out in your markets—it could shift demand for certain property types.
What Service Providers Need to Know
The legislature didn't forget about contractors, suppliers, and other service providers. Several new laws strengthen protections and clarify payment processes.
SB 841: Construction Trust Funds Get Clearer Rules
Construction trust fund disputes just got more predictable. SB 841 clarifies how trust fund rights work and how they can be assigned, which means better payment security for contractors, subcontractors, and suppliers.
The practical impact: When payment disputes arise, the legal process is clearer and faster. That's less time in court and more predictable cash flow.
HB 3005: No More Endless Payment Delays
Here's a big one for anyone working on public projects. HB 3005 caps payment delays at 60 days after substantial completion—even if audits are still ongoing.
Before this law, public entities could drag out payments indefinitely while they completed reviews. Now there's a hard deadline.
What it means: Better cash flow and more predictable project economics for public work. Plan accordingly.
HB 2960: Keep Disputes in Texas
Out-of-state venue clauses in construction contracts are now banned. If there's a dispute, it gets resolved in Texas courts under Texas law.
This matters more than you might think. Legal costs drop significantly when you don't have to travel to another state for depositions and hearings. Local attorneys understand local procedures. Cases move faster.
The upshot: Cheaper, more efficient legal processes when things go wrong.
SB 783: Energy Codes Are Coming
The state energy office now has authority to adopt updated building energy codes, with stakeholder input built into the process.
For trades and service providers, this means new compliance requirements are coming. But it also creates opportunities for energy-efficient upgrades and retrofits as property owners adapt to new standards.
Get ready: Start learning about energy-efficient systems and materials. This trend isn't slowing down.
HB 718: Student Housing Gets Stricter
Universities can no longer partner with developers who have unresolved liens or outstanding claims. This applies to all service providers working on university partnership projects.
What you need to do: Keep your financial and claims records clean. Unresolved disputes that didn't matter much before could now disqualify you from lucrative university projects.
What You Should Do Now
These laws aren't suggestions—they're the new operating environment. Here's how to adapt:
Review your contracts. Language that worked in August might not work now. Pay special attention to venue clauses, payment terms, and trust fund provisions.
Check your development plans. SB 840's zoning changes might accelerate projects you had on the back burner. HB 21's HFC restrictions might require restructuring deals you thought were locked in.
Talk to your advisors. Legal and financial professionals who understand these changes can save you time and money. Don't guess at compliance—get professional guidance.
Clean up your records. Service providers especially need to resolve any outstanding liens or claims. What used to be routine business disputes could now cost you major opportunities.
Where to Learn More
The Texas Legislature maintains a full list of new laws at [legislature.texas.gov]. For deeper analysis, the Houston Chronicle and San Antonio Express-News have covered the housing-related changes extensively.
Construction law firm Peckar & Abramson published a comprehensive update on the service provider changes, and Winstead's real estate team analyzed the zoning and development impacts.
These aren't the only laws that took effect September 1, but they're the ones that matter most for our industry. The key is understanding which changes affect your specific business and acting accordingly.
The rules changed overnight. Your strategy should too.