How Annexations Shape Modern Cities

Annexations remain one of the most impactful - and controversial - tools in municipal planning. By redrawing boundaries or adjusting extraterritorial jurisdictions (ETJs), cities and towns can integrate unincorporated areas, streamline service provision, and guide growth more effectively. Whether initiated by a municipality or voluntarily requested by property owners, annexation proceedings are central to shaping the future of local communities.

ReZone has analyzed 4082 city decisions over the last few months across the largest 100 municipalities nationwide. Below, we’ll explore how and why communities are expanding and what annexations might mean in the broader context of growth, zoning, and land use.

1. Residential Growth and Housing Demand

A significant number of annexations involve residential development, whether single-family subdivisions, multifamily communities, or affordable housing initiatives.

In San Antonio, special improvement districts like Clearwater Creek and Sapphire Grove have expanded to accommodate large subdivisions, often hundreds of single-family units. By annexing these areas (technically still within the city’s ETJ), the city can guide service delivery and land use, ensuring new neighborhoods are built to local standards.

In Charlotte and Raleigh we see a steady stream of “voluntary annexations” for subdivisions, like Courtyards at Back Creek (78+ acres) or Rock Quarry Road (52 townhomes plus commercial). Developers petition to join city limits so they can tap into municipal water, sewer, police, and fire services.

Columbus, Ohio, methodically annexes parcels in surrounding townships, enabling expansions of new housing projects. Owners in Washington, Brown, and Franklin Townships commonly request annexation, so subdivisions can align with Columbus’s long-range planning and access robust utilities. Under the right circumstances, these annexations can create huge public benefits for both municipalities. In fact, it might be the only viable solution for failing inner-ring municipalities.

Most of the housing annexations we see are pretty straightforward. The city provides basic infrastructure, usually through a public-private partnership with a developer, and regulates zoning. In return, property owners benefit from city utilities and the possibility of higher property values.

2. Growth-Focused Infrastructure Partnerships

Similar as in our analysis of infrastructure development, there’s a recurring trend of partnering with utility districts to fund and manage infrastructure in newly annexed areas. Where municipalities might previously have shouldered these costs, we now see more cooperative agreements and special-purpose districts easing the financial and managerial load.

For example, Houston authorized expansions of Bridgestone MUD and Harris County WCID No. 119, allowing each district to add acres for water, wastewater, and stormwater services. Rather than financing new infrastructure citywide, Houston’s approach helps the utility districts absorb costs and oversee distribution.

Corpus Christi uses its industrial district agreements to govern infrastructure in heavy industrial areas, only annexing the parcels that did not execute or renew their agreements. This ensures that any newly annexed site contributes to municipal revenues, preventing “free riders” who benefit from city infrastructure without paying taxes or fees.

Austin often merges annexations with utility extension policies. When property owners petition to join the city’s ETJ, they tap into Austin’s water, sewer, and drainage infrastructure under cost-participation plans that align the city’s strategic growth areas with developer investments.

Cities increasingly see annexations as cost-sharing opportunities, where new land brought into city limits is served through district-based funding or joint agreements. This minimizes upfront financial strain on the municipal budget while ensuring that annexed areas receive adequate infrastructure.

3. Industrial and Commercial Megasites

Industrial sites can often be unpleasant. However, they provide job opportunities and are crucial for a city’s financial well-being. That’s why cities usually place them around the edges and create buffer zones between large industrial/commercial sites and residential zones. But what happens when a city runs out of space? Annexations.

Fort Worth annexed Walsh West (over 78 acres) to spur commercial growth in its Far West Planning Sector, aligning it with the city’s comprehensive plan for General Commercial land use.

North Las Vegas took in 15.96 acres near Fisher Avenue for heavy industrial uses, while Huntsville, Alabama annexed 25.08 acres near I-65 for future industrial sites. In both cases, the city extends services to prime real estate that can attract large-scale employers and anchor future business expansions.

Glendale, Arizona, near Luke Air Force Base, annexed 9 acres for an industrial logistics facility. Proximity to a military installation imposes special regulations, but Glendale sees the trade-off as worth it for the economic benefit.

Cities seem to treat these types of annexations as business development strategies. They set the stage for manufacturing sites, warehousing, and commercial centers that boost employment and city revenues. Once annexed, the municipality can zone the land for heavier or specialized uses, ensuring it attracts the right kind of industry.

4. Realigning Jurisdictions and Extraterritorial Releases

Sometimes annexations (or disannexations) aren’t just about new development. Instead, they clarify confusing boundaries or respond to evolving state laws on ETJ releases.

San Antonio and Houston frequently manage extraterritorial jurisdictions. San Antonio, for instance, released 97.38 acres from its ETJ under new legislation requiring landowner consent, while also annexing land through “Strategic Partnership Agreements” in areas like Medina County.

Austin adjusted its ETJ with Manor, swapping parcels along Blue Bluff Road for clearer, more logical boundaries. Meanwhile, San Antonio did a similar swap in Comal County, releasing 214 acres from the ETJ to comply with property-owner requests.

Portland fine-tunes city borders by annexing small properties within its Urban Services Boundary—like the 0.16-acre parcel on SE Clatsop Street—ensuring consistent city services (water, sewer, fire) and simpler boundary lines.

These moves reduce service overlap and administrative friction. Clear boundaries also eliminate confusion over which municipality provides utilities or police coverage and fulfill landowner rights in states requiring consent for ETJ expansions or releases.

5. Environmental and Watershed Considerations

Several annexations highlight attention to floodplains, water resources, and watershed protection.

Durham, North Carolina, has multiple annexations in Falls/Jordan Watershed Overlays—like Farrington Road Multifamily or Tri-Creek—where the city imposes extra environmental protections. Developers must build to certain density caps or undertake stormwater upgrades that preserve water quality.

Corpus Christi’s industrial district expansions often include flood zone or coastal protections, ensuring that any new refineries or industrial uses meet the city’s environmental standards.

In Houston’s MUD annexations, the city ensures stormwater planning is integrated for tracts in or near floodplains—like those near Spring Cypress Road.

Environmental overlays and watershed regulations guide annexations, helping cities manage flood risks and water quality. By bringing land under municipal jurisdiction, local governments can enforce stricter codes, protect resources, and align new development with environmental best practices.

Conclusion

Municipal annexations have wide-ranging impacts on local land use, economics, and service delivery. Whether driven by infrastructure partnerships, housing expansions, industrial development, ETJ realignments, or environmental protections, each annexation shapes how a city grows and who foots the bill for infrastructure.

As local governments increasingly collaborate with utility districts, adopt special development agreements, and respond to evolving state laws, annexations will remain a primary lever for steering urban expansion.

Daniel Heller
[email protected]