Texas Lawmakers Consider Throwing Zoning Out The Window For Office-To-Resi Conversions

With around 25% of offices in Texas' four largest metros vacant and home prices soaring, state lawmakers are considering a plan that would ease zoning rules for landlords converting unused commercial space into multifamily units.

State Sen. Bryan Hughes’ bill would prohibit Texas’ largest cities and counties from requiring property owners to rezone when converting commercial properties like office buildings, shopping centers and warehouses into apartments or condominiums, The Texas Tribune reported. 

The proposed legislation would only apply in cities of more than 60,000 residents in the 13 Texas counties with a population of more than 420,000 residents.

“It's a simple matter of looking at the housing stock that's available and looking at the growing demand, and looking at every option to expand those opportunities,” Hughes, a Mineola Republican, told the Tribune. “The Lord’s not making new land.”

The plan is one of several proposals that target zoning requirements being considered by the Texas Legislature as it addresses the state’s housing shortage and the rising costs of homes and multifamily units.

More than 50% of Texas renters spend more than 30% of their income on housing costs, according to a 2024 study from Harvard University on the nation’s housing market. 

Meanwhile, more than 100M SF of office space sits vacant in just Dallas-Fort Worth and Houston, the state’s two largest metros.

Combined, the cities are losing out on nearly $3.2B in rent because of the vacancies, according to a study by Switch On Business. The study calculates the estimated loss by multiplying the amount of vacant office space by each city’s average asking rent per square foot using data from Cushman & Wakefield’s Q1 2024 office report.

A record 70,700 new housing units are in the office conversion pipeline nationwide, according to 2025 RentCafe data. That figure is more than triple the approximately 23,000 planned in 2022. 

Office-to-residential conversion is the most popular category of adaptive reuse projects, making up 42% of the more than 168,000 conversions in the pipeline, according to RentCafe.

DFW is the only Texas metro with enough projects on the way to make the national top 20. The Metroplex has nearly 2,800 units being converted. Still, that total represents an almost 14% drop from last year, and just over 6% of DFW’s office inventory is considered suitable for conversion. 

The national average sits at nearly 15%. 

At a Bisnow event late last year, Adolfson & Peterson Construction Regional President Will Pender said he regularly disappoints office owners in places like Plano who call asking about potential conversion projects.  

“I get that call every other week,” Pender said. “Not every building in the Metroplex or even in the country can be converted to adaptive reuse.”