FAA Rules Texas Airport Violated Federal Rules by Selling Land for Nearby Housing Development

The Federal Aviation Administration (FAA) has officially determined that the private owner of Pearland Regional Airport near Houston breached several federal grant assurances by selling airport land to a developer building hundreds of nearby homes. This sale, completed in May 2022, allowed construction of about 420 residential units on a 55-acre site adjacent to the airport, something the FAA says directly conflicts with airport obligations tied to federal funding.

Clover Acquisition Corp., the private company that owns Pearland Regional Airport, was ordered by the FAA to submit a corrective action plan within 30 days to address and resolve the violation. The deadline has since been extended to September 30, with Clover required to explain how it will return the airport to compliance with federal grant assurances. Pending acceptance of this plan, the FAA said it will urge the Texas Department of Transportation (TxDOT) to withhold approval of any federal funding requests submitted by Clover for airport improvements.

In July 2022, TxDOT alerted Clover to concerns raised by the Aircraft Owners and Pilots Association (AOPA) and other airport users about the proposed residential development. TxDOT referred the matter to the FAA, which independently opened an investigation under Part 16 of FAA regulations. This proactive move by the FAA highlights the seriousness with which it viewed the situation, as investigations typically require formal complaints.

The FAA’s findings center on Clover's May 2022 sale of 41 acres at Pearland Regional Airport to The Landing at Pearland developers for $10 plus other considerations, plus the granting of a permanent drainage easement across federally obligated land—all without FAA approval. Such grant assurances are conditions tied to federal funding designed to maintain airport safety and promote compatible land use around airports.

The FAA found Clover violated four specific grant assurances: Grant Assurance 5, concerning preserving sponsor rights and powers; Grant Assurance 20, about hazard removal and mitigation; Grant Assurance 21, which covers compatible land use; and Grant Assurance 29, related to adherence to the airport layout plan. Additionally, the unauthorized drainage easement was found to violate federal law.

Particularly critical was the FAA's conclusion that placing approximately 420 homes immediately adjacent to a federally obligated airport is fundamentally incompatible. The FAA noted that portions of the new residential area fall within the 65-decibel day-night average sound level (DNL) contour outlined in the FAA-approved airport layout plan, signaling prior knowledge of the incompatibility by Clover before the land sale. This finding underscores the FAA’s strict stance on protecting airports from encroaching incompatible development.

The FAA also flagged environmental and operational safety concerns stemming from the developer’s construction of a large detention pond next to the runway area. The airport did not conduct required wildlife hazard assessments or issue warnings about potential increased bird activity near the pond. The detention pond is positioned on land the airport had reserved in its layout plan for a future parallel taxiway, raising concerns about the long-term operational impact.

Since 2022, Clover has defended its actions by asserting that no federally obligated land was sold, arguing the drainage area had no aeronautical use, and noting it retains a 20-percent ownership stake in The Landing development, which they claim allows imposing restrictions on residents to mitigate issues. The FAA rejected these arguments, stating Clover offered no evidence of that equity stake and emphasized that homeowner restrictions cannot substitute for preventing fundamentally incompatible development the airport sponsor could have halted under federal grant assurances.