From the 89th RECAP – TMHA’s Priority Bills

SB 1341 - Relating to the regulation of manufactured homes.  

Potentially the most significant change SB 1341 made to Texas’ manufactured housing law seems the most simple, and it is. The bill swapped out our longstanding state law definition of a “manufactured home” and “HUD-code manufactured home” to reference the federal law and with it the federal definition. This change doesn’t actually make any immediate changes, as the federal definition and the Texas definition are essentially the same.

But what this prepares for is if there is ever a federal change, then Texas immediately and automatically changes as well. This will be significant if Congress changes the federal definition to allow for the option to build a home with or without a steel frame chassis.

There will probably be future Texas law tweaks we might need in future sessions depending on the exact language and other provisions that could change federally, but the bulk of the heavy lifting is done. And it positions the Texas industry to be ready to go, build, design, innovate, and seize every opportunity the moment the federal law and HUD regulations change.

Additionally, SB 1341 removes the prior law mandating a physical “brick and mortar” location in the state for a licensed retailer to store their records. The law now allows a retailer, if they choose, to store their records electronically, so long as they can be produced when needed by a state regulator.

And finally, the bill removes the nearly 25-year-old law that mandated both that the state promulgated Consumer Notice disclosure and a copy of the retail sales contract be provided to a consumer a day in advance. The Consumer Notice still must be given to the consumer before they enter into a contract, but it no longer has to be 24-hours in advance.

SB 785 - Relating to the regulation of new HUD-code manufactured housing. 

We need a brief walk-through history on this one. TMHA has tried for decades to establish some form of city zoning preemption to preserve some right to place manufactured homes in cities. TMHA has tried nearly every angle to achieve some zoning reform, and until now, we were never successful.

There were efforts in the 1980’s and 1990’s for stand alone bills trying to pass “parity” laws in Texas, but they never passed. There were two TMHA lawsuits in the late 90’s that went all the way to the Texas Supreme Court to try and achieve zoning relief via federal construction code preemption, both of which were rejected by the state’s highest court. There was even an attempt at a last-minute amendment to a bill in 2001, by TMHA’s then director, Will Ehrle. Disastrously the amendment did not survive and then the bill mutated into the infamous HB 1869 that devasted the industry.

And then most recently last session in 2023 we worked and advanced a bill all the way through the House but stalled with resistance in the Senate that would have given some level of zoning parity if the home matched surrounding home values.

All of these previous efforts and experience led us to this session and the new strategy we deployed. The concept was to be as aggressive as we could but still be politically possible.

We achieved this by a simple argument, “Cities, you can’t ban manufactured homes entirely.”

That was our north star and the argument we advocated to the state’s lawmakers.

And we finally achieved success when Gov Abbott signed into law SB 785.

Granted the new law is not going to solve all of our zoning woes. Far from it. But it is a critical first step, a toehold, from which to start and build upon as both cities acclimate to our modern homes, we change old negative perceptions, and we demonstrate the critical role we serve in solving the state’s affordable housing challenges.

The bill does two things:

• First, it says that cities can only require a specific use permit for manufactured homes if they also require such a permit for all forms of housing in the same area. This is to address the cities we identified that did not ban manufactured homes outright, but the only way to place a manufactured home was to apply and then be granted a specific use permit, which by definition are temporary in nature.
• Second, the law requires that cities designate some area and actually put that area on their zoning maps (if they have one), where new manufactured homes are allowed “by right.”  

Now cities still maintain their local control to determine exactly where and the size of the by right permissible area for new manufactured homes, but they cannot exclude us entirely.

There are a few limited exceptions that preserve cities’ abilities to have deed restrictions and historical areas. There is also a small exception for very small cities in Texas who do not have any commercial zoning, only one or two residential zoned areas. We have identified about 14 small cities that are excluded from the new law mandates, and therefore could, if they choose, ban manufactured homes.

But for the rest of the 1200+ Texas cities, they will have to comply with the new law. When making sweeping changes that require significant zoning reforms, political feasibility and good faith required that cities have a year to change their zoning to comply. As such the effective date of this law is September 1, 2026.

Of course, that doesn’t mean we can’t go to work with cities today to change their zoning. This is exactly what needs to be done for all the cities, not already in compliance. The effective date is the deadline for those cities, and if they haven’t changed their ordinances to comply by September of the 2026, then the city could be exposed to liability.

SB 785 is the most significant manufactured housing zoning reform bill ever advocated for by TMHA that actually passed. Do we expect some cities to push back? Can we foresee some cities learning of this law and begrudgingly selecting the least desirable or only very small areas to allow manufactured homes? Sure. This is possible, and well within their legal ability to do so. We can also make some educated guesses that for some cities they will just change the zoning for any existing manufactured home communities that were previously nonconforming “grandfathered” uses. They will just draw their “new” by right MH zoning around these existing communities.

But this is a critical and necessary starting point. This new law and the results that come out of it over the next several years will give us more to build upon for future advances. And the most significant and immediate impact of this bill is that it creates the framework to begin a new conversation. With this dialogue with cities we have an opportunity for manufactured homes to come into cities to change the hearts and minds, advance a new positive perception of what actually our modern homes are, and through this open up more and more opportunities based on merit and public acceptance rather than legal mandate (but at least there is now a legal mandate from which to kick everything off).