As Houston’s economy, population and national reputation as a tourist and business destination have grown, so has its tawdry night life. The city is home to one of the largest concentrations of strip clubs in America, with more than 100 believed to be operating at varying levels of legality. One lawyer for the city said a primary source of criminal activity was not the 16 clubs, but smaller “rogue clubs” that have an anything-goes atmosphere and have exploited and prostituted girls as young as 11 and 12.

Both critics and supporters agree it is a booming industry. Liquor, beer and wine sales at the 16 clubs totaled nearly $25 million in 2012, including $4.1 million at one club alone: Treasures, a two-story venue that claims to be the biggest strip club in Texas and offers a free buffet and a shoeshine stand.

The 1997 ordinance, known as the Sexually Oriented Business Law, regulated the clubs at a micro level. In addition to banning topless lap dances — strippers had to stay three feet from a customer while performing — the law required clubs to maintain sufficient lighting “of not less than one footcandle as measured at four feet above floor level,” an effort to prevent clubs from using the darkness to conceal illegal activity. It also prohibited a dancer from touching a patron “while engaging in entertainment.”

The clubs — or rather, their lawyers — found a way around many of the restrictions. Because the dancers covered their breasts with pasties or liquid latex, the clubs maintained they were not sexually oriented businesses and therefore not subject to the ordinance.

The settlement allowed the 16 clubs to offer topless lap dancing once again, although the clubs agreed to the lighting requirement contained in the 1997 law. And the deal permitted touching, making the claim that any that occurs during a lap dance “may be presumed to be without intent to arouse or gratify the sexual desire of any person.”

But complicating matters, the 1997 law remains in effect for the rest of the clubs in Houston.

Houston’s city attorney, David M. Feldman, who led the negotiations for the city, said the settlement does not give the 16 clubs a pass. Undercover vice-squad officers will continue to investigate the clubs, and the owners must now report to the city any acts of prostitution, drug offenses and other crimes that take place at their venues.

“Through this agreement, they’re effectively opening their doors to the Houston Police Department,” Mr. Feldman said. “You better not have anything to hide in order to do this.”