SB840, a new state law that went into effect on September 1, 2025, dramatically alters land use on commercial property in Austin. It allows residential development—including multifamily and mixed-use—on properties zoned for office, commercial, retail, or warehouse use without a zoning change or a public hearing.
Multifamily and mixed-use residential developments in commercial zones will be allowed to:
- Reach a minimum height of 45 feet or the height that applies to commercial uses for the site.
- Reach a density of up to 54 units per acre.
- Include setbacks that are 25 feet or those imposed on commercial uses, whichever is less.
- Develop an unlimited floor-to-area ratio (FAR).
This will allow automatic height increases in Neighborhood and Limited Office zoning (NO & LO) and Neighborhood Commercial (LR) with residential redevelopment. These are currently limited to 2 and 3 stories.
It also allows the conversion of non-residential buildings and prohibits traffic impact analysis, fees for traffic improvements, and impact fees. Additionally, it restricts utility improvements to those necessary for serving the proposed converted building.
The biggest impacts will be on large commercial or office tracts that do not already have mixed-use zoning, as well as small office and retail spaces located within existing neighborhoods.
By eliminating zoning hearings and traffic impact studies, SB 840 removes consideration of the compatibility of the project with the surrounding or nearby neighborhood.