How many residents should a Texas care home have?

The four thresholds that matter

• —Three residents. No Texas assisted living license required. Adult Foster Care, where the provider lives in the home, or a boarding home with no personal care.
• —Four residents. An assisted living license is required. Health and Safety Code 247.002. There is no four-bed Type C license anymore; HHSC stopped issuing them.
• —Six residents. The ceiling for Community Home status under Human Resources Code 123.006. At six or fewer, deed restrictions written or amended after September 1, 1985 cannot prohibit the home and a city cannot zone it out. At seven, that protection is gone.
• —Eight residents. In a typical staffing model where one day caregiver covers up to seven residents, the eighth forces a second caregiver on duty. That is a full salary, around the clock, for one additional rent check.

The seventh resident is the most profitable one you will ever admit

If a single caregiver on duty can cover up to seven residents, then residents one through seven share the same labor cost. The seventh adds revenue and adds no staff. That makes the seventh the highest margin resident in the house.

The eighth is the opposite. The eighth forces you to put a second person on duty, and in a residential care home that person has to be there every day, around the clock. The revenue from one resident rarely covers the cost of one employee.

But the seventh resident also costs you the HOA shield

Community Home status under Chapter 123 caps out at six residents plus two supervisors. That status is what makes the home a use by right in a residential district and what overrides the deed restrictions in a master-planned subdivision.

So the seventh resident earns the best margin in the house and simultaneously hands your HOA the power to come after you. In a deed-restricted Katy or Sugar Land subdivision, six may be worth more than seven. On an unrestricted lot, seven almost certainly wins.

This is a modeling question, not an opinion

The right answer depends on the specific property, the specific deed restrictions, the rate the submarket actually pays, and the wage you have to pay a caregiver in that ZIP code. Erika runs the property through a deterministic underwriting model that prices each configuration, so the decision is made on arithmetic rather than instinct.