A new Texas law eliminates municipalities' ability to ban manufactured housing entirely—and it takes effect in 2026.
Most manufactured housing retailers, installers, and dealers operating in Texas don't realize that many municipalities have simply zoned out their entire market. Until now, a city or county could legally prohibit new HUD-code manufactured homes in every residential zone—effectively closing that jurisdiction to the industry.
Senate Bill 785, effective September 1, 2026, changes that. It requires municipalities with zoning authority to designate at least one residential zone where new HUD-code manufactured homes may be installed as-of-right. That means no conditional-use permits, no special exceptions, no discretionary approval process. If a property meets the zone's other requirements, a manufactured home can go there.
For small businesses in the manufactured housing trade, this is a market-access provision. Before SB 785, a retailer, installer, or dealer could be locked out of entire cities or regions through zoning alone. A municipality didn't need to pass a specific rule against manufactured homes—it just had to never create a zone that allowed them. That was legal.
SB 785 closes that loophole. Every Texas municipality with zoning authority must now identify at least one residential zone where new manufactured homes are permitted by right. This doesn't mandate that cities embrace manufactured housing or change their overall zoning strategy. It simply requires that at least one door remain open.
The practical effect: geography that was previously closed to your business becomes available. A city that once had zero zones allowing manufactured homes will have at least one. That expands where you can legally operate, where your customers can legally place homes, and where you can compete.
The requirement is codified in Section 1, amending Section 1201.008(g) of the Texas Occupations Code. It applies to municipalities—cities and counties—that have adopted zoning regulations. The effective date is September 1, 2026, giving municipalities roughly 18 months from now to comply.
The law specifies HUD-code manufactured homes, which are federally regulated under the National Manufactured Housing Construction and Safety Standards Act. This is distinct from other housing types and reflects the specific regulatory framework that governs the industry.
If you operate in multiple Texas jurisdictions, start tracking which municipalities have already designated zones allowing manufactured homes by right—and which have not. When September 1, 2026 arrives, those that haven't complied will be legally required to do so. Understanding your local zoning landscape now will help you identify new service areas and plan accordingly.
If you're considering expansion into a new Texas market, don't assume a municipality's current zoning is permanent. SB 785 guarantees that at least one residential zone will be available to you by 2026.
For a detailed breakdown of how SB 785 affects your specific business model and location, free resources are available through industry associations and local business groups familiar with Texas manufactured housing regulations.