Stop SB1567/HB2797 Unlimited Unrelated Occupants in Family Neighborhood Homes

Texas House Bill 2797 and Senate Bill 1567 are extraordinary bills that will prevent most Texas cities from limiting the number of unrelated people in a home, effectively allowing family houses in every neighborhood to be replaced by high-occupancy rent-by-the-room operations. The cash flow from 6-8 independent occupants will empower corporate rental investors, who already buy over 25% of all homes sold in Texas, to buy much more expensive middle-class housing. And working-class housing will become even less affordable to those who need affordable housing the most. Despite the extraordinary potential impact on Texans, there is very little public awareness of the bill. SB1567 has already been passed by the Senate (4.14.25). The House committee has approved HB2797, which could be voted on by the full House within a week (4.15.25). If approved, family neighborhoods would be stripped of their protection on September 1, 2025.

How will the bill affect my neighborhood? Currently, most city ordinances allow a family, plus some number of “unrelated.” There is no limit on the size of families, but most cities limit the number of unrelated occupants to 3-4. If passed, the number of unrelated will rise to safety limits, which will be based on the square footage of the home's bedrooms. The formula will generally force cities to allow 6-8 unrelated adults in traditional 3-4 bedroom homes.

Applies in home-rule cities with higher education, which probably includes you. College students at Texas A&M initially proposed that the bill be applied to all home rule cities. However, the Senate Committee later restricted it to only towns that have “public institutions of higher education” as defined in the Education Code. This sounds like a large university. However, the code defines “higher education” as including any public institution, such as junior colleges and technical schools. Most cities with populations larger than 10,000 have one, and much of the state lives in affected cities. However, most also do not think of themselves as university towns and are unaware of the proposed bill. In larger cities like Dallas, the presence of only one institution will cause all family neighborhoods to lose their protection. A city that invested in higher education will be punished by losing its family protection on September 1, while the city next door that didn't will remain protected. Small, growing cities will hesitate to establish even a nursing school. There is no rational reason to tie the zoning in a city to a definition in the Education Code. This appears to be a poorly written bill that was written with no assessment of the collateral damage it might do.
Who benefits? Not families. Investors and other special interest groups are using “affordable housing” as a smokescreen, distracting from their anti-family social or profit-driven agendas. The rates current owners can charge are increased by higher occupancy. Other owners adopt the same rent-by-the-room model and increase their rates so families (owners and renters) are financially displaced. In addition, if occupancy is limited to 3-4 by the structure of an older home, the potential increase in profit justifies tearing it down and replacing it with homes specifically designed for 8-10. Existing rental operators that were already profitable benefit from immediate large gains in rental income and property values, and speculators who buy early in anticipation of changes in the law achieve significant gains from teardowns in older affordable neighborhoods. The older home that was affordable to both families and students is gone forever.

Who suffers? Families that need affordable housing. Rental investors typically purchase the lowest-cost housing first, so homeowners in the lowest-income neighborhoods tend to be the first to be financially displaced. This bill is state-sponsored displacement of the most vulnerable by investors profiting from the combined household rental purchasing power of 6 or 8 unrelated adults. We need affordable housing, but we must also stop the precipitous decline in home ownership in Texas. A phrase used in Europe for the forced density being promoted in the name of affordability is “the brutalization of housing.” That's what we're doing to our families.

Don't count on your HOA to save you. HOA and deed-restricted subdivisions were exempted. However, does your HOA even limit unrelated occupancy? And if it does, can your HOA afford $20,00-50,000 to sue today's rental investors who exploit Texas appeals processes to run up the cost of enforcement? It is also an extraordinarily cynical maneuver for the authors of this bill to tell middle and upper-class HOA residents not to worry about it – because it only hurts working-class families.

Density Dogma. Only three states in the nation have forced their cities to eliminate the unrelated occupancy limits: Oregon, Washington, and Colorado. These have passed numerous other anti-family bills. The mechanics of what the authors are doing in this bill is to eliminate any reference to families as the purpose of any zoning. Single-family zoning will cease to exist. This bill will result in an unfair and arbitrary patchwork of regulations with no logical basis for why some cities may have zoning for families and others not. Whether you agree with its objectives or not, it is a badly designed bill with enormous potential for unintended consequences.

When House Representative Vasut introduced HB2797, he suggested anyone who opposed his bill was an un-American NIMBY. The concern with this bill is not from NIMBYism. The people who will be hurt the most are not NIMBYs, but our most vulnerable citizens and young families who will have to compete with an enormous increase in rental cash flow and home values when rent-by-the-room operations are allowed in their neighborhoods. This is about responsible, locally accountable government having the ability to protect the most vulnerable families. Texas cities are working hard to provide real affordable housing solutions—this bill does the opposite.

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