Austin Sued by Property Owners Over ETJ Status

The city of Austin is being sued on allegations that it did an about-face on the extraterritorial jurisdiction status of 170 Travis County properties.

The complaint, filed with the U.S. Western District Court of Texas, asserts that the city sent notice to the owners of 170 properties that wanted to be released from Austin’s ETJ that they were set free. In March 2026, Austin issued a reversal on the issue in letters sent to the owners, saying that the releases were voided by an exception in a state-level law, according to the Austin Business Journal.

The plaintiffs in the lawsuit filed June 5 are a nonprofit formed specifically to fight Austin’s flip-flop and get the 170 properties released from the ETJ. According to the outlet, Alexa Gervasi, a Cobb & Gervasi partner who represents the plaintiffs, said not all of the 170 properties are active participants, but will have the option to join.

The plaintiffs contend that once the city issued notice that they would be released from the ETJ, they don’t have the authority to walk it back. The owners, who call themselves the Property Owners Withstanding ETJ Retractions, were joined by the Schoenstatt Movement of Austin, a nonprofit for Catholic locals, who want to expand their facilities to meet community demand, according to the outlet.

Senate Bill 2038 regulates ETJ releases, which developers use to set their land in more financially agreeable settings with counties, as opposed to cities. The exception that Austin found after it sent the original release letters is tied to the Bee Caves Armory, a Texas Army National Guard facility in Austin suburb Bee Cave.

The exception to Senate Bill 2038 says that property within five miles of a functioning, federally funded or operated military base cannot be released from an ETJ. The plaintiffs also argue that since the base is on federal land but is leased to the state of Texas, the government doesn’t have full authority over the operations in regards to closing the facility, nullifying the exception.

The city has not yet formally responded to the allegations.

— Hunter Cooke