The Texas legislature’s new law seemed a pro-housing dream. Passed last year, it requires larger municipalities to allow mixed-use and multifamily development in zones that permit office, commercial, retail or warehouse uses.
Yet some developers say the law, Senate Bill 840, meant to emancipate builders from restrictions, can’t streamline pre-development negotiations with city officials — some of whom consider the law an encroachment on local authority.
“Just because something can be done legally doesn’t mean that things can’t be stalled in the background with all the bureaucracy,” Tanya Ragan, founder of adaptive reuse development company Wildcat Management, said.
It’s less “Catch-22” than Franz Kafka. Like everyman Josef K. — who tries to adhere to constantly changing law in Kafka’s “The Trial” only to find that dutifulness doesn’t work as well as flattery — some builders say that the theoretical opportunity of the new state law has boxed them into to a labyrinth of regulation that requires more persuasion and politicking to navigate than before.
That’s no accident. After SB 840 passed, some local governments were unhappy that more housing could pop up in arguably overcrowded areas, especially in North Texas. The city councils of Arlington, Plano, Irving and Frisco were among those that passed ordinances meant to counteract SB 840 before it took effect on Sept. 1, 2025. They instituted height mandates, required expensive amenities for new apartments or even rezoned commercial areas as heavy industrial in order to exploit an exception in the bill.
Though they complicate development, these ordinances are at least clear and legible.
Other negotiations that take place behind the scenes don’t necessarily follow strict written steps, since projects technically allowed by SB 840 face high scrutiny at the municipal level, and city officials can stall disfavored projects even without the conventional channels of approval, according to some developers.
Others say that negotiations with city officials, even Kafkaesque ones, are just part of the job and the new law hasn’t improved or worsened them.
The risk
The Texas legislature and local governments are in an ongoing battle for authority. In general, policies of stricter regulation or left-leaning ideas find more purchase in cities, counties and school districts, while the Republican-dominated legislature, which convenes every other year, generally prioritizes deregulation and lower taxes. The tug-of-war sometimes pulls the state into heated cultural issues, but more mundane issues such as property taxes, land use and labor codes make up most of the battleground. After affordable housing got the deregulation treatment at the state level last year, the local backlash took off.
SB 840 allows mixed-use and multifamily development as of right in commercial areas, aside from heavy industrial zones, airports and military bases. It also bars cities from regulating the design of mixed-use and multifamily developments more strictly than they would regulate offices, retail centers, warehouses or other commercial buildings. The law additionally forbids cities from imposing certain regulations on buildings converted to housing, which includes apartments and condominiums.
Despite the state’s sweeping invitation to build more units, cities still have the power to facilitate or discourage urban projects — and some cities aren’t eager to speed along an SB 840 development, according to developer Jackson Su.
Su co-founded Bridge Tower in 2013. Today, it’s the most prolific local built-to-rent developer in North Texas, according to commercial real estate firm Northmarq. Along the way, Su learned that developers who flout city officials’ wishes on one project, even if they don’t strictly need local approval, are asking for trouble on their next.
“Most developers probably won’t trigger SB 840 if they really are looking to have a long-term relationship with the city,” Su said.
The city councils that tried to curb SB 840 last year already had members with constituents who opposed denser development. But now that the issue is implicated in Texas’ ongoing feud between local governments and the state legislature, the infill apartment has become something of a political football.
This can deter developers from even trying.
“When we go into a city, we don’t want to be adversarial or make it into a contentious situation with the cities,” Su said. “And most cities can understand that.”
Asked whether some city officials slow SB 840 developments behind the scenes, Ragan of Wildcat Management replied, “a thousand percent.”
“At the end of the day, you’ve still got to navigate city council, city leadership, economic development,” Ragan said.
Wildcat has projects in the pipeline in the suburbs as well as in the city, with a mixed-use development planned for Mansfield among them. In Ragan’s opinion, “things that were easier to navigate in some of these other surrounding towns a few years ago, I feel like they’ve all gotten harder.”
In 2012, Wildcat Management acquired the historic Liberty Building, the oldest commercial building in downtown Dallas, and relocated it to the Farmers Market District using Tax Increment Finance funding from the City of Dallas in the process.
“We went to the city, we negotiated TIF, we moved a building. We did that in eight months, brick by brick. Today, with all the bureaucracy and the fighting and the politics — shit, we couldn’t get TIF in the city in eight months today,” Ragan said.
The opportunity
The politicking and glad-handing needed to get a project done isn’t necessarily nefarious. For David Eitches, co-founder of Dallas-based multifamily and mixed-use developer Alpine Start Development, cooperation with city government comes with the territory.
“I’m doing two deals in Dallas and one deal in Fort Worth right now, all of them with SB 840 executions, and the city’s been very cooperative on all of them,” Eitches said. “There’s been very little pushback, and we’ve been working hand in hand with them, and everything’s been excellent.”
Alpine Start isn’t pursuing an adaptive reuse housing development, but it is taking advantage of SB 840’s broader permissions for apartment design. One of the firm’s projects in Dallas used to be under a 36-foot height limitation, which kept it to three stories; now Alpine Start is planning a four-story building.
Eitches allowed that SB 840 developments require “more explaining” to city officials. However, the municipal process of an SB 840 development doesn’t vary much in speed from that of a conventional project, he said.
“You have to work hand in hand with them. You can’t go in and ask for the world. You have to be realistic with your approach,” Eitches said.
“So there’s pre-dev meetings and everything else similar to that deal that’s not an SB 840 deal. But I would say overall, in my experience, it’s not affecting our schedule one way or another.”
Developers who try to plow ahead with a project that would have needed more stringent approval before SB 840 might benefit from some tactfulness, according to Eitches.
“My guess would be — and this is just my guess — that some developers get very excited about SB 840 and try to push the envelope. And that’s why it’s affecting their schedule, or the yes or no,” Eitches said.