Stop SB1567 Allows Unlimited Number of Unrelated Occupants, Setting Precedent for Eliminating Family Zoning in Texas

SB 1567 has been approved by the House and Senate and was sent to Governor Abbott on 6.1.25. The text can be found here. He has 20 days to consider it, but could also sign it in only one day. Please contact Governor Abbott here immediately to oppose the bill. In the appropriate dropdown box, indicate that the type of issue is “Local Government”. Also, place dashes in the phone number you provide, or the software will not accept your comments.

We have not previously suggested a standardized text to provide input, and it's been helpful that so many comments were thoughtful and made in the interests of everyone. Please continue to do so, but at this point, the governor's bill analysts are likely overwhelmed with comments on over 1000 bills, and our input needs to focus on only the issues that might cause the governor to veto, and be in a consistent format so that staff quickly identifies the message from having read it in detail only a few times before. Please consider highlighting, copying, and pasting the text at the bottom of this page (we've tested the state's software to ensure this communicates visually). In the appropriate dropdown box, indicate that the type of issue is “Local Government”. Note that you must put dashes in your telephone number or the software won't accept your comments.

See Sidebar for Summary of Key Points

What does HB2797/SB1567 Do?

Texas Senate Bill 1567 is an extraordinary bill that will prevent cities from limiting the number of unrelated adults living in a single home. This change would effectively allow traditional family homes in any neighborhood to be purchased by investors and converted into high-occupancy, rent-by-the-room operations. The rental income from 6–8 unrelated adults per house empowers corporate landlords, who already purchase over 25% of homes sold in Texas, to buy even more expensive upper middle-class neighborhoods. Their dominance in working-class housing would also grow, making affordable homes even more out of reach for the families who need them most. Cities limit the number of unrelated occupants that can live together for a variety of reasons, but the need to keep single-family housing affordable to families is a major one. Cities already allow higher-density “middle housing”, which are areas with utilities, roads and other infrastructure designed for it. And of course, there are also apartments where multiple unrelated people live, particularly students. The question is not whether high occupancy is allowed, but whether the state will take away the ability of cities to choose where it occurs, whether they will have the ability to protect any families or couples from economic displacement by operations with an economic intensity that belongs in Middle Housing, not Single-Family housing. Most families cannot financially compete with the combined household income of more than 3-4 occupants, and very few can compete with 6-8. Ironically, forcing cities to allow these investors into neighborhoods is promoted as a solution for affordable housing, despite its potentially devastating impact on family neighborhoods. College Station provides insight into the impact of multiple unrelated tenants, which is common in college towns. It allows up to 4 unrelated, and even with this low number, only 30% of homes are still owner-occupied, while the state average is 62%. Public awareness of the devastating impact of high occupancy, rent-by-the-room investors cities will be forced to allow by SB 1567, is still very low, even though it has now been sent to the governor (5.29.25).

The second change, with even greater long-term effect on Texans, is the elimination of the word “family” from all language describing the intent of any neighborhood. Cities must immediately strike words such as “family, related, blood-related, adopted, and sanguinity”, effectively erasing the legal basis of family-oriented zoning. This has been done in only a few states with a history of anti-family overreach by the state government (i.e., California, Oregon, Washington, Colorado, New York). The normalization of the anti-family perspective has made it politically acceptable for some states to have also stricken this from deed restrictions, enabling high occupancy in HOA neighborhoods, as well. Over half a century ago, the Supreme Court established the right of any number of related people to live in a home, but it allowed the number of unrelated people to be limited. The intent of SB 1567 in eliminating “families” from occupancy ordinances is to sidestep this ruling by treating all occupants as “unrelated”, even if they are a family. Texas isn't Oregon. Very few locally elected officials would agree to strike families from our zoning rules, or from the central place they hold in our society, if they understood the path this bill puts Texas on. So the advocates have sought to get state legislators to do this for them. Remember, the legislators only meet to consider new laws every 2 years and there were over 8000 bills filed this year. They depend on their constituents to tell them if proposed legislation is damaging. Others with financial interests are telling them it won't be. The immediate impact has been reduced by Senators and Representatives negotiating to bracket out their cities, so instead of applying to 291 cities, it only strips these rights from about 8 cities. But once the principle and social agenda behind the argument that family housing is discriminatory is established by a state law, it will be difficult to stop it from eventually being applied to all of Texas (See California, Washington, Oregon, Colorado, and New York). The claim of discrimination is simply false. The law limits the number of unrelated so the commercial intensity is compatible with what families can afford, not who those unrelated are.

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 many cities limit the number of unrelated occupants to 3-4. If passed, the number of unrelated will rise to a safety formula the authors are proposing that limits occupants based on the square footage in a home's sleeping areas“. The first occupant requires 70 sq ft, and each additional person in a bedroom requires 50 more sq ft. In cities that allow small bedrooms, investors divide the garage and large rooms to create more rooms. This bill forces cities to require only 70 sq ft per occupant, so most small, affordable 3-4 bedroom homes can be partitioned to accommodate 6-8 unrelated adults. If that's not practical or the market won't accept such crowded conditions, the cash flow from rent-by-the-room is so great it is economic to tear down smaller homes and replace them with larger structures specifically designed for 8-10. These high-occupancy houses are already allowed in most college towns in the U.S., and Bryan and College Station both have zoning for them. Rent-by-the-room operations are highly profitable and incompatible commercial operations that can displace families financially through higher rental rates, increased property taxes, or inability to compete to buy the next house on the market. This will be true even in the upper end of a city's middle-class income distribution.

Clauses in the Bill Are Designed to Make Even Its Own Safety Limits Unenforceable

An extraordinary clause prohibits law enforcement from looking at leases when investigating occupancy. If your city officials cannot know who belongs in a house, they cannot know who the occupants are that are violating the safety limitations, so they cannot fine them. The effect is that there is no consequence to overoccupying a home, even if the number is so great it creates a safety hazard. Either this is intentional, or it is yet another example of a poorly designed bill that should not be approved until there is time for the public to become aware of it, and for cities to study its unintended consequences. Many criminal investigations are based on observing the number of occupants, including human trafficking, gang activity, and drug distribution. The prohibition of collecting occupancy-related evidence could inhibit these, or allow accused criminals to claim investigations were illegal.

Who benefits? Not families.

Those who believe this bill will create affordable housing assume that if more people are allowed to live in a home, they will split the cost and each pay less. But this does not happen in a rent-by-the-room market, such as a college town. If more than 4 occupants are willing to live in a home, the rental owner can raise the rent because the extra occupant has no choice but to go somewhere else - and pay the same going rate per bed. The typical rate last year in College Station was $500 per bed, whether the home was contracted as a whole or by the room. There are good insights into how the rent-by-the-room model is working in cities that are not college towns in the first 10 min of this Splitpad Discussion.

Most cities allow 4 unrelated occupants, and more than four unrelated adults don't want to live together in the home in this photo on the left. Consequently, the effect of this bill will be that investors tear it down and build the house on the right to achieve cash flow from 8-10. We have two decades of experience with hundreds of high-occupancy student houses in College Station and Bryan. Not only will they never be affordable to any family, but this is the most expensive single-family housing for students as well. While $500-$600 per bed is common in older housing, the rent in high occupancy homes is typically $700-$900 per bed in College Station. The proponents of the bill should not assume more occupants will split cost, when they are enabling investors who charge by the occupant, and not by the house. If instead, their objective is simply density, this is still not the solution. The small city of College Station has 191 apartments, 20 high-rises next to the campus, and has just rezoned 2000 properties to Middle Housing, any of which will achieve greater occupancy per acre than the house on the right. Families with children have different needs, as do elderly attempting to age in place on fixed incomes, and the 5000 single parents who average $45k per year in income in College Station. Cities need the ability to make local zoning decisions to ensure there's somewhere that's affordable for everyone.

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, and the financial displacement this bill will allow will reach all the way through a city's middle-class housing. A phrase heard in Eastern Europe for the forced density being promoted in the name of affordability is “the brutalization of housing.” Families with children already tend to live in the most expensive housing they can afford. So when they are displaced by increasing rent, they tend to move downward into worse housing or apartments. The cities still impacted all have very high percentages of students competing with relatively few famlies; College Station 48%, Bryan 43%, San Marcos 61%, Huntsville 60%, and Edinburg 30%. The authors are elminated preservation of family housing in the cities where famlies need to be proteced from the preditory cash flow of rent-by-the-room investments the most.

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? And opponents of family neighborhoods who have been emboldened in other states by the elimination of the word “family” in occupancy laws have gone on to strike if from deed restrictions as well.

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.

When House Representative Vasut introduced the companion house bill, 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.

Please Copy and Paste These Comments to Governor

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PLEASE VETO SB 1567: THE TEXAS UNLIMITED OCCUPANCY BILL

TARGETS BRYAN-COLLEGE STATION (POTENTIALLY UNCONSTITUTIONAL)

Multiple amendments reduced the cities affected from 291 to only 4 to eliminate political resistance, but evidence suggests College Station was the target all along. Also, one clause now specifically targets only Bryan. This bracketing violates the Texas Constitution.

BASED ENTIRELY ON A FALSE CLAIM THAT FAMILY ZONING IS DISCRIMINATORY

The authors falsely claim that family-based zoning ordinances are illegal, despite U.S. Supreme Court approval and no contrary Texas Supreme Court ruling. The legal structure of these ordinances is common nationwide. If the true motivation for targeting College Station and Bryan was to address discriminatory ordinances, why was bracketing repeatedly renegotiated until the other 286 cities were allowed to establish or continue with these same practices? Family-based zoning ordinances protect families and should be allowed everywhere.

GUARANTEES INVESTORS WILL BUY OUT EVEN MORE TEXAS HOMES

SB1567 would result in 5–10 unrelated tenants in any home next door in any neighborhood. The combined rent is typically greater than $4,000 and families cannot compete to rent or buy. This cash flow is compatible with Middle Housing zoning, where college towns allow them. Investors have already bought out 70% of College Station’s single-family homes with the cash flow from the 4 unrelated occupants allowed in all housing, and 67% of those who work here do not live here, largely because they cannot afford to compete.

THANK YOU FOR PROTECTING OUR WORKING AND MIDDLE-CLASS FAMILY NEIGHBORHOODS

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