Analyzing SB 840's massive impact on housing & development
By Cedar • May 29th, 2025
Texas
Housing policy
Austin
Mixed-use
Greetings from Cedar!Texas just passed another groundbreaking new housing reform.SB 840 was signed into law earlier this week to make it dramatically easier to build mixed-use housing statewide by allowing for by-right residential and mixed-use development on commercially-zoned land. It also overrides local rules that limit density, parking, setbacks, height, and FAR.We expect this to have a massive impact on infill development here in Austin, especially along key corridors and in emerging mixed-use neighborhoods.
SB 840 overrides local zoning
in eligible districts by setting State minimum development standards, meaning cities cannot enforce:
in eligible districts by setting State minimum development standards, meaning cities cannot enforce:
• Density limits below 36 dwelling units per acre• More than 1 parking space per unit (Austin has already eliminated parking minimums)• Setbacks greater than 25-ft• Height limits below 45-ft• Impose any floor-area-ratio (FAR) restrictions
Relevant Austin zoning districts include CS, GR, LR, GO, LO, among others (keep scrolling to learn more).
Cedar estimates that SB 840 could unlock at least 28,000+ homes in Austin (conservatively) through new residential density in core commercial areas and relaxed minimum site area requirements on existing mixed-use sites.
Case Study #1 - Residential in commercial zoning
1212 Slaughter Ln, Austin, TX
1212 Slaughter Ln, Austin, TX
Less than a block from an elementary school, with a park in-between, already situated within a residential neighborhood... this 1-acre site should be residential. But its commercial zoning today prohibits this use, and thus the land sits underutilized.SB 840 allows us to build residential and multifamily housing here, up to 40 new homes by-right (without a zoning change).
BeforeSuburban office and surface parking
AfterSingle-family / multifamily residential mix
Case Study #2 - Unlocking latent housing potential
2218 Pershing Dr, Austin, TX
2218 Pershing Dr, Austin, TX
This 2-acre site sits in a growing neighborhood along major urban roadways, and is already zoned for mixed-use. But current minimum site area requirements make it impossible to build family-sized units to its by-right density. Under SB 840, those restrictions no longer apply, allowing us to roughly double the housing density.
Quantifying the impact across Austin
We've identified 5,000+ sites in Austin where SB 840 makes new housing possible
We've identified 5,000+ sites in Austin where SB 840 makes new housing possible
More pro-housing wins from this legislative session...
We'll keep you updated as these become law and are implemented statewide
We'll keep you updated as these become law and are implemented statewide
🚪 SB 2835 – Legalizing Single-Stair Apartment Buildings
• Legalizes single-stair (exit) multifamily buildings up to six stories across Texas (exceeding Austin's recently passed 5-story limit).• Unlocks a broader range of "missing middle" housing types, including walk-ups and courtyard apartments.
🏘️ SB 15 – Smaller Homes on Smaller Lots
• Reduces minimum lot sizes and setbacks in large cities, enabling construction of smaller, more affordable single-family homes.• Limits local requirements on lot width, depth, setbacks, open space, and parking.• Intended to boost starter home supply and lower entry-level housing costs.
🛑 SB 844 – Limiting Zoning Protest Thresholds (in-progress)
• Raises the threshold for neighbor protests to trigger a supermajority vote on rezoning from 20% to 60% of adjacent property owners.• Aims to reduce the influence of small groups in blocking new housing developments.
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