Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date:June 12, 2025 (Immediate effect due to supermajority vote).
Compliance Deadline:Immediate. Municipalities must cease collection of home occupation permit fees and processing of applications immediately. Businesses must align operations with "no-impact" standards immediately to claim statutory protection.
Agency Rulemaking: No state-level rulemaking is required. However, anticipate a "regulatory gray zone" over the next 6-12 months as individual municipalities revise local nuisance ordinances to define "substantial traffic" and "nuisance" to regain control over residential commercial activity.
Immediate Action Plan
Cease Payments: Stop all payments for municipal home-based business permits or licenses immediately.
Audit Operations: Verify your business meets the "no-impact" criteria: no exterior signage, no outdoor storage, and traffic levels comparable to a standard residence.
Review Private Restrictions: Read your HOA CC&Rs and Lease Agreement. If these documents ban business use, you are not protected by this law.
Secure Insurance: Contact your broker to add commercial liability coverage to your home or renters policy immediately.
Operational Changes Required
Contracts
Residential Leases: Landlords can no longer rely on city zoning to prohibit business activity. Lease templates must be amended to explicitly define permitted "no-impact" business uses or strictly prohibit them. Indemnification clauses must be updated to protect owners from commercial liability on residential property.
HOA Covenants: HOAs must review Declaration of Covenants, Conditions, and Restrictions (CC&Rs). If an HOA intends to ban home businesses, it must enforce existing covenants vigorously, as city code enforcement will no longer act as a backstop.
Hiring/Training
Property Management Staff: Train leasing agents and property managers that "working from home" is no longer a presumptive zoning violation. Enforcement must be based on lease terms (contract breach), not municipal code.
Code Enforcement Officers: Municipal staff must be retrained to stop issuing citations for unpermitted home businesses unless there is a specific health, safety, or nuisance violation.
Reporting & Record-Keeping
Proof of "No-Impact": Businesses must maintain an Occupancy Log proving that the number of on-site employees and clients does not exceed the municipal occupancy limit for the dwelling.
Visual Audits: Maintain dated photographic evidence of the property exterior to prove no business activity (signage, inventory, heavy equipment) is visible from the street, providing a defense against nuisance complaints.
Fees & Costs
Fee Elimination: Businesses should stop paying municipal "Home Occupation Permit" fees immediately.
Insurance Costs: Homeowners' insurance policies typically exclude business liability. Business owners must purchase a Commercial General Liability rider or a Business Owners Policy (BOP). Landlords should require proof of this coverage.
Strategic Ambiguities & Considerations
"Substantial Increase in Traffic": The statute allows cities to regulate businesses that generate "substantial" traffic but fails to define the threshold. Expect cities to set aggressive limits (e.g., "more than 2 client vehicles per day") via ordinance.
"Visible from a Street": It is unclear if a branded commercial vehicle parked in a driveway constitutes "business activity." Until case law settles this, park branded vehicles in garages or cover signage.
Short-Term Rentals (STRs): The law explicitly excludes STRs from this protection. Do not conflate "home-based business" deregulation with Airbnb/VRBO deregulation; cities retain full authority to ban or regulate STRs.
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The bill author has informed the committee that over the past few decades, technological advances have afforded entrepreneurs unprecedented opportunities to start businesses from their homes, allowing them to save money, maintain a flexible schedule, and realize their dreams of self-employment. The bill author has also informed the committee that although the COVID-19 crisis made the ability to work from home even more important, scores of outmoded zoning, licensing, and permitting requirements are impeding the freedom to run a home-based business regardless of whether that business has any impact on the neighboring community. The bill author has further informed the committee that in some cities, operating a home-based business is a crime punishable by stiff financial penalties and even jail time, and that while local governments should protect neighborhoods against nuisances, they should not impose blanket prohibitions on home-based businesses. C.S.H.B. 2464 seeks to protect homeowners against lengthy, uncertain, and expensive licensing and permitting processes that prevent people from working from home instead of in a traditional office by prohibiting the governing body of a municipality from prohibiting the operation of a home-based business that does not impact the residential area in which it operates.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
C.S.H.B. 2464 amends the Local Government Code to prohibit the governing body of a municipality from adopting or enforcing an ordinance, regulation, or other measure that does any of the following:
·prohibits the operation of a no-impact home-based business;
·requires a person that operates a no-impact home-based business or that owns the property where the business is operated to obtain a license, permit, or other approval to operate the business; or
·requires a person that operates a home-based business or that owns the property where the business is operated to do the following:
orezone the property for a non-residential use; or
oinstall a fire sprinkler protection system if the residence where the business is operated consists only of a single-family detached residential structure or a multi‑family residential structure with not more than two residential units.
C.S.H.B. 2464 authorizes the governing body of a municipality to do the following with respect to a home-based business:
·require that a home-based business be:
oin compliance with federal, state, and local law, including a municipal fire and building code and a municipal regulation related to health and sanitation, transportation or traffic control, solid or hazardous waste, or pollution and noise control;
ocompatible with the residential use of the property where the business is located; and
osecondary to the use of the property as a residential dwelling; and
·limit or prohibit the operation of a home-based business that sells alcohol or illegal drugs, is a structured sober living home, or is a sexually oriented business.
The bill expressly does not prohibit a person from enforcing a rule or deed restriction imposed by a homeowners' association or by other private agreement or a municipality from adopting or enforcing an ordinance regulating the operation of a short-term rental unit.
C.S.H.B. 2464 defines the following terms for purposes of the bill's provisions:
·"business" has the meaning assigned to the term under the Business Organizations Code;
·"home-based business" means a business that is operated from a residential property, by the owner or tenant of the property, and for the purpose of manufacturing, providing, or selling a lawful good or providing a lawful service; and
·"no-impact home-based business" means a home-based business that:
ohas at any time on the property where the business is operated a total number of employees and clients or patrons of the business that does not exceed the municipal occupancy limit for the property;
odoes not generate on-street parking or a substantial increase in traffic through the area; and
ooperates in a manner in which none of its activities are visible from a street.
EFFECTIVE DATE
On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 2464 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
The substitute includes a provision absent from the introduced establishing that the bill's provisions expressly do not prohibit a municipality from adopting or enforcing an ordinance regulating the operation of a short-term rental unit.
Effective June 12, 2025, Texas municipalities are statutorily prohibited from requiring licenses, permits, or fees for "no-impact" home-based businesses, effectively deregulating remote work and micro-enterprises at the city level. However, this law does not override Homeowners' Association (HOA) covenants or private lease agreements, meaning enforcement authority has shifted entirely from municipal code enforcement to private contract law and nuisance abatement. Implementation Timeline Effective Date: June 12, 2025 (Immediate effect due to supermajority vote).
Q
Who authored HB2464?
HB2464 was authored by Texas Representative Cole Hefner during the Regular Session.
Q
When was HB2464 signed into law?
HB2464 was signed into law by Governor Greg Abbott on June 12, 2025.
Q
Which agencies enforce HB2464?
HB2464 is enforced by Municipalities (City Code Enforcement/Zoning Departments) - Authority restricted and Homeowners' Associations (HOAs) - Private enforcement authority remains intact.
Q
How urgent is compliance with HB2464?
The compliance urgency for HB2464 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB2464?
The cost impact of HB2464 is estimated as "low". This may vary based on industry and implementation requirements.
Q
What topics does HB2464 address?
HB2464 addresses topics including business & commerce, business & commerce--general, city government, city government--land use & zoning and property interests.
Legislative data provided by LegiScanLast updated: November 25, 2025
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