Dan King
Dan King · May 5, 2023

AUSTIN, Tex.—In a long-awaited win for property rights, yesterday the Texas Legislature passed HB 3490, a bill that strongly disincentivizes the use of an abusive land-use tool known as “amortization.” As a result of the reform, it will be harder for central planners to use zoning codes to force so-called “incompatible” businesses like mechanic shops or other necessary services to close or move their businesses with no compensation. In cases where a city does decide to move forward with amortization, the bill provides ample protections to ensure property owners are fairly compensated. 

Local Texas governments have a long history of abusing amortization—a misnomer that describes the process of changing an area’s zoning classification and then forcing the closure of existing businesses no longer allowed. Its controversial use has also been challenged in the Texas courts, with many businesses that were driven out of business arguing that its use violated the Texas Constitution. 

The bill’s passage was welcomed by Texans like Hinga Mbogo, a Dallas mechanic who unsuccessfully challenged the city’s effort to push his shop out of town using amortization.  

“I’d been operating in Dallas for decades,” said Mbogo. “But when the city council decided that my business did not fit with its desire to turn the street into an ‘arts corridor,’ I sued to protect my rights. After years of fighting, I lost my battle in the Texas courts. With the passage of this bill, I feel as though I’ve finally won. Dallas forced me to close my shop to make way for something more consistent with its vision. At least with this law, cities will think twice about doing the same to someone else.” 

Mbogo was represented by the Institute for Justice (“IJ”) in his challenge against Dallas. “What happened to Hinga, and so many others in Dallas and across Texas, was a grave injustice and an affront to individual rights,” said IJ Senior Attorney Bill Mauer, who represented Hinga in his lawsuit. “With the passage of HB 3490, the Texas legislature is stepping in to protect the property rights of all Texans and ensure that what happened to Hinga does not happen to anyone else.” 

Across the country, IJ works with lawmakers to end property rights abuses through the legislative process after the courts have refused to protect property rights. After the U.S. Supreme Court refused to protect IJ client Susette Kelo’s home from eminent domain abuse in the infamous Kelo v. New London case, IJ spearheaded an effort to change eminent domain laws in statehouses across the country, resulting in legal reform in 44 states.