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Newsweek
13-07-2025
- Business
- Newsweek
Texas Housing Market To Change in September: What To Know
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. Texas lawmakers trying to solve the state's housing affordability crisis passed a bill during the last legislative session that experts say will be a "game-changer" for the development of multifamily homes. Senate Bill 840 or SB 840, which was introduced by Republican state Senator Bryan Hughes and signed into law by Governor Greg Abbott in June, would streamline the process of turning non-residential commercial buildings in the state into mixed-use and multi-family residential ones. Under the new legislation, any land that is already classified as a zone for office, commercial, retail, warehouse or existing mixed uses could be turned into mixed-use residential housing without the need for a zone change. Essentially, the legislation does away with a process that some have complained can be time-consuming and expensive—at least in some cases. The mixed-use housing and office property The Republic is seen undergoing construction downtown on October 9, 2023, in Austin, Texas. The mixed-use housing and office property The Republic is seen undergoing construction downtown on October 9, 2023, in Austin, To Know About The Bill "SB 840 aims to tackle the state's widening housing shortage by allowing underused commercial land and buildings to be repurposed for multifamily development 'by right,'" Fawaz Bham, real estate law expert and partner at Dallas-based law firm Hunton Andrews Kurth, told Newsweek. "More pointedly, it rebalances the power dynamic between developers who are eager to create new mixed-use projects or convert existing commercial properties against the desire of municipalities to closely negotiate, guide, and shape build sites in their cities," he said. The bill applies only to cities with more than 150,000 residents that are in a county with more than 300,000 residents. That means that the legislation will impact less than 20 cities, including the Texas capital, Austin, where proposals to add thousands of units to two sites—almost 900 residential units 200 East Riverside Drive and up to 2,400 in Anderson Square—have already been approved. But SB 840 does more than reforming zoning regulation. It also prohibits certain restrictions on density, building height and parking for multifamily and mixed-use developments. Under the bill, municipalities cannot require more than one parking space per dwelling unit or a multilevel parking structure. They must allow the multifamily density to be the highest allowed in the municipality or 36 units per acre, whichever is greater; and the heights limits must allow the greater of the highest height allowed on the side by the zoning code or 45 feet. "By removing these barriers for the repurposing of these vacant and underutilized properties, the legislature has opened the door to a significant opportunity for developers to meet the ever-growing housing needs in Texas," Clay B. Pulliam, partner at Dallas-based law firm Troutman Pepper Locke, wrote in a recent report assessing the bill. The bill is expected to go into effect on September 1, 2025. Newsweek contacted Hughes for comment by email on July 4 for comment. How The Bill Could Change Texas Real estate experts believe that the bill will spark a "revolution" in the Lone Star State's multifamily market, where it is being hailed as a likely "game-changer." The most significant impact of the new legislation would be to allow developers in the state to utilize vacant or underutilized office buildings—which became a problem for some cities in the state, like Houston, during the pandemic years—retail centers and warehouses for multifamily housing. "There are suburban and infill areas with empty big boxes or underutilized retail and office buildings which have become acquisition targets as developers realize the potential upside of SB 840 and other companion bills that have recently passed," Bham said. Julia Parenteau, Director of Public Policy at Texas Realtors, told Newsweek: "While commercial conversions are a more niche issue, I'd anticipate the allowance of mixed-use and multi-family by right in certain zoning areas will have a positive impact by way of more multi-family housing developments going onto the market in the coming years. "Additionally, zoning by right shaves approximately 18 months off the time frame for development, allowing the conversation to focus on what amenities and designs the municipality wants or needs in the development, not whether the project is feasible." This infusion of new inventory could, in turn, help first-time and lower-income homebuyers in the state, as multi-family homes tend to be more affordable than single-family housing. "SB 840 is part of a broader suite of bills that the legislature passed, all designed to infuse the market with additional supply so that affordability improves for Texans," Emily Brizzolara-Dove, a policy adviser at Texas 2036, a nonprofit, nonpartisan public policy organization dedicated to improving lives and opportunities for all Texans through 2036, told Newsweek. "Home prices in Texas have gone up 35 percent, 40 percent since the beginning of the pandemic, and that is simply unsustainable," she said. "Housing affordability is really one of our biggest competitive advantages in the state, but that is a very tenuous advantage. Ohio has cheap houses, too. "So, if our housing supply gets to the point where families are really cost burdened by their rent and by their mortgage, we are at risk of losing that competitive advantage." SB 840 helps Texas build more housing where people want to live, Brizzolara-Dove said, by essentially reducing red tape. The big impact of the new legislation, she said, is going to be allowing residential in commercial, retail and warehouse zones—areas that are already developed and which would become more livable, more walkable, and more-resident friendly once more homes are introduced at little to no additional cost, as key infrastructure is already in place. "When you can do something that will make a really significant impact on housing prices for Texas families, and you can do it with no fiscal note, then you're in a good spot," Brizzolara-Dove said. 'The Devil Is In The Details' Bham, however, said that whether the legislation would work to fix the Lone Star State's shortage of affordable homes would still depend on how the market reacts to it. By cutting red tape and slashing costs, SB 840 should be able to attract developers willing to pursue new housing projects, but they will still need to ensure that any project is "still economically fruitful, financially viable, and sustainable in the long-run to secure investors, financing, and—ultimately—paying renters," Bham said. Real estate experts also worry that the bill could also have a negative impact on the Texas housing market. While Pulliam says that the bill does "an admirable job of addressing the bottlenecks and administrative burden of converting properties to residential uses," he warned that the legislation might have some unintended consequences. "Zoning ordinances are often cumbersome and sometimes antiquated, but the framework that these ordinances provide gives some degree of certainty to property owners, residents and the municipalities themselves," he said. "For example, no consideration has been given to the impact on public schools when these additional projects result in an influx of students. Will dispensing with the need for traffic studies or traffic mitigation measures create more congestion? Developers who have invested heavily in entitling their multifamily projects must now compete with developers who can skip that entire process. Will owners of existing multifamily or mixed-use projects be at a disadvantage to those who can now bypass barriers to entry quickly and without cost?" he asked. Weston B. Rockers and Benjamin W. McKay of Polsinelli, on the other hand, are concerned about the potential for a sudden surge in converted multifamily to devalue existing multifamily properties and/or saturate the multifamily housing market in some municipalities. "As multifamily supply increases, developers relying on exclusive and/or isolated multifamily zoning classifications will experience less demand," the two wrote in a June report. At the same time, the single-family market could also suffer, they say, as reclassifying commercial sites to multifamily "has the potential to devalue single-family homes, which were planned or developed in close proximity to commercial developments." Brizzolara-Dove remains optimistic about the impact of the bill, even as she admits that "the devil is in the details when it comes to implementing these bills, and there is no state agency oversight of them." It will be "all down" to the municipalities, she said: "We will be able to see in a year from now how the cities have implemented [the legislation], if they are fully embracing the law and if changes would need to be made—and they likely will."
E&E News
27-05-2025
- Business
- E&E News
Trump EPA appointees leapfrog ethics hurdles
EPA's ethics office approved requests to bypass conflict-of-interest procedures for a handful of Trump administration officials. At least five political appointees received limited approvals to waive the 'cooling off' period, which prohibits government officials from interacting with their former employers or clients for one year after the date of last service, according to documents obtained by a Freedom of Information Act request. 'I conclude that the interest of the United States Government in your participation outweighs any concerns about your impartiality,' EPA ethics office Director Justina Fugh wrote in impartiality determinations signed in March. Advertisement Among the officials affected is Nancy Beck, who rejoined the agency's chemicals office as its principal deputy assistant administrator after directing regulatory affairs for the law firm Hunton Andrews Kurth, where her clients included the American Chemistry Council and the U.S. Chamber of Commerce.
Zawya
19-03-2025
- Business
- Zawya
Fintechs and crypto companies seek bank charters for growth
NEW YORK - Financial technology firms and crypto companies are seeking to become state or national banks in a bid to expand their business under the Trump administration that they view as more industry-friendly, according to more than half a dozen industry executives. Firms that had been seeking to expand and gain credibility with customers see an opportunity under U.S. President Donald Trump to get licenses that regulators were previously slow or reluctant to approve. "We have seen a lot more interest. We are working on several applications now," said Alexandra Steinberg Barrage, a partner at law firm Troutman Pepper Locke. "Is it in full swing yet? I don't think so. Our clients are being cautiously optimistic, they're waiting for things to settle," as the administration installs heads of banking agencies. Discussions and preparations for bank charters have increased significantly, according to two other sources who are working on potential applications. It has yet to be seen how many firms will follow through, they said. While an institution needs to deal with more regulatory checks if it becomes a bank, its cost of capital and doing business can go down in certain instances. A license can also give more legitimacy to the business in the eyes of customers and allow it to increase business and market opportunities. This will also allow firms to reduce their borrowing costs by drawing on deposits, another big advantage, said Carleton Goss, partner at law firm Hunton Andrews Kurth who is working on three such applications. New banks will also boost industry competition and cater to specific customer groups or regions, industry sources and analysts said. The Office of the Comptroller of the Currency has granted approval to fintech firm SmartBiz to acquire a Chicago-based community bank, Centrust Bank, which gives it a national bank charter, it said in an announcement Monday. It is the first bank charter approval for a fintech firm since 2021, and industry experts expect this trend to continue. CHANGE IN ADMINISTRATION The surge in activity comes after the number of new bank charters granted by U.S. regulators plunged since the financial crisis, reaching a low of only four applications being approved in 2023, according to S&P Global. "Online companies know that they will be coming under greater regulatory scrutiny," said Goss. "It makes sense for them to get ahead of the curve, and in turn, get more credibility and capital at a lower cost by applying for a charter." Between 2010 and 2023, an average of only five new bank charter applications were approved annually by regulators, compared with 144 a year between 2000 and 2007, Barrage and other regulatory lawyers wrote in a recent open letter that made suggestions about streamlining the process. Approvals sometimes took years and in some cases were withdrawn by the applicants, the letter said. Applications dropped because low interest rates squeezed profits, reducing the appeal of bank status, while burdensome regulations deterred potential applicants. After the collapse of bank-fintech middleman Synapse Financial Technologies last year, regulators have also proposed strengthening rules for banks working with fintechs. There are expectations that Trump will usher in a deregulatory regime which is more pro-growth for businesses which could pave the way for some more bank charters in the current administration. "We haven't seen a flurry of charter applications since the financial crisis period, but we certainly saw more in the first Trump administration," said Nathan Stovall, director of the financial institutions research at S&P Global Market Intelligence. Trump's newly-installed regulators have indicated that they are focused on innovation and technology, sending positive signals to fintechs, Stovall added. The administration "is encouraging regulators to adjust risk appetite and take a more pro-growth line," said Nigel Moden, global banking and capital markets leader at EY. "That could lead to an opening up of the market to some more competition." Earlier, the Federal Deposit Insurance Corporation's (FDIC) acting chair Travis Hill said the agency would encourage more firms to pursue bank charters in the coming months to ensure a healthy pipeline of new entrants in the sector. Federal Reserve Governor Michelle Bowman, who has been nominated by Trump as vice chair for supervision, has emphasized the need for speedier approval for new banks. CHALLENGES Industry experts believe that the high scrutiny on granting bank charters is a necessary step for financial stability, but they believe the turnaround process for these applications could be faster. Typically, between $20 million and $50 million is required to set up a new bank, two legal sources said. Access to capital and complying with anti-money laundering laws and the Bank Secrecy Act are some of the biggest challenges for firms applying for charters. Both sources declined to be identified because the discussions are private. "There are still rigorous licensing processes in place and so time will tell as to how quickly new applications can move through the system," Moden said, adding that charter-related activity was picking up. The U.S. has more than 4,500 banks. With an expected rebound in mergers and acquisitions among regional lenders, that number is expected to shrink even as some new entrants jump in. (Reporting by Nupur Anand in New York, additional reporting by Saeed Azhar, editing by Lananh Nguyen and Nick Zieminski)
Yahoo
18-03-2025
- Business
- Yahoo
Crypto firms are reportedly pushing for National Bank status
According to a Reuters report dated March 18, industry insiders are allegedly saying that crypto firms see this as an opportunity to gain regulatory legitimacy and broaden their markets. Though such applications have historically taken regulatory bodies a long time to approve, legal experts have seen a recent uptick in interest. 'We have seen a lot more interest. We are working on several applications now,' said Alexandra Steinberg Barrage, a partner at the law firm Troutman Pepper Locke, as quoted by Reuters. However, with the administration appointing new banking regulators, Locke said, many firms are feeling cautiously optimistic, even as enthusiasm builds. National bank status would enable crypto firms to lower borrowing costs by accessing deposits, enhancing credibility, and creating new business opportunities. 'It makes sense for them to get ahead of the curve and gain credibility and capital at a lower cost by applying for a charter,' told Carleton Goss, a partner at Hunton Andrews Kurth, to Reuters. The report also said that approvals for bank charters have historically been few and far between, with U.S. regulators granting just four in 2023. For the years between 2010 and 2023, however, the average approvals per year were only five, in stark contrast to the 144 approvals between 2000 and 2007. Thus, obtaining charters will be difficult for the crypto enterprises entering the banking sector. Following the news, many crypto industry netizens are unhappy about this move. One X user, who goes by the username Cedric Beau said, 'Bitcoin doesn't need banks. Any crypto company trying to become a national bank isn't decentralizing; it's integrating into the same system $BTC was built to replace.' Another user named MooseyB17 said, 'NO! The whole point of crypto is to get away from banks." However, many within the crypto community believe this could help in adopting cryptocurrencies, saying, 'Regulatory clarity incoming? This could be a game changer for Bitcoin and crypto adoption.'
