BILL ANALYSIS Senate Research Center S.B. 2354 89R4396 SCL-D By: Creighton Local Government 4/22/2025 As Filed AUTHOR'S / SPONSOR'S STATEMENT OF INTENT Texas' median home price has dropped during the last year from $349,900 to $331,000 thanks to pandemic and economic pressures; however, houses should be priced below $300,000 to be considered "affordable." Comparing the salary required to buy a median priced home ($115,973) with the median household income ($67,404) in Texas clearly illustrates the conundrum: housing is generally unaffordable, even for Texas workers. Every hitch and delay in the development process, from reviews to supply chain to available labor to financing to inspections, adds to the final cost of housing. Every six-month slowdown adds roughly five to six percent to the cost, and every $1,000 increase in the cost knocks 22,000 households out of the buyers' market. S.B. 2354 will improve building times and reduce housing costs by requiring cities and counties to accept certified, independent third-party reviews and inspections by licensed, qualified professionals. Some cities, such as El Paso, exclusively use third-party reviews and inspections, negating the necessity of trying to time hiring with building booms and droughts while allowing economic development to continue unabated. Sovereign immunity is not limited, municipal revenue is not adversely impacted (only "additional" fees may not be collected ensuring municipalities will not lose permitting or other regular inspection fees), and completed projects hit tax rolls faster. Currently, developers have a 30-day shot clock to have cities approve building permits and applications and the passage of H.B. 14 88R (Rep. Harris) added an additional 15-day grace period before developers could reach out to a third party reviewer. Due to cities finding loopholes in H.B. 14, S.B. 2354 would get rid of the shot clock all together, allowing developers to hire third-party reviewers at the very beginning of the development process. As proposed, S.B. 2354 amends current law relating to the authority of certain persons to obtain third-party review of plats and property development plans, permits, and similar documents, and the inspection of an improvement related to such a document. RULEMAKING AUTHORITY This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 247.002, Local Government Code, as added by Chapter 654 (H.B. 14), Acts of the 88th Legislature, Regular Session, 2023, as follows: Sec. 247.002. New heading: OPTION FOR THIRD-PARTY REVIEW OR INSPECTION. (a) Authorizes an applicant for any required review of a development document, notwithstanding any other law, to obtain review of the document from certain persons. Deletes existing text providing that, if a regulatory authority does not approve, conditionally approve, or disapprove a development document by the 15th day after the date prescribed by a provision of this code for the approval, conditional approval, or disapproval of the document, any required review of the document is authorized to be performed by certain persons. (b) Authorizes an owner of land or an improvement to the land that requires a development inspection, notwithstanding any other law, to obtain the inspection from certain persons. Deletes existing text providing that, if a regulatory authority does not conduct a required development inspection by the 15th day after the date prescribed by a provision of this code for conducting the inspection, the inspection is authorized to be conducted by certain persons. SECTION 2. Amends Section 247.004(a), Local Government Code, as added by Chapter 654 (H.B. 14), Acts of the 88th Legislature, Regular Session, 2023, as follows: (a) Requires a person who reviews a development document or conducts a development inspection under Section 247.002 to perform certain actions, including reviewing the document, conducting the inspection, and taking all other related actions in accordance with all applicable provisions of law as if the person is the regulatory authority. SECTION 3. Amends Section 247.005, Local Government Code, as added by Chapter 654 (H.B. 14), Acts of the 88th Legislature, Regular Session, 2023, as follows: Sec. 247.005. New heading: WAIVER AND ADDITIONAL APPROVAL PROHIBITED. Prohibits a regulatory authority from requesting or requiring an applicant to waive the applicant's right to obtain third-party review under Section 247.002 or a deadline or other procedure under this chapter, or obtain the regulatory authority's approval for a development document or development inspection that a third-party reviewer has approved. Makes nonsubstantive changes. SECTION 4. Provides that Chapter 247 (Regulation of Energy Sources and Engines), Local Government Code, as amended by this Act, applies only to a development document or a request for a development inspection, as those terms are defined by Section 247.001 (Definitions) of that chapter, that was not final on the effective date of this Act. Provides that a development document or request for a development inspection that was final before the effective date of this Act is governed by the law applicable to the document or inspection immediately before the effective date of this Act, and that law is continued in effect for that purpose. SECTION 5. Effective date: upon passage or September 1, 2025.
BILL ANALYSIS
Senate Research Center S.B. 2354
89R4396 SCL-D By: Creighton
Local Government
4/22/2025
As Filed
Senate Research Center
S.B. 2354
89R4396 SCL-D
By: Creighton
Local Government
4/22/2025
As Filed
AUTHOR'S / SPONSOR'S STATEMENT OF INTENT
Texas' median home price has dropped during the last year from $349,900 to $331,000 thanks to pandemic and economic pressures; however, houses should be priced below $300,000 to be considered "affordable." Comparing the salary required to buy a median priced home ($115,973) with the median household income ($67,404) in Texas clearly illustrates the conundrum: housing is generally unaffordable, even for Texas workers.
Every hitch and delay in the development process, from reviews to supply chain to available labor to financing to inspections, adds to the final cost of housing. Every six-month slowdown adds roughly five to six percent to the cost, and every $1,000 increase in the cost knocks 22,000 households out of the buyers' market.
S.B. 2354 will improve building times and reduce housing costs by requiring cities and counties to accept certified, independent third-party reviews and inspections by licensed, qualified professionals. Some cities, such as El Paso, exclusively use third-party reviews and inspections, negating the necessity of trying to time hiring with building booms and droughts while allowing economic development to continue unabated. Sovereign immunity is not limited, municipal revenue is not adversely impacted (only "additional" fees may not be collected ensuring municipalities will not lose permitting or other regular inspection fees), and completed projects hit tax rolls faster.
Currently, developers have a 30-day shot clock to have cities approve building permits and applications and the passage of H.B. 14 88R (Rep. Harris) added an additional 15-day grace period before developers could reach out to a third party reviewer. Due to cities finding loopholes in H.B. 14, S.B. 2354 would get rid of the shot clock all together, allowing developers to hire third-party reviewers at the very beginning of the development process.
As proposed, S.B. 2354 amends current law relating to the authority of certain persons to obtain third-party review of plats and property development plans, permits, and similar documents, and the inspection of an improvement related to such a document.
RULEMAKING AUTHORITY
This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 247.002, Local Government Code, as added by Chapter 654 (H.B. 14), Acts of the 88th Legislature, Regular Session, 2023, as follows:
Sec. 247.002. New heading: OPTION FOR THIRD-PARTY REVIEW OR INSPECTION. (a) Authorizes an applicant for any required review of a development document, notwithstanding any other law, to obtain review of the document from certain persons. Deletes existing text providing that, if a regulatory authority does not approve, conditionally approve, or disapprove a development document by the 15th day after the date prescribed by a provision of this code for the approval, conditional approval, or disapproval of the document, any required review of the document is authorized to be performed by certain persons.
(b) Authorizes an owner of land or an improvement to the land that requires a development inspection, notwithstanding any other law, to obtain the inspection from certain persons. Deletes existing text providing that, if a regulatory authority does not conduct a required development inspection by the 15th day after the date prescribed by a provision of this code for conducting the inspection, the inspection is authorized to be conducted by certain persons.
SECTION 2. Amends Section 247.004(a), Local Government Code, as added by Chapter 654 (H.B. 14), Acts of the 88th Legislature, Regular Session, 2023, as follows:
(a) Requires a person who reviews a development document or conducts a development inspection under Section 247.002 to perform certain actions, including reviewing the document, conducting the inspection, and taking all other related actions in accordance with all applicable provisions of law as if the person is the regulatory authority.
SECTION 3. Amends Section 247.005, Local Government Code, as added by Chapter 654 (H.B. 14), Acts of the 88th Legislature, Regular Session, 2023, as follows:
Sec. 247.005. New heading: WAIVER AND ADDITIONAL APPROVAL PROHIBITED. Prohibits a regulatory authority from requesting or requiring an applicant to waive the applicant's right to obtain third-party review under Section 247.002 or a deadline or other procedure under this chapter, or obtain the regulatory authority's approval for a development document or development inspection that a third-party reviewer has approved. Makes nonsubstantive changes.
SECTION 4. Provides that Chapter 247 (Regulation of Energy Sources and Engines), Local Government Code, as amended by this Act, applies only to a development document or a request for a development inspection, as those terms are defined by Section 247.001 (Definitions) of that chapter, that was not final on the effective date of this Act. Provides that a development document or request for a development inspection that was final before the effective date of this Act is governed by the law applicable to the document or inspection immediately before the effective date of this Act, and that law is continued in effect for that purpose.
SECTION 5. Effective date: upon passage or September 1, 2025.