If you regularly read about cities, you might notice that Texas cities rarely seem to come up. We make cases for why Detroit is definitely coming back—just you wait! We come up with elaborate theories of how cities can become the next Silicon Valley. We spend hours coming up with a solution to New York City’s costumed panhandler problem. Yet the four urban behemoths of the Lone Star State—Houston, San Antonio, Dallas, and Austin—remain conspicuously absent from the conversation.

Boy, has that changed.

Earlier this year I wrote a sprawling defense of Houston. Scott Beyer spent the summer writing a series of articles for Forbes profiling the cool things happening in cities across the state. John Ricco recently launched the “Densifying Houston” Twitter feed and discussed the phenomenon on Greater Greater Washington. Just this past weekend, City Journal released an entire special issue dedicated to Texas.

Through all this, many have been surprised to learn that a city like Houston could serve as a model for land-use policy and economic growth for struggling coastal cities. Yet two criticisms regularly seem to come up, at least related to Houston:

“Houston is an unplanned hell-hole! It’s proof that land-use liberalization would be a disaster.” “Houston isn’t unplanned! It’s as heavily planned as any other city, just look at the covenants.”

Since there seems to be a lot of confusion about land-use regulation and planning in Houston, here’s a quick explainer on what Houston does regulate, doesn’t regulate, and how private covenants shape the city.

1. What Houston Doesn’t Do

Houston doesn’t mandate single-use zoning. Unlike every other major U.S. city, Houston doesn’t mandate the separation of residential, commercial, and industrial developments. This means that restaurants, homes, warehouses, and offices are free to mix as the market allows. As many have pointed out, however, market-driven separation of incompatible uses—think strip clubs and preschools—is common in Houston.

Houston doesn’t segregate residential developments. Unlike every other major U.S. city, Houston doesn’t mandate the separation of different housing types. This means that single-family homes, townhouses, and apartments are free to mix. As desirability increases and land values rise, it’s common for single-family homes to be converted into higher density multifamily developments in order to accommodate demand.

Houston doesn’t regulate density. Many U.S. cities tightly restrict the number of units a developer can build per acre. These regulations do not exist in Houston. Outside of complying with space-consuming regulations and certain special urban bonuses related to lot size, Houston doesn’t regulate density.

Houston doesn’t mandate large minimum lot sizes for single-family housing. Houston does enforce a minimum lot size for single-family homes. Unlike Dallas and other Sun Belt cities, however, Houston does not mandate higher minimum lot sizes (e.g. one unit per 10,000 square feet, or one unit per acre).

Houston doesn’t prohibit tiny living. Attracted to the idea of a small living space? Accessory dwelling units are completely legal and common across the city. Micro apartments are also legal—no Seattle-style shenanigans here—and a few micro unit developments are underway. Those tiny homes that D.C. and L.A. are losing their minds over? They’re also permitted and are quickly spreading around the city.

2. What Houston Does Do

Houston does mandate minimum lot sizes for single-family housing. Houston does mandate that lots subdivided for single-family homes be at least 5,000 square feet. Lots must be at least 50 feet wide and 100 feet deep. Minimum lot size restrictions do not apply to multifamily housing, commercial developments, or industrial developments.

These regulations were significantly reduced for urban neighborhoods following reform in 1999, dropping the minimum lot size down to 1,400 square feet and making townhouses feasible. There’s a big catch though: policymakers recently opened up a process whereby neighborhoods can petition for larger minimum lot sizes. It’s worth watching, since this could stymie recent densification and pave the way for tighter development restrictions.

Houston does mandate front setbacks. For single-family homes, the maximum required setback is 25 feet. In many cases— including multifamily housing, commercial and industrial developments, and single-family homes under special circumstances—this required setback falls substantially and in many cases may be zero. Thanks to the city’s small and often non-existent side and rear required setbacks, many single-family homes in Houston lack a backyard—an indication that Americans aren’t so crazy about their beloved yards if given a choice.

Houston does mandate off-street parking. Here’s the doozy: Houston mandates off-street parking for just about every form of development. This is probably the number one regulation holding back the city’s rapid densification and a major reason that car-dependence remains the norm. By requiring developers to build either parking deserts and garages, this policy encourages developers to bypass exciting infill and downtown opportunities in favor of developing in the suburbs where land is cheap.

Houston does mandate wide roads and long blocks. When developers subdivide a greenfield lot, they have to comply with Houston’s street design regulations. Unfortunately for pedestrians, the city regularly requires 50 to 60 feet right-of-ways and 600 feet blocks in neighborhoods. Besides undermining walkability, this also saddles the city with unnecessary infrastructure maintenance costs.

3. What About Private Restrictive Covenants?

Private restrictive covenants are common in Houston. A restrictive covenant is an agreement among property owners regulating how they can and cannot use their property. It might be helpful to think of this as a kind of decentralized zoning: a developer sets up a collection of rules on everything from architecture and design standards, use restrictions, and maintenance requirements. Residents then sign a contract agreeing to abide by these private regulations and contribute to a fund for their enforcement. Many people know about restrictive covenants in residential neighborhoods, but they are also common in industrial parks. In the case of commercial developments, typically a lessor acts as a kind of private regulator.

Is this bad? Private restrictive covenants can certainly be bad. Early covenants typically upheld racial, ethnic, and income segregation before Euclidian zoning came along and effectively did that for residents. But by no means are all private covenants bad. Most covenants today are designed to make sure that communities stay the way residents would like them to stay. In a typical residential neighborhood, this might mean keeping out unwanted businesses or cleaning up litter. In an industrial park, this might mean upholding additional fire and safety standards. In many cases, private covenants also help provide club goods like parks, security guards, and roads.

Houston does enforce private restrictive covenants. Since 1965, the city of Houston has played a role in enforcing these private restrictive covenants. In most cities, if a resident would like to force another resident to end a perceived rule violation, they have to take them to court and foot the bill themselves. Usually covenants set up a fund that would cover this cost, but legal fees can rapidly deplete these funds and the process can be a headache to manage. In Houston, the city comes in and foots the bill for the litigation upon receiving a complaint.

Is this bad? Almost certainly, yes. In a normal city, a neighborhood association or resident would have to pay the full cost of enforcing the covenant. This forces residents to seriously consider whether the rule violation is egregious enough to be worth the cost of a lawsuit. A common result is that over the course of 25 to 50 years, small, unpunished rule violations slowly add up and the covenant withers away. Alternatively, the cost of maintaining the covenant may motivate property owners to explicitly liberalize the restrictions when the renewal vote comes around, permitting new uses like multifamily housing and commercial developments.

The trouble with Houston’s system is that it subsidizes the cost from trivial rule enforcement and incentivizes property owners to report each and every violation to the city. That has two important results: First, since residents don’t have to foot the bill of enforcing minor rules, they’re more likely to implement highly restrictive covenants. Second, since the covenant costs and pain of enforcement are low, property owners will keep restrictive covenants alive well past what might have been their natural expiration date. Make no mistake: private restrictive covenants still phase out all the time. Houston’s subsidies just make that process less common.

4. Key Takeaways

When it comes to land-use regulation, Houston’s greatest sin may be that it’s alone in the middle. At the same time Houston is criticized for not planning enough and planning too much. It won’t surprise Market Urbanism readers to know that I am inclined toward the latter opinion. Houston needlessly forces sprawl with giant “free” roads, mandated parking, and subsidized private restrictive covenants. But that shouldn’t distract us from what Houston gets right. Houston was the only major city to hold a public vote on comprehensive zoning and it was the only major city to turn it down. For decades, folks scoffed at Houston for refusing to implement residential segregation, mixed-use prohibitions, and density restrictions. It turns out that Houston was right all along, and that’s worth talking about.