Will Texas's New SB15 Small-Lot Law Actually Bring More Starter Homes Under $500K to McKinney?

Will Texas's new SB15 small-lot law actually bring more starter homes under $500K to McKinney, or is that just for big builders and investors? SB15 could lower land costs enough for McKinney builders to deliver more starter homes under $500K, but how much buyers actually benefit depends on how quickly the city adopts it and who builds first.

If you've been priced out of McKinney's entry-level market over the last couple of years, you've probably noticed the pattern: new construction keeps skewing toward 2,800-square-foot homes on 7,000-square-foot lots, priced well north of $500K, even in areas that used to be considered affordable. SB15, which allows Texas cities to approve residential lots as small as 1,400 square feet in new subdivisions, is supposed to change that math by letting builders fit more homes onto the same acreage. Smaller lots mean lower land cost per home, which in theory means lower prices for buyers.

But a state law creating an option isn't the same as a city requiring it, and it's not the same as builders choosing to pass savings along instead of pocketing the margin. McKinney and the rest of Collin County still have to decide how and where to apply SB15, and the first wave of small-lot product is more likely to show up as investment-friendly build-to-rent communities than as owner-occupied starter homes. Here's what the law actually says, what's realistic for McKinney buyers in the next couple of years, and where you're more likely to find genuine starter-home pricing in the meantime.

What SB15 Actually Does

SB15 gives Texas cities the authority to approve new residential subdivisions with lots as small as 1,400 square feet, well below the 5,000- to 7,500-square-foot minimums that have been standard in most McKinney subdivisions for years. The law doesn't force any city to rezone existing neighborhoods, and it doesn't touch lots that are already platted. It applies going forward, to new development on raw land.

That distinction matters. SB15 isn't going to shrink the lots in Stonebridge Ranch or Craig Ranch. It's aimed at land that hasn't been developed yet, mostly on the edges of McKinney and in the faster-growing parts of Collin County where builders are still assembling large tracts.

Why Smaller Lots Could Mean Lower Prices

Land cost is one of the biggest line items in a new home's price, especially in a market like McKinney where raw land values have climbed steadily. Fitting more homes onto an acre lowers the land cost allocated to each individual house, which is the main lever SB15 is designed to pull.

In theory, that math should translate into starter homes that can clear construction and land costs at a lower price point than today's typical new build. In practice, builders also price to what the market will bear, not strictly to their cost basis, so a lower land cost doesn't automatically mean a lower sale price if demand stays strong.

The Builder and Investor Question

This is the part worth being honest about. Small-lot zoning is genuinely attractive to large production builders and institutional investors building for rent, because it maximizes density and return on a given piece of land. Those buyers can move fast once a city approves small-lot entitlements, often faster than a smaller local builder can.

That doesn't mean owner-occupant buyers are shut out, but it does mean the earliest small-lot communities in McKinney and surrounding Collin County towns may lean toward build-to-rent or investor-marketed product before they lean toward traditional for-sale starter homes. Watch who's actually selling the finished homes, not just who's pulling the permits.

Will McKinney Move Quickly on This?

Local adoption is the real variable. McKinney's planning and zoning process still determines where small-lot development gets approved, and city staff and council will weigh infrastructure, schools capacity, and neighborhood context before green-lighting small-lot subdivisions at scale.

Expect the first approvals to show up in newer growth corridors rather than in established, built-out parts of the city. If you're watching for this shift, keep an eye on areas north and east of McKinney's current footprint, where large undeveloped tracts still exist and builders are actively negotiating land deals.

What This Means If You're House-Hunting Under $500K Right Now

If you need a home under $500K today, SB15 isn't going to solve that this year. Any small-lot communities that get approved still need to go through platting, site work, and construction, which realistically puts delivered inventory a year or more out.

In the meantime, your better options for staying under $500K in Collin County look similar to what they've been:

• Resale homes on smaller existing lots in older sections of McKinney
• Builder inventory and model homes, where discounts can bring a new build back under $500K - see our breakdown on buying a builder's model or inventory home in McKinney
• Looking just outside city limits, where land costs and zoning are looser - we cover that tradeoff in barndominium and modular builds outside McKinney city limits

SB15 is worth tracking, but it's a medium-term supply story, not an immediate fix for this spring's or this year's budget.

The Bigger Picture for Collin County

Even if McKinney moves deliberately, surrounding Collin County cities may adopt small-lot zoning faster or slower depending on local politics and available land. That means the first wave of genuinely affordable new construction tied to SB15 might land in a neighboring town before it lands inside McKinney proper.

If price point matters more to you than being inside McKinney's exact city limits, it's worth widening your search radius across Collin County rather than waiting on one city's timeline.

FAQ

Does SB15 apply to existing McKinney neighborhoods?

No. SB15 only applies to new subdivisions built on undeveloped land going forward. It doesn't change lot sizes or zoning in existing neighborhoods like Stonebridge Ranch or Craig Ranch.

When will small-lot starter homes actually be available in McKinney?

It depends on how quickly the city approves small-lot subdivisions and how fast builders move through platting and construction. Realistically, expect any meaningful inventory to be a year or more away.

Will small-lot homes be for sale or for rent?

Both are likely. Small-lot zoning is attractive to build-to-rent investors as well as traditional for-sale builders, so it's worth checking a community's marketing before assuming it's owner-occupant housing.

Want to be first in line when small-lot starter homes start hitting Collin County? Get on the list for new small-lot starter-home releases in Collin County before they hit the MLS. Reach out to Jane Clark with Keller Williams McKinney to get ahead of the next wave of starter-home inventory in McKinney and the surrounding area.