Relating to the authority of a municipality to regulate a home-based business.

Fewer city barriers for home businesses

Texas cities cannot ban no-impact home businesses or require operators or property owners to get operating licenses, permits, or approvals. Home businesses cover owners or tenants making, providing, or selling lawful goods or providing lawful services from residential property. To qualify as no-impact, employees and customers on the property must stay within the city’s occupancy limit at all times. The business must cause no on-street parking or substantial increase in area traffic. Activities must stay out of street view, without substantial increases in area noise or violations of city noise rules. Cities cannot require any home business to rezone its property for nonresidential use. They also cannot require business-related fire sprinklers in detached single-family homes or residential buildings with no more than two units. Cities retain authority to enforce other applicable laws, including fire, building, health, traffic, waste, pollution, and noise rules. They can require businesses to remain compatible with, and secondary to, the home’s residential use. Cities can still limit or ban businesses selling alcohol or illegal drugs, structured sober living homes, and sexually oriented businesses. Private agreements and homeowners’ association restrictions remain enforceable, and cities can still regulate short-term rentals. The effective-date rule sets September 1, 2025, unless two-thirds approval in each legislative house triggered immediate effect.