How Texas ADU laws and regulations differ by city

An accessory dwelling unit (ADU) is a second, self-contained home on a lot with a primary residence. Common examples include backyard casitas and converted or attached living spaces. It shares land with the main house but functions independently.

Texas cities set their own ADU rules because the Legislature has now failed three times to pass a statewide bill, leaving a fractured regulatory landscape. Dallas may require a neighborhood petition for the same backyard casita Austin permits by right, while San Antonio requires a notarized owner-occupancy affidavit. Before you price a build or model rental income, you need the rules for your specific city, and often for your specific deed.

What is an ADU in Texas?

An accessory dwelling unit is a second, self-contained home on a lot that already has a primary residence, with its own entrance, kitchen, sleeping area, and bathroom. Texas cities recognize several forms:

• Detached casitas and granny flats built in the backyard
• Garage conversions (Denton, for example, permits these as a Residential Alteration)
• Attached units built onto or within the primary home
• Prefab and modular units delivered and set on a foundation

Manufacturers build prefab ADUs off-site and deliver them whole or in sections. Installers then place them on permanent foundations. Buyers should avoid confusing prefab ADUs with park model tiny homes, which are towable, RV-classified units that most Texas cities do not permit as permanent ADUs.

What qualifies varies by city, and the disqualifiers matter as much as the definitions. Houston treats a unit with its own utility meter and address as new construction. Dallas sets a 200 sq ft minimum for a detached unit. Denton requires a separate exterior entrance plus cooking, sleeping, and sanitary facilities, and prohibits selling an ADU separately from the main house unless it's part of a condominium association.

Does Texas have a statewide ADU law?

Texas has no statewide ADU preemption law, and every attempt to pass one has died in the House:

• Senator Bryan Hughes authored SB 1412 (2023). It passed the Senate on April 27, 2023 but failed House reading on May 22, 2023.
• Rep. Justin Holland authored HB 2789 (2023). The House Land and Resource Management Committee reported favorably on it, but it never received a House floor vote.
• Hughes revived the proposal through SB 673 (2025), which passed the Senate on April 10, 2025, reached the House General State Calendar on May 26, 2025, and died without a floor vote when the session ended.

Governor Abbott signed SB 15 and SB 840 on June 20, 2025. He also signed HB 24. None preempts local ADU rules. SB 15 bars cities from requiring residential lots larger than 3,000 sq ft in certain new subdivisions, and HB 24 lowers a council-approval threshold for some zoning decisions.

The backdrop is a local-control and property rights fight. Lawmakers who favor statewide preemption argue that owners' property rights should override city zoning rules that restrict what they can build on their own land. Harvard's Joint Center for Housing Studies counts 14 states that now preempt local limits on ADUs; Texas is not one of them. Unlike California, where state law forces cities to approve ADUs, Texas leaves the decision to each city council. That's why the five metros below read like five different legal systems.

ADU regulations by city

Each city sets its own zoning requirements, size, setback, and occupancy rules, so you must treat every jurisdiction as its own compliance checklist.

Austin ADU rules

Austin's HOME initiative (Phase 1 effective February 5, 2024; Phase 2 effective August 16, 2024, citywide November 16, 2024) folded ADUs into a broader two-unit and three-unit residential framework and made Austin the most permissive major Texas city for backyard housing:

• Rule | Austin standard
• Zoning | Two- and three-unit residential permitted in SF-1, SF-2, and SF-3 districts
• Minimum lot size | 5,750 sq ft for two- and three-unit residential
• Size limit | Under the two-unit standard, one dwelling unit is capped at 1,100 sq ft; site FAR is the greater of 0.55 or 3,200 sq ft
• Setbacks | Front per base district; rear 5 ft when adjacent to an alley or multifamily-zoned lot
• Height | 30 ft, two stories maximum for the second unit
• Parking | None required (Austin eliminated minimum parking citywide in November 2023)
• Owner-occupancy | Not required

HOME Phase 2 also cut the compatibility buffer near single-family homes from 540 feet to 75 feet. In the first year under HOME (February 5, 2024 through February 4, 2025), Austin approved 436 new units from 383 applications.

Houston ADU rules

Houston has no zoning. Development runs through Chapter 42 of the city code, which the city amended through the Livable Places package (Ordinance No. 2023-801, effective November 27, 2023). The amendment raised the detached secondary dwelling unit cap from 900 to 1,500 sq ft:

• Rule | Houston standard
• Zoning | None; one primary unit plus one detached SDU qualifies as single-family residential under Chapter 42 Section 42-6
• Size limit | 1,500 sq ft maximum for a detached SDU
• Setbacks | Building lines must meet deed restrictions; no standalone numeric SDU setbacks published by the city
• Height | No numeric cap in official city SDU materials
• Parking | 0 extra spaces if the SDU is ≤1,000 sq ft and the first unit meets parking; 1 space for 1,001–1,500 sq ft, placed at the side or rear
• Owner-occupancy | Not required by the city

Private deed restrictions control many Houston projects. The city's Livable Places FAQ states: "The City has no authority to override or supersede active, private deed restrictions." A deed restriction banning second units beats the city ordinance every time, and a building permit application requires a Deed Restrictions Declaration form. Lots also need a minimum 33-foot width for direct street access, and alley access is required when the lot abuts an alley.

Dallas ADU rules

Dallas is the outlier. The city generally does not permit ADUs by right. Dallas Development Code Section 51A-4.510 offers two paths. A neighborhood can petition for an ADU Overlay, which requires signatures from more than 50% of property owners in an area of at least 50 single-family structures, organized by a committee of at least 10 owners. Or an individual owner can seek a Board of Adjustment special exception for a $600 filing fee. The Jimtown neighborhood used the overlay route, and the City Council approved it on January 22, 2025.

• Rule | Dallas standard (Section 51A-4.510)
• Approval | ADU Overlay rezoning or Board of Adjustment special exception; no by-right path
• Size limit | Greater of 700 sq ft or 25% of the main structure; 200 sq ft minimum for detached units
• Setbacks | 3 ft side yard if under 15 ft tall and in the rear 30% of the lot; unit may not sit in front of the main structure
• Height | May not exceed the main dwelling; one story maximum
• Parking | One off-street space; Dallas waives the parking requirement within 1,200 ft of a DART bus or transit stop
• Owner-occupancy | When an owner rents either unit, the owner generally must live in the main structure or ADU during the tenancy

The Dallas City Council adopted ForwardDallas 2.0 on September 25, 2024, but the plan doesn't mention ADUs, and Dallas has not adopted a citywide by-right ordinance.

San Antonio ADU rules

San Antonio allows ADUs across its residential districts but pairs that allowance with the strictest occupancy rule of the five cities:

• Rule | San Antonio standard (UDC Sections 35-370, 35-371)
• Zoning | Permitted in R-1 through R-6 and RM-4 through RM-6; one ADU per lot; detached units in the rear yard
• Size limit | 800 sq ft or 50% of the primary structure's gross floor area, up to 1,600 sq ft; 1,200 sq ft in the RE district
• Setbacks | 5 ft from rear and side lines for detached units, reduced to 3 ft with no overhang; attached units follow the primary structure's setbacks
• Height | 25 ft or two stories
• Parking | One dedicated space only for ADUs over 800 sq ft
• Owner-occupancy | Required; the owner must live in the principal unit or the ADU as a permanent residence, backed by a notarized affidavit and recorded covenant

The 2022 amendments (effective January 1, 2023) removed the rezoning requirement and the mandate that ADUs share the main house's electrical, water, and sewer systems. San Antonio then issued 110 ADU permits in 2023 and 2024 combined, up from 80 in the prior two years. The Casita Incentive Pilot Program, which City Council approved August 22, 2025, adds forgivable construction loans of up to $25,000 (Level I) or $35,000 (Level II) for owners who rent to households at or below 80% AMI.

Denton ADU rules

Denton modernized its rules most recently. A January 13, 2026 council action (the "Missing Middle" amendment) extended ADU eligibility to lots with townhomes, duplexes, and triplexes and removed the extra parking requirement:

• Rule | Denton standard (Denton Development Code)
• Zoning | Permitted by right in residential districts RR through R7 and mixed-use districts MN, MD, and MR
• Allowance | One ADU by right per principal dwelling; a second requires a $600 Specific Use Permit
• Size limit | 800 sq ft or 75% of the principal dwelling, whichever is greater
• Setbacks | Detached units in side or rear yards; side-yard units at least 3 ft behind the front building line
• Parking | Denton removed the additional requirement on January 13, 2026
• Ownership and utilities | No independent ownership unless part of a condo association; water and sewer shared with the primary unit

Size, height, setback, and lot requirements explained

Floor area ratio (FAR) is the metric that trips up most first-time builders. FAR divides total buildable floor area by lot area, so Austin's two-unit standard of "the greater of 0.55 or 3,200 sq ft" means a 6,000 sq ft lot supports 3,300 sq ft of total floor area across both units, with the second unit still capped at its own square-footage limit. Other cities skip FAR and cap the ADU directly, either as a flat number or a percentage of the main house.

Height restrictions in the five metros run from Dallas's one-story rule to San Antonio's 25 ft and Austin's 30 ft two-story allowances. Across these cities, setbacks follow a pattern: roughly 5 feet at the rear and side for detached units, dropping to 3 feet in San Antonio when the structure has no roof overhang. San Antonio requires detached units in the rear yard, while Denton and Dallas require them behind the front building line.

Detached and attached units follow different rulebooks. San Antonio holds attached ADUs to the primary structure's full setbacks while giving detached units the reduced 5-foot standard. Houston's 1,500 sq ft allowance applies only to detached units; an attached second unit isn't the configuration Chapter 42 defines. Lot minimums matter too: Austin requires 5,750 sq ft for two-unit residential, and Houston requires 33 feet of lot width for street access. Measure your lot before you sketch anything.

The ADU permitting process in Texas step by step

The permitting process follows a similar sequence across cities even though the standards differ:

1. Verify zoning and private restrictions. Confirm your zoning district allows an ADU (or, in Dallas, whether an overlay covers your neighborhood), then pull your deed restrictions and any HOA covenants. In Houston this step is the whole ballgame.
2. Submit your application through the city portal. Houston routes through the Houston Permitting Center and requires a Deed Restrictions Declaration form. Dallas uses DallasNow for utility applications. Denton, Austin, and San Antonio each run their own development services portals.
3. Complete plan review. Cities check the site plan against setbacks, height, FAR, and building code. San Antonio splits this into a plan-review fee first and separate permit fees at approval. The International Residential Code (IRC) governs habitability requirements for single-family and accessory structures, including framing and egress, and clearing that review is a non-negotiable step.
4. Pass inspections during construction. Cities conduct building and electrical inspections, along with plumbing and mechanical inspections, at framing and rough-in and during final completion. You must pay all Austin Water tap fees before Austin issues a building permit.
5. Receive any required Certificate of Occupancy. Austin requires this document before it will issue an ADU a short-term rental license.

No Texas city publishes a fixed end-to-end ADU timeline, but published utility timelines indicate the likely range. Austin Water completes residential meter inspections within about 10 business days once you pay the fees. Dallas water meter delivery can take up to 8 weeks. CPS Energy in San Antonio runs roughly 20 business days for residential design and schedules installation within 15 business days after you pass a site-ready inspection. Historic district review adds a month or more per cycle, since Austin's Historic Landmark Commission meets monthly.

HOA rules, deed restrictions, and historic districts

City approval may not be sufficient. In Houston, private deed restrictions and HOA rules can prohibit an ADU that the city would otherwise permit. Houston's Livable Places amendments expressly condition the expanded SDU rules on deed restrictions that don't prohibit construction.

Before committing money, complete four checks:

• Review your recorded deed restrictions, available through the county clerk
• Read your HOA's covenants, conditions, and restrictions, plus any architectural review requirements
• Check whether your parcel has a local historic designation
• Check whether your neighborhood sits within a local historic district

Austin and San Antonio preservation authorities require a formal review step in local historic districts. In Austin, a new outbuilding under 600 sq ft may qualify for administrative staff approval within 5 business days, but anything larger or taller than one story goes to the full Historic Landmark Commission. One documented Austin case took 11 meetings over two years to win approval for a backyard ADU. San Antonio requires a Certificate of Appropriateness before permitting a casita in any historic district; residential COA applications carry no fee, but starting work without one triggers a Stop Work Order and a $500 post-work application fee. San Antonio's answer to the delay problem is the "Maricela," a permit-ready 375 sq ft casita plan that clears historic districts through administrative approval alone.

National Register listing, by itself, imposes no design review on private owners. The local designation controls your project.

Owner-occupancy and short-term rental rules for ADUs

Whether you can rent your ADU on Airbnb or VRBO depends entirely on which city the lot sits in:

• City | STR license | New application fee | ADU as STR? | Owner on site?
• Austin | Required (effective Oct. 1, 2025) | $836.30 for a 2-year license ($385.30 renewal) | Yes, when the owner obtains a license and stays within the 2-STR-per-site cap | No
• Houston | Required (effective Jan. 1, 2026) | $275/year plus a CPI-indexed admin fee ($33.10 in 2025) | Yes; no ADU-specific restriction | No
• Dallas | A court has enjoined the ordinances since Dec. 6, 2023; Dallas cannot currently enforce them | $248/year (enjoined) | Unclear while the injunction holds | Overlay code requires the owner on site during a rental tenancy
• San Antonio | Required | $300 (Type 1) or $450 (Type 2) for a 3-year permit | Type 1 (owner-occupied) only | Yes, for ADU STRs

San Antonio's ordinance is explicit: "Type 2 (non-owner occupied) STR's may not operate in ADUs. These are violations of both the ADU ordinance and STR ordinance." If your plan is a remotely managed Airbnb casita, San Antonio is off the table.

Austin moved the opposite direction. Its 2025 ordinances removed the prior bar on STR use for secondary apartments built after October 1, 2015, and an ADU can now hold an STR license with a Certificate of Occupancy. Enforcement is active: the city began seeking platform delisting of unlicensed properties on July 1, 2026, identified 2,785 unlicensed properties since January 2026, and fines hosts and platforms $500 per day.

Dallas remains in legal limbo. The Fifth District Court of Appeals affirmed the injunction against both 2023 STR ordinances in a revised July 18, 2025 opinion, the city petitioned the Texas Supreme Court in October 2025, and as of August 14, 2026 the matter was still in briefing. Investors should price in the possibility that enforcement resumes.

Utility connections, impact fees, and design standards

Utility strategy differs sharply by city, and it can swing your budget by five figures.

Austin charges combined water and wastewater capital recovery fees of $7,700 per service unit for plats after October 1, 2023, plus meter, tap, and inspection fees (a 5/8" meter runs $111.30, with a $195.34 tap fee and $105.27 inspection fee). A 2021 city policy document estimated that using a new tap and meter instead of submetering adds $20,000 to $30,000 to ADU construction costs. Austin Energy requires a separate Electric Service Planning Application for every metered address ($200 per review), with residential 200A service running $400 overhead or $800 underground. Austin charges no street impact fee when an ADU joins a lot with an existing structure.

San Antonio lets you choose a separate meter or a shared one. SAWS impact fees effective July 1, 2024 vary by category and location:

• SAWS fee category | Amount per EDU
• Water supply | $2,592
• Water delivery flow | $1,368
• System development by elevation zone | $1,510–$2,027
• Wastewater collection by basin | $768–$4,436

SAWS can waive impact fees for affordable housing ADUs rented to households at or below 80% AMI, part of San Antonio's broader affordable housing push.

Houston permitting officials classify a separately metered unit as new construction. Official guidance states the accessory living space "does not require a separate address, meter, or utilities." Houston collects water and wastewater impact fees of $2,553.11 and $1,830.24 per service unit respectively, with a $34.50 sewer tap permit.

Dallas requires a bonded contractor for all water and wastewater installations, with meter delivery taking up to 8 weeks; Dallas does not publish current tap fee amounts. Denton requires shared water and sewer with the primary unit. Denton's wastewater fees start at $4,716 for property platted between January 29, 2019 and May 31, 2026 and jump to $8,711.25 to $13,437.00 by basin for later plats, plus a roadway impact fee of $398.40 per service unit.

Design standards are lightest outside historic districts. Inside them, San Antonio requires new accessory structures to be visually subordinate to the main house and no larger than 40% of its footprint, while Austin requires new structures to be compatible with, and distinguishable from, the historic building, weighing scale and massing over style.

How much does it cost to build an ADU in Texas?

BuildMatch's 2026 estimates put statewide detached new construction at $180 to $340 per sq ft all-in, with Austin specifically at $240 to $420 per sq ft. City-level all-in estimates for detached units:

• City | Detached ADU total | Garage conversion | Prefab/modular
• Austin | $125,000–$250,000 | $60,000–$140,000 | $85,000–$200,000
• Houston | $120,000–$240,000 | $50,000–$130,000 | $80,000–$190,000
• Dallas | $115,000–$230,000 | $55,000–$135,000 | $80,000–$185,000
• San Antonio | $110,000–$220,000 | $50,000–$130,000 | $75,000–$170,000

Attached ADUs run cheaper per foot; Austin estimates sit at $150 to $220 per sq ft. On prefab, read the fine print: advertised unit prices typically exclude foundation, utility hookups, delivery, and installation, and true all-in prefab costs run 20% to 40% higher than the sticker. Austin prefab projects land around $120,000 to $250,000 delivered on a 4-to-6-month timeline, though Austin builder Elbow Room has offered small units with a bathroom and kitchenette for $103,000, according to Texas Monthly.

Permit fees add a smaller but real line item:

• Austin publishes no fixed ADU fee; the FY 2026 illustrative benchmark for a 1,800 sq ft single-unit project totals $2,855.11 in Development Services fees ($1,726.94 plan review plus $1,128.17 permitting).
• Houston uses a formula: $91.06 minimum permit fee, a $33.56 administrative fee, and a plan review fee of 25% of the estimated building permit fee, with square-footage tiers on top.
• Dallas has no confirmed current ADU permit total; use the city's official Fee Estimate Worksheet.
• San Antonio charges a plan-review fee first and permit fees at approval, and may waive city development fees for ADUs rented to households at or below 80% AMI.
• Denton charges $0.89 per sq ft for the building permit plus a $141 flat plan review fee.

Impact and utility fees from the previous section stack on top of everything here.

Is building an ADU in Texas worth it?

Asking rents have fallen in Austin and San Antonio, while Houston has moved in the other direction. Zillow's September 2025 report found that Austin multifamily asking rents fell 4.7% year over year, the fastest decline among major metros, and Apartment List reported that San Antonio's median rent dropped 5.0% year over year to $1,122 as of August 2026. The Kinder Institute reported a 9% median-rent increase in Houston over one year. Census-based median gross rents give you a baseline: roughly $1,729 in Austin city, $1,614 across the DFW metro, and $1,430 in the Houston metro.

On resale, the honest answer is that Texas-specific causal data is thin. In the Austin metro, listings with ADU-related keywords carried a median list price of $775,000, 55% above standard listings, according to Realtor.com's 2026 report, but that compares listing categories rather than measuring value added by building. The best causal estimate comes from a 2024 peer-reviewed study in Real Estate Economics, which found ADU presence raised Los Angeles parcel values and sale prices by 7% to 9%. In Zillow's 2025 buyer survey, 55% of prospective buyers said they were more likely to buy a property with an existing ADU, up from 46%.

Two tax effects hit immediately. Under Texas Tax Code Sec. 23.23, a new ADU is a "new improvement," and the appraisal district adds its full market value outside the 10% homestead cap. The cap applies to the pre-existing home's value; the appraisal district adds the ADU's full market value. Under Sec. 11.13(k), renting the ADU can strip the homestead exemption from the rented portion, though not from the whole property. Texas Attorney General Opinion JC-0415 confirms the rented part loses the exemption; how each county appraisal district allocates that value varies.

Financing carries a Texas-specific constraint. For a Texas homestead, the state caps home equity loans and HELOCs at 80% combined loan-to-value. It also limits origination fees to 2%. A 12-day waiting period applies before closing.

• Product or program | Rate or limit | Eligible ADU use or key condition
• HELOC | 7.31% national average as of August 2026 | Subject to Texas's 80% combined loan-to-value cap on a homestead
• 10-year home equity loan | 8.26% national average as of August 2026 | Subject to the same Texas homestead constraints
• Construction loan | Roughly 8.34% as of August 2026 | Project terms vary by lender
• Fannie Mae construction-to-permanent loan | No rate or limit available | Permits financing for a new home with an ADU
• FHA Limited 203(k) | Up to $75,000 in rehabilitation costs | Includes adding an attached ADU
• HomeStyle Renovation and Freddie Mac CHOICERenovation | Renovation costs capped at 75% of as-completed value | Both allow ADU construction

San Antonio's Casita pilot adds forgivable loans; Austin's proposed ADU financing pilot remains unfunded.

How Steadily insures Texas ADUs

Once a tenant or Airbnb guest moves into your casita, your homeowners policy may no longer match the risk under its terms. Homeowners forms generally assume owner occupancy; a rented ADU creates landlord exposures, including liability for tenant injuries and lost rental income after a covered loss, that a standard policy may not cover.

Steadily writes ADU insurance explicitly in all 50 states. It also covers single-family rentals and multifamily properties, along with short-term rentals. Steadily offers DP1 through DP3 forms, with DP3 providing open-peril coverage, liability options from $100K to $1M+, and loss of rental income up to 12 months of fair rental value. That last coverage matters for an ADU owner: if a hail-damaged roof knocks your unit offline for six months, the policy pays covered repairs and replaces the lost rent during the shutdown. For city-specific pricing context and coverage details, see landlord insurance in Texas.

When you request a quote, Steadily auto-populates construction data from public records. You can bind a policy online and activate coverage within minutes, including on the day the city issues the Certificate of Occupancy. Get a quote in minutes at quote.steadily.com. You don't need to call.

FAQ

These answers summarize statewide status, city size limits, permitting, owner-occupancy rules, and short-term rental requirements.

Does Texas have a statewide ADU law?

The most recent attempt, SB 673, passed the Texas Senate in April 2025 but died without a House floor vote, following the same fate as 2023's SB 1412 and HB 2789. Every ADU rule in Texas comes from city ordinances and applicable private deed restrictions.

Which Texas cities make it easiest to build an ADU?

Austin's zoning requirements permit ADUs by right in SF-1 through SF-3 with no parking or owner-occupancy requirements. Houston allows one detached secondary unit citywide, subject to deed restrictions. Denton allows one per dwelling by right. San Antonio permits ADUs broadly but requires the owner to live on the property. Dallas requires either a neighborhood-petitioned overlay or a Board of Adjustment special exception.

How big can a Texas ADU be?

It depends on the city: under Austin's two-unit standard, one dwelling unit may not exceed 1,100 sq ft; Houston allows 1,500 sq ft; Dallas allows the greater of 700 sq ft or 25% of the main house; San Antonio allows up to 1,600 sq ft at 50% of the primary structure; and Denton allows the greater of 800 sq ft or 75% of the principal dwelling.

How long does ADU permitting take?

No city publishes a fixed timeline. Plan around the known clocks: up to 8 weeks for a Dallas water meter, about 10 business days for an Austin water meter inspection, and a month or more per review cycle if you're in a historic district. Prefab projects in Austin typically run 4 to 6 months end to end.

Can an HOA block my ADU?

In Houston, yes. Active private deed restrictions and HOA covenants can override the city's allowance, and Houston requires a signed deed restriction declaration as part of the permit application. In other cities, review your governing documents before committing to a project.

Do I have to live on the property to rent out my ADU?

In San Antonio, yes: the owner must occupy either the main house or the ADU and record a covenant to that effect. Dallas requires the owner on site during a rental tenancy under its overlay code. Austin, Houston, and Denton impose no owner-occupancy requirement.

Do I need a license to list my ADU on Airbnb?

Austin ($836.30 for a two-year license), Houston ($275 per year), and San Antonio ($300 Type 1, three-year permit) all require STR licenses, and San Antonio limits ADU short-term rentals to owner-occupied Type 1 permits. A court has enjoined Dallas's STR ordinances, so Dallas cannot currently enforce them, and a Texas Supreme Court petition remains pending.