DALLAS — An early proving ground for Texas to tackle the state’s housing affordability problem — and the pushback those efforts often generate — sits at an aging shopping center in North Dallas.

Large stretches of storefronts at Pepper Square sit empty. Signs from a touring Harry Potter exhibition that closed in May still hang from a former Stein Mart where the attraction was housed. Cars pack the parking spaces of a Trader Joe’s and an indoor trampoline park, but wide swaths of the lot sit deserted.

The center’s owner saw an opportunity to revive the flagging retail strip with hundreds of apartments as well as new shops and restaurants. Nearby homeowners saw the threat of a looming high-rise over their neighborhoods.

For years, a group of homeowners waged a pressure campaign to stop the redevelopment. They effectively forced a City Council member to not seek reelection and sued to stop the overhaul after council members gave it the green light.

Now, Pepper Square will become a place for people to live after all. It’s among thousands of new homes moving forward with the help of new state laws passed last year aimed at reining in high prices and rents by easing the state’s housing crunch. Those rules relaxed local zoning regulations on what kinds of housing can be built and where, allowing more homes to be built in more places at a time when Texans have increasingly struggled to afford keeping a roof over their heads.

“The biggest obstacle to more homes for Texas families isn’t the land. It isn’t the money. It is some of the local obstacles protecting the status quo,” said Nicole Nosek, who founded the group Texans for Reasonable Solutions, which pushed the housing bills.

The law that appears to be enabling the most new housing is Senate Bill 840, which allows owners of offices, shopping centers and warehouses to redevelop properties into apartments or mixed-use complexes with residences.

The law has enabled at least 8,400 apartments since it took effect Sept. 1, according to a tally by a bipartisan coalition that supported the bill, including Texans For Reasonable Solutions, American Enterprise Institute and Texas Appleseed. That’s an amount equivalent to about one in five of the multifamily units permitted in Texas since the law took effect, a separate Texas Tribune analysis of building permits shows.

Apartment construction has slowed in Texas and the rest of the country amid a temporary glut of new apartments and higher construction costs. But while multifamily permits fell 10% statewide in the period since the bill passed, those permits have risen in the 19 cities where SB 840 relaxed local zoning restrictions, The Tribune’s analysis of the Texas A&M University’s building permit data found.

“Texas passed this, which was, you know, a tremendous achievement. And it’s already bearing fruit in the first year with positive direction,” said Ed Pinto, co-founder and co-director of the conservative American Enterprise Institute’s Housing Center.

Another law that reduces how much land cities can require single-family homes in new subdivisions to sit on has so far allowed 2,800 homes to proceed in Dallas, Plano and El Paso, the groups’ analysis shows.

One aimed at making it easier for city councils to approve new housing has seen mixed success, according to a Tribune analysis.

The laws, particularly SB 840, face resistance from some homeowners and several North Texas cities that are trying to prevent such projects. Devotion to the single-family home runs deep in the suburbs, where residents often meet new apartments with scorn and local officials fight to keep the authority to shape how their communities grow.

Limiting how many apartments get built means fewer housing opportunities in some of the state’s fastest growing economies — particularly for those who can’t afford to buy often pricey homes in those areas, the bill’s proponents argue.

“They basically say, ‘You can work in our communities. But when the lights go out, we want you heading back across the border,’” said state Rep. Gary Gates, a Houston-area Republican who shepherded the bills.

Lawmakers have signaled that improving the state’s housing affordability will be a further focus next legislative session, with Lt. Gov. Dan Patrick and House Speaker Dustin Burrows, both Republicans, telling legislators to study the issue before they meet next year.

More apartments in more places

The new developments cited by the groups ranged from a 1,000-unit housing complex in southwest Austin to a 14-unit building sandwiched between single-family homes in South Dallas.

Pepper Square is one of them as well. The strip mall’s sorry state is partly what drove owner Henry S. Miller Co. to seek to redevelop with about 2,000 apartments initially proposed.

The Dallas-Fort Worth area is adding more residents than any other region in the country, said Greg Miller, the firm’s president and CEO, and needs to build more housing to meet demand.

“People need a place to live,” Miller said, adding that putting apartments on the property would help maintain a customer base for retail at the site.

Neighborhood groups aggressively fought the plan even as the developer slashed the number of units. The project’s opponents feared increased traffic congestion and lost privacy owing to the project’s height.

Miller said apartments generate fewer car trips than retail and the Pepper Square development won’t even be as tall as an existing 12-story office building across the street.

Opponents sued the city to kill the project after the Dallas council approved it. But after lawmakers passed SB 840, which allows apartments to be built in commercial areas such as Pepper Square without local approval, their lawsuit was moot.

Miller sees the law as further endorsement of his company’s plans for the project, which will include about 1,000 apartments on the site and roughly two acres of park space, Miller said.

“The state and the city, they want growth,” Miller said. “And we’re going to continue to grow.”

Those who fought against the redevelopment are still smarting, though they agree the shopping center needed some kind of makeover.

“It’s a kick in the gut,” said Matt Bach, who headed the Save Pepper Square Neighborhood Association. “They had the state Legislature come in and say, ‘Okay, now we’re just changing the game. The goalposts are being moved back another 50 yards.’ It was very disheartening.”

Other projects not part of the groups’ count include five fourplexes in east Fort Worth, a complex for low-income seniors in Killeen and a 256-unit apartment complex in southwest Arlington, spokespeople for those cities said.

More homes could be in the pipeline for North Texas and elsewhere because of the law.

Tommy Mann, a land use attorney, said he is working on a few dozen projects made possible by the law. Most of them are in Dallas and will have about 250 to 350 units, he said.

City officials have had more than a dozen meetings regarding apartment buildings proposed in places they wouldn’t have been allowed without city approval before SB 840, said Andreea Udrea, Dallas’ deputy director of planning and development.

“There is big interest,” Udrea said.

Some developers across Texas appear to be leveraging the law to extract concessions from city leaders wanting to avoid the maximum density allowed under the law, observers said.

That’s the scenario that played out in Plano when a builder received approval to add more apartments and single-family homes to a project than what city officials had previously allowed.

“Now the community and the city are evaluating options that are very different than they used to be,” Mann said.

The law appears to be aiding the construction of more affordable apartments for households making less than an area’s typical income, the groups’ tally found — about 1,600 units so far.

Lawmakers didn’t require building affordable housing units, which tend to face vehement opposition from neighboring homeowners. However, allowing more market-rate apartments tends to bring down rents, particularly in places such as Austin, where rents have fallen amid an apartment building boom.

“One of our contentions has always been that it would be easier to get more affordable housing on the ground as a result of this bill,” said Brennan Griffin, senior deputy director at Texas Appleseed, a social justice group. “That’s been borne out so far.”

Pinning down exactly how many new homes the law has enabled is tricky.

The bill applies to only the state’s 19 largest cities, and not every city is tracking how much development they’re seeing. The bill also bumped up cities’ height limits for apartment buildings, so developers may be adding a floor to a project they already were allowed to build, a subtle difference that’s hard to track, advocates said.

Pushback to housing laws

A group of cities across the Dallas-Fort Worth region have thrown up stricter building codes, design standards or height requirements aimed at curbing how much housing goes up under the new law.

A new apartment complex built in Irving, for example, must now have eight floors unless the City Council grants the developer an exception. Arlington and Plano adopted similar, though smaller, height thresholds.

Some cities now mandate that apartments provide specific amenities to tenants — requirements critics argue are nothing but ways for cities to skirt the law.

Irving requires apartment buildings to include a workspace for remote workers, a dog park and a gym. Grand Prairie requires apartments built under the bill to put in an Olympic-sized swimming pool.

Kurt Johnson, Grand Prairie deputy mayor pro tem, defended the requirement to Texas House lawmakers last week, arguing that the city is trying to ensure pools built at new complexes enabled by the law are “large enough to accommodate the additional family members” living there.

Kimberly Levinson, vice chair of Austin’s Downtown Commission, told the House Land and Resource Management Committee they shouldn’t take such concerns seriously. The building where she lives in downtown has more than 140 units, she said during the committee’s July 20 meeting, “and all we have is a two-lane lap pool.”

“Somehow or other, we don’t feel the least bit deprived,” Levinson said.

Gates, who chairs the committee, signaled that he would push to force cities to comply with the law when state lawmakers return for work in January.

“It’s clearly designed to thwart what we were trying to do,” Gates said in an interview. “We can come up with a solution that basically stops them from being able to do these kinds of tactics.”

Whether the suburbs find friends in the Legislature, dominated by Republicans who have long pushed to curb the authority of cities and whose leaders have named housing affordability among their top priorities, remains to be seen.

In the meantime, some city leaders expressed a desire to work with state lawmakers.

“We welcome the opportunity to partner with the Legislature through a task force or working group to advance shared housing goals, including increasing supply and affordability, while allowing flexibility for communities to implement solutions that reflect local needs and conditions,” Arlington Mayor Jim Ross told the committee members.

The additional rules enacted by the suburbs haven’t completely halted SB 840 development in his city.

Arlington, Plano and McKinney have each advanced new projects,, representatives for the cities told The Tribune.

Irving spokesperson Raul Garza noted that the city granted exceptions to its additional regulations to a developer on an affordable housing complex but didn’t provide more details. Grand Prairie has not seen any development under the law, city spokesperson Claudia Garibay said. A representative for Frisco did not return a request for comment.

In the meantime, urban areas such as Dallas, Fort Worth and San Antonio seem to be embracing SB 840. In Dallas, city boosters said the law could help them become more competitive with the suburbs when it comes to attracting residents and new companies.

The suburbs will “be sorry they’ve limited access to housing,” said Linda McMahon, executive director of Dallas Economic Development Corporation. “If you don’t have housing availability at various price points, your economy is going to stagnate. That’s a reality.”

Still, SB 840 even faces hurdles in places less resistant to the law.

In El Paso, the law made about a third of the city’s total land area available for building under the law, said Alex Hoffman, the city’s assistant planning director. But about 36% of those lots have private deed restrictions prohibiting apartments, he said.

Projects that aren’t deed restricted still must seek exceptions from local ordinances — such as minimum parking-spot requirements — in order to take full advantage of the law, he said. That gives local residents an opportunity to stop them.

“I’m just anticipating that opposition will likely increase once we start seeing things getting developed under 840,” Hoffman said.

Disclosure: Kimberly Levinson, Linda McMahon, Nicole Nosek, Texas A&M University and Texas Appleseed have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in The Texas Tribune’s journalism. Find a complete list of them here.