One developer’s leverage can be a city official’s nightmare as a “seismic shift” is taking place in developments along the outskirts of cities.
A Texas law has stripped cities’ sway in determining how subdivisions are built and regulated in their extraterritorial jurisdictions, creating flexibility in the eyes of some developers and chaos for neighboring cities.
The move stems from Senate Bill 2038 — the “ETJ Opt-Out Bill” — which allows landowners to remove property from a city’s ETJ, where municipalities can regulate land just beyond their borders, the Dallas Morning News reported. The law, which took effect in 2023, unleashed a power shift in development dynamics.
Developers see newfound flexibility in negotiating infrastructure and utilities; cities see chaos.
“It’s sort of the tail wagging the dog,” Fort Worth Assistant City Manager Dana Burghdoff told the outlet. “You can’t plan for random.”
When nearly 2,000 acres west of Fort Worth sold in 2022, the city of Aledo branded it the “Gateway to Aledo,” a sprawling, mixed-use vision known as Dean Ranch.
Two years later, that gateway is under new management. Part of Dean Ranch has quietly shifted into the neighboring city of Willow Park through the legal process enacted in SB 2038.
In the Aledo case, developer Logan Beall of Beall Development pulled 317 acres out of Fort Worth’s ETJ to join Willow Park, where he’s planning a $500 million community of homes, apartments and light industrial uses near Interstate 20 and FM 1187. Beall said the decision came down to infrastructure.
“Willow Park had the sewer capacity ready,” he told the outlet. “It allowed us to get going fastest.”
Willow Park Assistant City Manager Toni Fisher said the city council already approved a development agreement and that other Dean Ranch landowners are exploring similar annexations.
But the jurisdictional shuffle sparked friction: Fort Worth and Aledo attorneys accused Willow Park of overstepping by annexing a 10-acre stretch of Bankhead Highway right-of-way. City officials are negotiating behind closed doors.
Statewide, the new law prompted thousands of “de-annexation” petitions and legal challenges from cities like Grand Prairie, whose lawsuit was dismissed this spring.
Meanwhile, cities are racing to adapt. Fort Worth received nearly 5,000 acres’ worth of release requests, according to city data, raising fears of “Swiss cheese” development patterns that disrupt long-term infrastructure planning.
The city of Austin had 191 petitions for “direct release” in the first two months alone when the law took effect in 2023.
For developers, it’s a new era of leverage.
“Having a choice is not a bad thing,” Beall said.
— Eric Weilbacher
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