There are two primary sources for planning and zoning laws in Texas. One overarching source is the Texas Local Government Code. Each municipality also has zoning and subdivision regulations. Chapter 211 of the Texas Local Government Code enables cities to adopt zoning regulations, and Chapter 212 governs the laws around platting and subdivision.

Planning and zoning authority is largely administered by local government entities. As such, it is generally an exercise of police power subject to federal and constitutional regulation.

Each municipality has its own zoning and planning regulations that are adopted pursuant to governing state statutes. So, a local analysis of laws is required to fully understand the zoning controls and process in each municipality.

Municipalities exercise broad land-use authority under state enabling statutes, including the power to adopt zoning ordinances, comprehensive plans, subdivision regulations, and building and development standards. Counties have some limited authority, particularly in unincorporated areas.

At the municipal level, several bodies play key roles:

• city councils adopt zoning regulations and make final decisions on most zoning cases;
• planning and zoning commissions (or planning commissions) review zoning changes, plats, and development applications and make recommendations to the city council;
• boards of adjustment hear administrative appeals and decide requests for variances and special exceptions;
• city staff, including planning, development services, engineering, building inspection and legal departments, administer, interpret and enforce land-use regulations; and
• city attorneys advise on legal interpretation, compliance and enforcement.

Land use is an area of law where decisions often carry personal, neighbourhood-level and political implications. Because planning and zoning actions can affect surrounding property owners, businesses and community institutions, a number of informal or “voluntary” groups play meaningful roles in the approval process.

At the hyper-local level, property owners’ associations, homeowners’ associations, neighbourhood groups and community organisations frequently review and provide formal and informal comment on zoning cases, development proposals and land-use changes. Their input is often given substantial weight in discretionary approvals (eg, zoning changes) by elected and appointed officials, who understand the political and community sensitivities that accompany land-use decisions.

In addition, many of the individuals involved in the process – such as members of planning commissions, boards of adjustment and citizen advisory committees – serve in voluntary or uncompensated roles. These civic participants provide essential local insight and help shape the land-use review process. Their engagement contributes to the unique, and sometimes highly personal, nature of land-use decision-making, and can significantly influence real estate development outcomes.

Many aspects of use and development are regulated, as are areas related to the development of real estate. The horizontal infrastructure (eg, water, sewer, grading, and utilities) is regulated through the platting process. As the project goes vertical, zoning regulations that dictate use, development standards (such as setbacks, height, lot coverage and lot size), and design standards are enforced. Additionally, there are a host of building codes that dictate the design and construction of a project.

In the past 12 months, Texas has seen its most significant development activity and planning trends centred on data centres, large-scale mixed-use projects, and housing. The rapid expansion of data centre development often prompts strong local responses, particularly regarding potential impacts upon public infrastructure. Similarly, housing – whether mixed-use condominiums, multi-family complexes, or single-family homes – remains a major focus across the state, driven by continued population growth. In turn, municipalities are refining their regulatory frameworks, with local requirements becoming increasingly comprehensive.

Inflation and increases in interest rates have made capitalisation extraordinarily difficult. Developers and project managers are willing to spend capital through the planning process because long-term faith in the Texas market remains strong, but construction timelines are extended by market forces in many instances. Additionally, the extreme demand for data centres is having a meaningful impact on labour and supplies.

Real estate developers, investors and lenders have responded to recent market conditions, return-to-office trends, and political and regulatory shifts with a range of adaptive strategies.

On the capital side, creative equity structures have become increasingly common. Developers are using cross-equity arrangements, forming broader co-GP partnerships, and turning to non-traditional equity sources to fill gaps created by tighter underwriting and reduced bank appetite for new projects. At the same time, private debt funds and alternative lenders have gained market share as traditional banks remain cautious in the current interest rate and liquidity environment.

Return-to-office initiatives have influenced development patterns, though not enough to fully revive traditional office demand. While office attendance is trending upward, new office development remains limited, and projects that move forward tend to emphasise high-amenity environments, sustainability, wellness design and mixed-use integration to attract tenants and employees.

There are currently no sweeping federal policy changes that are directly reshaping real estate development in the United States in the way that state and local laws often do. However, several emerging federal priorities have the potential to significantly influence development in the near term.

One of the most notable areas is the federal government’s increasing focus on data centre regulation. As data centres continue to cluster in specific regions like Texas, the federal government has begun assessing the national security implications of concentrated digital infrastructure, including energy demand, grid vulnerability, and strategic competition with nations such as China. This growing scrutiny signals the possibility of future federal standards related to siting, energy usage, cybersecurity and possible incentives for geographic diversification.

At the state level, there were a series of bills adopted in the last legislative session directed at diminishing the political impediments to housing development, particularly multi-family housing. Senate Bill 840, which is now codified in Chapter 218 of the Texas Local Government Code, requires cities with populations over 150,000 to allow multi-family development by right on sites that are commercially zoned, in addition to providing minimum development standards that encourage more housing. Also, the rules around notification, advertisement and objections to zoning requests that include multi-family development were impacted to the benefit of developers. The impacts of those changes are yet to be seen. Many cities have responded with new ordinances that undermine Senate Bill 840 and its intent, which will likely result in litigation and additional reforms at the state level during the next legislative session.

An additional planning and zoning reform affecting real estate development is the Texas constitutional amendment that was recently passed for water infrastructure investments. The Texas Water Development Board plans to provide these investments with USD20 billion in funding over the next ten years.

Broader political issues do not impact real estate development or planning and zoning to the same extent as local policies. Planning and zoning are the most acutely local political exercises in real estate development. Planning and zoning approvals are more affected by homeowners and property owners within a half mile of a development site than they are by national policies.

Approvals that may be required for a real estate development project are zoning changes, building permits, platting and site plans.

The types of planning and zoning approvals are generally grouped into two categories: discretionary and non-discretionary (ministerial).

The primary discretionary approval is a rezoning that may be necessary for a project, which is a legislative act of the city council, subject to broad discretion. Approval of a specific use permit (or conditional use permit) is also a discretionary approval.

Other types of approvals include building permits, platting and site plans. Plats and site plans may be approved in public meetings but are ministerial and cannot be legally denied if they meet the technical requirements of the applicable city.

Changes in ownership do not require a separate or new zoning approval, because in Texas entitlements are attached to the land, not the ownership.

The governmental taking of land, condemnation, expropriation or compulsory purchase is possible if required for a development project. The general rule is that condemnation can be exercised so long as it is for a public purpose, such as the delivery of public infrastructure to a site (eg, water, sewer and roadway access). The process is dictated by Chapter 21 of the Texas Property Code and aligns with the law around the country.

In Texas, external-impact requirements are generally lighter than on the East or West Coasts. Local governments typically rely on focused technical studies – such as traffic-impact analyses, water and sewer capacity reports, and related infrastructure assessments – rather than broad community-impact or environmental reviews. Texas law has a well-established framework governing what improvements a developer can be required to build: any required public-infrastructure improvements must be roughly proportional to the impact of the development.

The primary regulatory vehicle used for large-scale or multi-phase projects is what is generally referred to as a planned development district or planned unit development, which is the type of specifically tailored rezoning that creates variances to standard city regulations and processes as necessary to accommodate more complicated projects. Those are typically addressed on a site-by-site basis through the statutorily prescribed zoning process.

Generally, except in the case of incentives, regulatory authorities are not supposed to consider financing aspects in making a zoning decision. A regulatory authority will say that the financing of a project is not a valid consideration for land-use approvals. The obvious exception is when a project requests tax incentives to help fund construction, and in those scenarios, it is common for the regulatory agency to conduct an examination of the project’s pro forma and financial forecast.

Particularly when going through the land use approval process, it is common to see requirements imposed as a condition to an approval related to improvement of the public realm, including:

• connectivity;
• walkability;
• screening; and
• landscaping, particularly in cases that involve sensitive residential adjacencies.

Other common requirements that may be imposed as a condition to a land use approval include:

• necessary infrastructure for the project (generally as conditions to plat approval); and
• sustainable or mixed-income housing requirements.

There are circumstances under which monetary, land or facility contributions are permissible conditions to a land-use approval. So long as the contribution is roughly proportionate to the proposed development’s impact on the local infrastructure, approvals can be conditioned upon the funding or construction of public infrastructure, such as water, sewer and roadway improvements.

Although land-use authorities cannot technically require community-benefits agreements, they often weigh heavily in certain zoning cases where there is a sensitive community group whose support is desired for the zoning case. However, the regulatory authority would not be a party to any such agreement, as it would be between the developer and the private parties with concerns related to the project.

Texas does not provide a formal right of administrative appeal for zoning decisions. Denials of zoning or land-use entitlements can only be challenged through litigation, and such challenges face a high bar because courts heavily defer to the legislative discretion of city councils.

By contrast, certain administrative decisions, such as building permit denials, may be appealed to the local board of adjustment or land use commission depending on the type of approval and specific city code provisions, consistent with state law and local procedures.

In Dallas, an appeal must be made within 20 days after the date a decision is made by the administrative official.

Third parties have rights to participate in a planning and zoning approval process. Discretionary approvals will include public hearings before elected and appointed officials, at which any member of the public may participate. In the context of a zoning change, notices are mailed to property owners within at least 200 feet of the project subject to nuances under new state law, and many cities extend that distance. If a certain percentage of those responding object in writing, it can trigger a supermajority vote of the city council to obtain a zoning approval.

Third parties are generally not entitled to an appeal of a decision on a land-use application. For zoning requests, third parties are not entitled to appeal a relevant authority’s decision to approve or deny a land-use application. There is no formal appellate right, other than the general litigation process available to all citizens of Texas.

Generally, third-party objectors or supporters are the primary factor in the outcome of a zoning application, as municipalities generally value the input of their constituents. Most objections and support statements come just moments before a relevant authority’s deliberation and decision in land use cases, but constituent participation can occur long before the public hearing.

A regulatory authority’s response to third-party requests for community benefits agreements varies by jurisdiction. The most common response is that it is encouraged, but it is a matter to be privately addressed without the regulatory authority’s input.

Contract zoning in Texas is illegal, so there are no agreements related to the zoning or fundamental entitlement, but there are myriad development agreements executed to facilitate projects, such as the following.

• Facilities agreements or cost sharing agreements between developers and municipalities for construction of infrastructure, particularly when the municipality is participating in the cost of the infrastructure if the developer is constructing an improvement that goes beyond what they are legally required to construct. The municipality will participate in the cost, and the agreement will set forth the terms.
• Impact fee credit or reimbursement agreements between a developer and a municipality. In these agreements, the developer will construct public infrastructure on the city’s capital improvements plan and receive credits against impact fees or reimbursement of impact fees equal to the development costs expended by the developer to construct the applicable improvements.
• Other types of development agreements on terms negotiated between the developer and municipality, such as construction of amenities, trails and other aspects of the development.
• Incentive agreements through tax abatements or grants to incentivise certain projects, usually for large mixed-use commercial developments, developments that provide meaningful jobs (eg, corporate relocations or manufacturing facilities), data centre developments or speciality projects (eg, entertainment).
• Utility agreements, if the utility provider is not the municipality.
• Annexation agreements for properties located in the extraterritorial jurisdiction of a municipality and the developer desires to annex into the city or town. There is special authority for these types of agreements under Chapter 212 of the Texas Local Government Code. Over the last few legislative sessions, the Texas legislature has significantly curtailed the ability of cities to annex property. If a landowner elects to voluntarily annex into a city’s limits, they can do so subject to a negotiated agreement that dictates permitted land uses, development standards, and other regulations that are important for the development of the property.

Government authorities enter into development agreements under a variety of grants of legislative authority. Authority for annexation and development agreements for property in a city’s extraterritorial jurisdiction is governed by Chapter 212 of the Texas Local Government Code. Impact fees are governed by Chapter 395 of the Texas Local Government Code. Chapter 312 of the Texas Tax Code and Chapters 380 and 381 of the Texas Local Government Code provide authority for incentive agreements, such as tax abatements and grant assessments.

Development agreements typically cover a wide variety of topics, such as construction of infrastructure, impact fee reimbursement, construction of amenities, incentives, provision of utilities and annexation.

Zoning generally runs with the land and cannot be subject to expiration. Ministerial approvals, such as plats and site plans, typically have an expiration date if the projects are not timely commenced or completed. Chapter 245 of the Texas Local Government Code dictates when a project is deemed to be dormant for purposes of vested rights. Generally, plats or site plans cannot expire in less than two years. Vested rights can extend if there is progress toward completion of the project. Specific use permits or conditional use permits, which are not a zoning district approval, but which are an approval for a specific use, may also have an expiration date.

If a land use application is denied, there is usually a restriction in the city ordinance that prevents an applicant from re-applying for the same zoning on the same property within a certain period of time without a waiver by the city council, but this is dependent on each city’s ordinances. With respect to ministerial approvals like plats or most types of site plans, there is no barrier to reapplying. The Texas legislature has adopted strict rules to force cities to act more quickly on such applications, and there has been a proliferation of city attempts to obviate that requirement from the state, which often results in multiple applications and denials or waivers of the right to quick action by the developers to finally obtain such ministerial approvals.

Land use approval rights vesting is addressed in Chapter 245 of the Texas Local Government Code, also known as The Vested Rights Act. It has a complicated series of exceptions, but generally, it means that the rules that are in place on the date that the first application for a permit for a project is made remain applicable to the project through its development, construction and operation.

Land use approval rights vest on the date on which the application is made for the series of permits that are required for a project. Notably, the vesting date is not the date of permit approval, but rather the date of submittal of a complete application that provides the applicable jurisdiction with fair notice of the project.

Under Texas law, there are specific statutes of limitations or other time-based restrictions that govern how and when challenges to land use approvals or denials must be brought and within which land use approvals or denials must be challenged. One of the most important is the “validation statute”, found in Texas Government Code § 51.003. This statute provides that any defects, irregularities, or deficiencies in the process by which a municipality adopts an ordinance, regulation, or similar governmental action are automatically cured after three years, unless there is an applicable statutory exception. Once the three-year period expires, a private party generally cannot attack the validity of the land use regulation based on procedural defects in its adoption, in which case only the state may challenge procedural defects by initiating a quo warranto proceeding.

Otherwise, challenges to land-use decisions are typically governed by the same limitation periods that apply to the underlying cause of action and a period set by the municipality or county in their code of ordinances or regulations (for example, challenges based upon ultra vires claims, declaratory judgment actions, takings claims, or claims seeking judicial review of an administrative decision). Each type of claim carries its own statute of limitations or deadline, and in certain instances, the governing statute or local ordinance may impose even shorter deadlines.

There are generally two categories for review of land-use decisions.

• Discretionary approvals – most notably zoning decisions, which are treated as legislative acts, meaning a high amount of deference to the locally elected body in making the decision. There are some very limited instances in which such a decision could be deemed illegal, such as an unconstitutional delegation of their authority to a non-elected body or when the decisions are arbitrary or capricious. These are extremely difficult standards to satisfy.
• Ministerial or administrative approvals – which are subject to a stricter and more objective standard that requires citations to the specific law that is supplied in either support or denial of the application. And if such a specific citation cannot be provided, then the denial can be challenged.

Due to governmental immunity and the various procedural “roadblocks” available to governmental entities in the judicial process, it can be difficult to sue the government and succeed in overturning the approval or denial of a land use application. However, Texas law provides exceptions to governmental immunity in certain circumstances, such as when a city acts outside its legal authority (ultra vires), fails to follow mandatory administrative procedures, or violates clear, non-discretionary standards. These exceptions allow developers to pursue judicial relief and overturn a wrongful approval or denial of a land use application.

It is uncommon for developers, supporters or opponents of a development project to seek judicial review of a land use decision, but it does happen in the appropriate circumstances.

Efforts to block a development through litigation or similar tactics are rarely successful when directed at a zoning decision – particularly when the city has complied with all statutory procedures. By contrast, challenges brought by developers to other types of denials, such as plats, site plans or matters involving vested rights, are more frequently successful. In those contexts, courts are more willing to overturn a governmental entity’s wrongful approval or denial because the governing standards are typically objective, mandatory and less discretionary than zoning decisions.

The procedural requirements at issue are generally obligations placed on the governmental authority – not on the applicant or the developer. While the developer, lender or investors (or their respective attorneys) can monitor the process and advise on whether those requirements appear to have been met, they do not have direct control over how the government administers them.

Once litigation is filed, projects frequently pause or stall, often resulting in the loss of committed equity. For that reason, it is critical to involve experienced land use counsel both before and after project approval to ensure the process is properly managed and to respond quickly and effectively if a challenge arises.

To neutralise threatened or filed litigation by opponents of a project, developers are increasingly proactive, ensuring that their applications and the government’s procedures strictly comply with all legal and procedural requirements, so that the record is as strong as possible. When litigation arises, typically the goal is to secure an early resolution to get the project progressing again. This often involves seeking immediate injunctive relief, including temporary restraining orders, temporary injunction hearings, and other expedited measures designed to prevent delays and protect the developer’s rights while the case proceeds.

The primary development incentive tools available to government authorities fall into two main categories: (i) direct financial incentives and (ii) special financing districts.

These tools reduce the tax burden on a project or provide direct financial assistance.

• Tax abatements, Chapter 312, Tax Code – local governments can grant an exemption or reduction in property taxes on the added value of new development for a specific period to encourage investment and expansion.
• Economic incentive grants, Chapters 380, 381, Texas Local Government Code – cities (Ch. 380) and counties (Ch. 381) can provide grants, loans or services. This aid is typically structured as a rebate of a portion of the property taxes or sales taxes generated by the project.
• Public facility corporations, Chapter 303, Texas Local Government Code – this is a powerful tool for multiple family housing because it is one of the few mechanisms that can reduce the Independent School District ad valorem tax levy. The tax reduction is granted in exchange for restricting approximately half of the units to attainable income levels for renters.

These mechanisms are used to fund public infrastructure, often by capturing future property tax growth or levying special assessments.

• Tax increment financing, Chapter 311, Tax Code – a local government creates a Tax Increment Reinvestment Zone. The tax revenue generated by the increase in property value within the zone (the “increment”) is collected and dedicated to fund public improvements within that zone.
• Special districts (MUDs & PIDs) – these governmental entities finance and construct necessary infrastructure, especially for development outside of existing city limits (unincorporated areas).
1. Municipal Utility Districts (MUDs) – primarily used for development outside a municipality, MUDs issue bonds to fund utilities (water, sewer, drainage). These bonds are repaid through ad valorem taxes and user fees on properties within the district.
2. Public Improvement Districts (PIDs) – used by a local government to finance specific public improvements, with the cost recovered through a special assessment on the benefitted properties.

Generally, there are no uniform underwriting standards a government authority would apply when reviewing a request for development incentives. In the authors’ experience, a government authority is more likely to evaluate the overall impact of the project on the community.

See response to 2.5 Conditions to Approval. The requirements imposed by government authorities granting development incentives are contractual and project-specific, but they generally focus on measurable metrics in capital investment, job creation and economic impact.

It is common to see requirements related to the improvement of the public realm, connectivity, walkability, necessary infrastructure for the project, attainable or mixed-income housing requirements and landscaping, particularly in cases that involve sensitive residential adjacencies.

The primary tax consideration is distinguishing between tax abatements (where taxes are never actually paid) versus reimbursements or grants (such as those under Chapters 380 and 381, Texas Local Government Code). The resulting tax implications must be evaluated with a qualified tax professional.

Restrictions on development and designated use are enforced by local government entities (cities and counties) using their police power to promote public health, safety and general welfare.

The authority to enforce development and use restrictions is strictly divided based on whether the restriction is public (government-mandated law) or private (contractual agreement).

• Public restrictions (zoning, codes, permits) – are enacted by government entities under their police power to regulate land use for public health, safety and welfare.
• Private restrictions (deed restrictions and covenants) – are contractual covenants that “run with the land” and are established by a developer or private owners.

In limited circumstances, third parties may have private causes of action. There are limited examples of nuisance-type lawsuits filed by private parties to challenge development projects; however, these cases are rare.

The remedies available to compel compliance with land use regulations vary significantly based on the enforcing party (government versus private) and the nature of the restriction (public law versus private contract).

Penalties may include fines, revocation of operating privileges or even imprisonment. In most cases, violations are treated as misdemeanours –similar to receiving a speeding ticket – but the most serious consequence is the revocation of the ability to operate. Fines can be issued on a daily basis per occurrence, up to a maximum of USD2,000 per occurrence, so penalties can quickly accumulate depending on the situation.

Land-use regulations vary on a city-by-city basis. Some Texas cities require lobbyists to register, pay annual fees, disclose client relationships and report meetings with elected and appointed officials and senior city staff.

Registration requirements and responsibility may fall to the representatives, and on a case-by-case basis, it can also be on the applicant or developer to ensure compliance with registration requirements. The answer often depends on the specific city’s regulations.

Generally, the campaign-finance practice is not prevalent in land use cases in this jurisdiction. However, some cities – such as Dallas – have proposed limitations on representatives of certain high-profile projects, restricting their ability to make such donations while an application is under consideration.

Confidentiality and public disclosure regulations on land use-related documents are generally subject to the Open Records Act (also known as the Public Information Act).

Most documents created by or submitted to a governmental body are considered public information and must be released upon request.

A common exception to disclosure requirements involves negotiations related to economic incentives. For particularly sensitive cases or development proposals, non-disclosure agreements (NDAs) are sometimes entered into with the municipality. In the authors’ experience, municipalities generally honour these agreements.

All documents submitted in land-use applications are subject to disclosure under the relevant Freedom of Information (or Public Information) laws, unless a specific legal exception applies. Most local governments proactively make these records publicly available as soon as the applications are filed.

Freedom of Information laws (whether referred to as the federal Freedom of Information Act (FOIA), or a state’s Public Information Act (PIA) or Open Records Law) generally apply to all records held by government agencies, including those related to land-use applications.

There are some exemptions to such freedom-of-information laws. Exceptions most commonly apply to negotiations involving economic incentive agreements or to information that could result in competitive financial harm – a criterion that is often subjective.

Ultimately, the decision to disclose rests with the government. However, state law provides a process that allows the party whose information has been requested to submit a briefing and objection to the Attorney General regarding its disclosure.