What Texas Senate Bill 15 Says About the Right Size for a Residential Lot

When the Texas Legislature passed Senate Bill 15 in 2025, it sent an unambiguous message about the relationship between lot size minimums and housing affordability: smaller lots mean more attainable homes, and government mandates requiring bigger lots are a barrier — not a benefit — to working families trying to own a home.

The bill was signed into law by Governor Greg Abbott and took effect September 1, 2025. (Source: Foley & Lardner, 2025) It represents the most significant state-level intervention on residential lot sizes in Texas history — and it directly contradicts the direction Montgomery County is currently considering by proposing to raise its minimum from 40 to 50 feet.

This post explains what SB 15 does, why it passed with broad bipartisan support, what the evidence behind it shows, and what it means for the debate happening right now in Montgomery County ahead of the April 9 public hearing.

What Senate Bill 15 Actually Does

SB 15 was authored by Senator Paul Bettencourt and made a top priority by Lieutenant Governor Dan Patrick. It applies to cities with populations greater than 150,000 located in counties with populations over 300,000 — covering 19 of Texas's 21 largest cities. (Source: National Law Review, 2025)

In plain terms: Texas has decided that cities should not be in the business of requiring more land per home than the market demands — because doing so makes homes more expensive for buyers without any corresponding benefit to the quality of the home or the neighborhood.

Why It Passed — and Why It Was Bipartisan

SB 15 cleared the Texas Senate 24–7 and passed the full legislature with strong support from both parties. That breadth of support matters — this was not a narrow partisan maneuver. It was a response to a statewide housing crisis that elected officials on both sides of the aisle recognized as real and urgent.

The Texas Comptroller had reported in 2024 that housing affordability had hit its lowest level since 1985. Up For Growth, a national housing policy organization, estimated Texas was short approximately 306,000 homes. Median home prices had risen 40% between 2019 and 2023 statewide. (Source: Texas Senate, 2025)

"The housing affordability crisis in Texas is real and we're facing it head-on. Removing large lot size requirements has proven to increase home construction and lower prices." — Senator Paul Bettencourt, Author of SB 15 · Texas Senate Press Release, 2025

"The price of land on which residential dwellings are built currently makes up as much as one-quarter of the sale price of a single-family home. This bill is designed to help the average Texan achieve the dream of home ownership." — Rep. Gary Gates, House Sponsor of SB 15 · Texas Senate Press Release, 2025

"Reducing minimum lot size requirements enables construction and essentially restores the concept of starter homes." — Glenn Hamer, CEO, Texas Association of Business · Community Impact, 2025

The Evidence Behind the Law: Houston Proved It Works

Texas Senate Bill 15 was not written in a vacuum. It was written with Houston's experience in mind — a real-world, multi-decade case study showing exactly what happens when a city relaxes lot size minimums. The results are among the most studied in U.S. housing policy.

In 1998, Houston reduced its minimum lot size from 5,000 square feet to as low as 1,400 square feet within the I-610 Loop — a reduction of roughly two-thirds. In 2013, the reform was expanded citywide. (Source: Pew Charitable Trusts, 2023)

What happened after 1998 was remarkable. Research by economist V. Mei found that the 1998 reform reduced the size of new construction homes — as expected — and that a typical Houston household benefited by a windfall equivalent to $18,000, with lower-income households benefiting more than higher-income ones. (Source: HUD User / Cityscape, 2024)

Thousands of townhomes and starter homes were built that could not have been built under the previous standards. Houston's housing construction accelerated — more than any comparable U.S. city. And critically, Houston's median home price remained below the national median despite decades of rapid population and job growth. The Mercatus Center's research concluded that other state and local policymakers should consider adopting minimum-lot-size reductions based on the documented success of Houston's approach. (Source: Mercatus Center, 2024)

"Houston proved it works. When lot size restrictions were relaxed, the market responded. More townhomes went up, prices went down, and real housing demand was met. The results were staggering." — Senator Paul Bettencourt, on Houston's experience as the basis for SB 15 · Texas Senate Press Release, 2025

The Direct Link Between Lot Size and Home Price

SB 15's legislative foundation rests on a well-documented economic principle: the lot itself is a primary cost driver in housing. The Texas Public Policy Foundation has documented that land accounts for approximately 20.4% of the total cost of a new home to buyers. (Source: TPPF, 2024) Rep. Gary Gates cited this figure directly when carrying SB 15 in the House.

The AEI Housing Center estimates that SB 15 alone will enable approximately 9,000 additional starter homes per year in the cities it affects — homes that would not have been possible under previous minimum-lot-size rules. (Source: AEI, 2025) Each of those homes represents a family who gets to build equity instead of paying rent.

Does SB 15 Apply Directly to Montgomery County?

SB 15 applies to municipalities — cities — with populations greater than 150,000 located in counties with populations over 300,000. Unincorporated Montgomery County is governed by the Commissioners Court, not a municipal government, so SB 15 does not directly bind the county's lot size decisions the way it binds a city like Houston or Austin.

However, that legal distinction does not change the policy argument. The Texas Legislature — representing the voters of this state — has made a clear, evidence-based judgment: lot size minimums above 1,400 square feet are a barrier to affordability that should not exist. That judgment is as relevant to unincorporated Montgomery County as it is to any city. The economic forces affecting housing affordability do not stop at city limits.

The contrast is stark. The state is moving to allow lots as small as 1,400 square feet. Montgomery County is considering requiring lots of at least 4,000–5,000+ square feet. These are not subtly different positions — they are policy directions that point in entirely opposite directions on the question of housing affordability.

What the Evidence Should Tell Montgomery County Commissioners

The case for smaller lots is not ideological — it is empirical. Here is the evidence commissioners should weigh before the April 9 vote:

Finding	Source
Land constitutes ~20.4% of total new home cost — making lot size the single largest controllable price driver	TPPF, 2024
Houston's 1998 lot size reform delivered an average $18,000 household windfall — lower income households benefited most	HUD Cityscape / Mei, 2022
SB 15 estimated to enable 9,000 additional starter homes per year in affected Texas cities	AEI, 2025
Every $1,000 home price increase eliminates 3,054 Houston-area families from the buyer pool	NAHB, 2023
56% of Houston-area households already cannot afford the current median home price of $337,200	HAR, Q4 2025
Median lot size of new Southern U.S. homes fell 22% from 2011–2021 — market is consistently moving toward smaller lots	U.S. Census / Community Impact, 2022

The evidence points in one direction. Texas has acted on it at the state level. The market has been responding to it for a decade. The question for Montgomery County commissioners on April 9 is whether they will align their decisions with this evidence — or move against it, at the direct expense of working families trying to own a home in this county.

Related Reading

• Montgomery County Affordable Housing: The Case Against a 50-Foot Lot Minimum — hub page with hearing details
• Two Lot Size Increases in 13 Months: What It Means for Montgomery County Homebuyers — the cost impact of back-to-back increases
• Renting vs. Owning in Montgomery County: The Wealth Gap That Changes Everything — why homeownership matters for long-term financial health

Sources

1. LegiScan: Texas SB 15, 89th Legislature — Bill Text and Vote Record
2. Texas Senate Press Release: Senator Paul Bettencourt on SB 15 (June 2025)
3. Lt. Gov. Dan Patrick: Statement on Bipartisan Passage of SB 15
4. Foley & Lardner: Texas Enacts Critical Real Estate Reforms — SB 15, 17, 840 (July 2025)
5. Texas Tribune: Texas Senate OKs bill to allow smaller homes on smaller lots (March 2025)
6. Community Impact: Texas Senate panel moves to cut minimum residential lot sizes (March 2025)
7. Pew Charitable Trusts: Lot-Size Reform Unlocks Affordable Homeownership in Houston (2023)
8. Mercatus Center: Effects of Minimum-Lot-Size Reform on Houston Land Values (2024)
9. HUD User / Cityscape: $18,000 household windfall from Houston's 1998 lot size reform
10. American Enterprise Institute: Texas SB 15 — A Housing Lifeline (2025)
11. Texas Public Policy Foundation: Impact of Lot Size Regulation on Affordability (2024)
12. NAHB: Priced-Out Estimates for 2023 — Houston: 3,054 families per $1,000
13. HAR / HARConnect: Houston Housing Affordability Report, Q4 2025
14. California YIMBY: Smaller Lots, Smaller Prices — Evidence from Houston (2025)