SB15 - A Step Toward More Affordable Housing for First-Time Buyers in Texas

The Texas housing market is at a critical crossroads. Skyrocketing home prices, driven in part by limited inventory and restrictive local zoning laws, have made homeownership increasingly unattainable, especially for first-time buyers. But change is on the horizon.

Senate Bill 15 (SB15), recently passed by the Texas House, proposes a significant shift: reducing the minimum lot size for new single-family homes in the state’s largest cities. While the original proposal would have allowed homes on lots as small as 1,400 sq ft, amendments now set the minimum at 3,000 sq ft, still a meaningful reduction from the 5,000 to 7,500 sq ft minimums common today.

What SB15 Means:

• Creates a minimum lot size threshold for city platting criteria for single family lots on tracts of five acres or more.
• Applies to cities with populations >150,000 located in counties with populations >300,000.
• Exempts certain areas near police training facilities or military bases.
• Currently applies to Mesquite, Pasadena, Killeen, Brownsville, McKinney, Grand Prairie, Frisco, Garland, Irving, Lubbock, Plano, Corpus Christi, Arlington, El Paso, Ft. Worth, Austin, Dallas, San Antonio, Houston.
• City may not adopt criteria that requires a residential lot to be larger than 3,000 SF, wider than 30 feet, or deeper than 75 feet.
• Prohibits city criteria that require small lots (4,000 SF) to have: setbacks greater than 15 ft (front), 10 ft. (back), and 5 ft. (side), covered parking, more than one parking space per unit, off-site parking, more than 30% open space or permeable surface, fewer than three stories, maximum building bulk, or wall articulation requirements.
• Explicit authority to require shared driveways, single-family residential permit fees, and impact fees for small lots.
• Creates cause of action for person or housing organization to challenge city for failure to adhere to these requirements.
• Effective September 1, 2025. 

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Why This Matters for First-Time Buyers
Data from the National Association of Realtors (NAR) shows that first-time homebuyers made up the smallest share of the market in recent history. And according to the Texas A&M Real Estate Research Center, the percentage of homes sold in Texas for $200,000 or less has drastically declined, from over 35% in 2014 to just under 7% in 2024.

CDS Community Development Strategies has seen this trend firsthand through our ResIntel housing studies across Texas. Local governments are struggling to meet demand for affordable housing. When smaller homes can’t be built, entry-level options simply vanish.

​Let’s be clear: Without new, smaller, more affordable homes, first-time homebuyers will continue to be locked out of the American Dream.

​Allowing for small home construction means supporting future generations of homeowners, increasing housing supply, and preventing the middle-class migration crisis seen in other states.

How ResIntel by CDS Can Help
At CDS, we work closely with cities, chambers, and economic development agencies across Texas to analyze local housing needs through our ResIntel studies.

Our work combines quantitative data with qualitative on the ground field research that helps communities identify where gaps exist—especially for entry-level housing—and plan for sustainable growth.

If your city is navigating affordability challenges or preparing for zoning changes like those proposed in SB15, ResIntel can help you make confident, informed decisions.

As we move through 2025, CDS – the leader in housing market studies - is here to provide the insights you need.

Let’s connect to discuss what these trends mean for you!
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Mike Prats
[email protected] | 281-582-0924
Ty Jacobsen
[email protected] | 281-582-0864
Steve Spillette
[email protected] | 281-582-0847