Reducing Minimum Lot Sizes in Houston, TX

Background

Houston is the only major American city without zoning, meaning it does not comprehensively separate communities by use type, nor does it directly regulate density. However, the city does have land use regulations that shape neighborhoods, including minimum parking requirements and lot sizes. Minimum lot sizes set a minimum square width below which properties cannot be subdivided. In the 1990s, Houston’s population rose steeply, necessitating an increase in the supply of affordable homes.

Reforms Implemented

In 1998, Houston made substantial revisions to its Development Ordinance as the result of a comprehensive review of planning practices by a citizen committee as well as Houston’s Planning Commission. The reforms were designed to allow for denser, more walkable neighborhoods.

Specifically, the city lowered the minimum lot size for single-family homes from 5,000 square feet to as low as 1,400 square feet subject to certain technical conditions in the city center (and 3,500 square feet within most of its broader urban area). Functionally, this change made it possible to divide a large single property into three units. The new ordinance also made the process for granting approval for such redevelopments more efficient. In 2013, Houston expanded the lower minimum lot sizes beyond the city’s most urban area to apply citywide.

Notably, communities were allowed to opt out of new requirements to allow for smaller lots. Researchers have posited that the opt-out flexibility was crucial for allowing the new requirements to pass, as it quelled local opposition to the measure.

Early Evidence

Over 25,000 homes were developed on lots under 5,000 square feet between 1999 and 2016—clear evidence that the 1998 reform directly allowed for denser housing. New, smaller lots were particularly prominent in underutilized commercial land and middle-income residential communities, likely because wealthier communities opted out of the reduced lot size requirements while lower-income communities lacked sufficient demand for any new housing that might be built.

Recent research by NYU’s Furman Center found that, from 2005 to 2020, Houston saw more than 5,300 conversions of detached single-family houses to townhouses—where houses on larger lots were replaced with multiple taller, thinner homes. The Furman Center study estimated that less than one-fifth of new dense housing was a result of conversions, with most dense housing constructed on commercial and industrial land. Single-family to townhouse conversions were concentrated in the urban core where smaller and older houses had existed and produced relatively affordable homes. The median townhouse on a formerly single-family lot in 2020 was valued at $340,000, compared to $545,000 for single-family houses built 2007 or later on unsubdivided parcels.

As the graph below shows, 2- to 4-unit housing supply increased in the years following the 1998 and 2013 reforms, though a variety of factors undoubtedly played a role in these trends. This data also omits single-family townhomes, which were a large component of the rise in denser housing. Houston has a median house price below the national median despite decades of job and population growth.

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