Tex. Loc. Gov't Code Ann. ch. 214 (subchs. A, B, C, G, H, I, Z) § 214.905
PROHIBITION OF CERTAIN MUNICIPAL REQUIREMENTS REGARDING SALES OF HOUSING UNITS OR RESIDENTIAL LOTS.
Operative Text
Sec. 214.905. PROHIBITION OF CERTAIN MUNICIPAL REQUIREMENTS REGARDING SALES OF HOUSING UNITS OR RESIDENTIAL LOTS. (a) A municipality may not adopt a requirement in any form, including through an ordinance or regulation or as a condition for granting a building permit, that establishes a maximum sales price for a privately produced housing unit or residential building lot.(b) This section does not affect any authority of a municipality to:(1) create or implement an incentive, contract commitment, density bonus, or other voluntary program designed to increase the supply of moderate or lower-cost housing units; or(2) adopt a requirement applicable to an area served under the provisions of Chapter 373A, Local Government Code, which authorizes homestead preservation districts, if such chapter is created by an act of the legislature.(c) This section does not apply to a requirement adopted by a municipality for an area as a part of a development agreement entered into before September 1, 2005.(d) This section does not apply to property that is part of an urban land bank program. Added by Acts 2005, 79th Leg., Ch. 1103 (H.B. 2266), Sec. 1, eff. September 1, 2005.Renumbered from Local Government Code, Section 214.904 by Acts 2007, 80th Leg., R.S., Ch. 921 (H.B. 3167), Sec. 17.001(55), eff. September 1, 2007.
Texas Local Government Code § 214.905 prohibits municipalities in Texas from setting a maximum sales price on privately produced housing units or residential lots, whether through ordinances, regulations, or building permit conditions. The rule does not strip cities of the ability to offer voluntary incentives—such as density bonuses or contract commitments—aimed at expanding affordable housing supply. Certain narrow exceptions apply, including development agreements executed before September 1, 2005, and properties enrolled in urban land bank programs.
Plain English — not legal advice.
Under § 214.905, Texas municipalities generally cannot cap the price at which a privately produced home or residential lot may be sold, which means local governments cannot use zoning approvals or building permits to impose price ceilings on market-rate transactions. Operators and developers working in Texas typically verify whether a specific project falls under one of the statute's exceptions—such as a pre-2005 development agreement or an urban land bank program—before assuming the prohibition applies in full. Understanding this provision can be relevant when evaluating the regulatory environment for new construction or lot sales in any Texas municipality.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Section 214.905 of the Texas Local Government Code limits what local governments can do to control housing sales prices, which means municipalities generally cannot mandate that privately produced homes or lots be sold below a certain price. For tenants interested in affordable homeownership pathways, it is worth knowing that cities may still offer voluntary programs—like density bonuses or incentive agreements—designed to increase the supply of lower-cost units, even though mandatory price caps are prohibited. Tenant-rights organizations or housing counselors can help individuals understand how this provision interacts with local affordable housing programs that may still be available.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 28, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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