In 2016, the 109th General Assembly enacted Public Chapter 822 that prohibited a local governmental unit from enacting, maintaining, or enforcing “any zoning regulation, requirement, or condition of development imposed by land use or zoning ordinances, resolutions, or regulations or pursuant to any special permit, special exception, or subdivision plan that requires the direct or indirect allocation of a percentage of existing or newly constructed private residential or commercial units for long-term retention as affordable or workforce housing.” Subsequently, on September 6, 2016, the Metropolitan Government of Nashville and Davidson County enacted an ordinance to incentivize inclusionary housing with any residential development that seeks additional development entitlements beyond that permitted by the current zoning district. While the members of GNAA are more comfortable with the language that passed than what was originally introduced, the program is an incredibly inefficient way to address the needs of low-income families and is in direct conflict with Public Chapter 822. Despite multiple requests, the Attorney General refused to issue an opinion on the legality of Metro’s inclusionary housing program due to the threat of and potential for pending legislation by other interested stakeholders. As such, the Tennessee Apartment Association Board of Director’s vote to pursue legislation addressing the issue at the state level.
Senate Bill 0363 by Senator Ferrell Haile/House Bill 1143 by House Majority Leader Glen Casada was introduced to clarify that no local government has the authority to enact a law that would place requirements regarding inclusionary, affordable, or below market value housing when entitlements, variances, or any other form of permit or authorization is sought from the local government. Specifically, the language prohibits a local government from conditioning any zoning change, variance, building permit, or any change in land use restrictions or requirements on the allocation of existing or newly constructed private residential or commercial rental units to be sold or rented at below market rates. Additionally, the language prohibits a local government from requiring a person to waive the person’s constitutionally protected rights related to real property in order to increase the number of existing or newly constructed private residential or commercial rental units to be available for purchase or lease at below market rates. Nothing in the language precludes a local government from creating or implementing a purely voluntary incentive-based programed designed to increase the construction or rehabilitation of workforce or affordable housing. Such programs may include providing local tax incentives, subsidization, real property or infrastructure assistance, or any other incentive that makes the construction of affordable housing more economical, so long as no power or authority granted to the local government to regulate zoning or land use planning is used to incentivize or leverage a person to develop, build, sell, or rent housing at below market value.
The senate bill will be heard by the Senate State and Local Government Committee. The house companion bill will be heard by the House Local Government Committee. The bill is expected to begin making its way through the committee process within the next few weeks. If passed, all ordinances, resolutions, regulations, rules, or requirements of any type of a local government that are in conflict with the language, including Metro’s program, will be void and unenforceable.