Housing

Plain English Breakdown

Checked against official source text during the last sync.

Tennessee Property Rights Protection Act

This act changes how housing authorities can take over properties in Tennessee by focusing on specific property violations and limiting the use of eminent domain.

What This Bill Does

• Changes the definition of 'blighted property' to mean a property with serious code violations that affect safety and have not been fixed after two notices from local government.
• Gives property owners the right to ask a court if taking their property is really needed to fix blight.
• Allows housing authorities to buy non-blighted properties without using eminent domain, even paying more than fair market value.
• Requires housing authorities to use eminent domain only for truly blighted properties or those that are clearly for public use.

Who It Names or Affects

• Property owners in Tennessee who might face the loss of their property due to redevelopment plans.
• Housing authorities and community development agencies involved in urban renewal projects.

Terms To Know

blighted property

A property with serious code violations that affect safety and have not been fixed after two notices from local government.

eminent domain

The power of the government to take private property for public use, often requiring payment but not always fair compensation.

Limits and Unknowns

• It is unclear how this act will affect local governments' budgets and funding for redevelopment projects.
• The exact fiscal impact on local governments cannot be estimated due to various unknown variables.

Official Summary Text

This bill enacts the "Tennessee Property Rights Protection
Act," as described below.

BLIGHTED PROPERTY

Present law authorizes
housing authori
ties
, including municipal housing authorit
ies, certain community development agencies, and certain development authorities
,
to
carry out
a "
redevelopment project
" for bl
ighted areas
and
by taking a variety of actions, including, but not limited to,
(
i
)
a
cquir
ing

the
blighted areas;

(
ii
)
a
cquir
ing
other real property for the purpose of removing, preventing, or reducing blight, blighting factors, or the causes of blight; (
i
ii
)
a
cquir
ing
real property where the condition of the title, the diverse ownership of the real property to be assembled, the street or lot layouts, or other conditions, prevent a proper development of the property and where the acquisition of the area by
the authority is necessary to carry out a redevelopment plan or urban renewal plan;
and (iv) selling or leasing land so acquired.

Under present law, "blighted areas" are areas,
including slum areas, with buildings or improvements that, by reason of dilap
idation, obsolescence, overcrowding, lack of ventilation, light and sanitary facilities, deleterious land use, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community.
This bill revises the
definition of "blighted property" to, instead, mean an
improvement to real property that was inspected by the appropriate local governmental authority and cited for one or more enforceable housing, maintenance, or building code violations that
(i) affect
the safety of the occupants or the public
, (ii) involve one or more elements that are described in this bill, and (iii) have not been remedied within a reasonable time after two notices to cure the noncompliance.

RIGHT TO PETITION A COURT

When a housing
authority or other condemning authority approves a prospective or actual taking under provisions of present law relative to the redevelopment of blighted areas, this bill provides that the
property owner has a right to have a court of competent jurisdicti
on determine if the taking is to remediate blight and resell the property.

ACTIONS NOT PRECLUDED

This bill clarifies that the present law provisions relative to the authority granted above do not preclude any of the following situations:



A
housing authority or community development agency from designating an area for the purpose of urban renewal or redevelopment, subject to approval by the governing body of the local government in which the urban renewal or redevelopment area is located
.



A
municipality from establishing a tax increment financing zone within or without a redevelopment area or urban renewal area
.



A
municipality or housing authority from applying for and using grant funding to facilitate a redevelopment or urban renewal plan.

PERMITTED METHODS TO ACQUIRE BLIGHTED PROPERTY

This bill authorizes a housing authority, as described above, to
acquire real property through a negotiated sale, without the use of eminent domain. A housing authority may pay more than fair market value
for a property that is not a blighted property.
A housing authority may
contract with a third-party agent, at the housing authority's expense, for the purpose of negotiating the purchase price of real property within an urban renewal or redevelopment are
a if the property is not subject to acquisition by eminent domain.

"PUBLIC USE" RELATIVE TO EMINENT DOMAIN

Present law provides that "public use," as used in present law provisions relative to the power and use of eminent domain, includes the acquisitio
n
of property by a housing authority or community development agency to implement an urban renewal or redevelopment plan in a blighted area
. This bill limits such acquisitions by a housing authority or community development agency to only acquisitions of
blighted property or property that is for public use.

Current Bill Text

SENATE BILL 480
By Bowling

HOUSE BILL 444
By Hulsey

HB0444
000686
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 13,
Chapter 20; Title 13, Chapter 21 and Title 29,
Chapter 17, relative to housing authorities.

WHEREAS, the General Assembly expressed the need to protect private property from
eminent domain in Public Chapter 863 in 2006 with the following statement: "It is the intent of
the general assembly that the power of eminent domain shall be used sparingly, and that laws
permitting the use of eminent domain shall be narrowly construed so as not to enlarge by
inference or inadvertently the power of eminent domain."; and
WHEREAS, under Tennessee Code Annotated, Section 13-20-201, the broad definition
of "blighted areas" places non-blighted real property at risk of acquisition by eminent domain
because "blighted areas" may contain individual properties that do not meet the definition of
"blighted areas" under such statute; and
WHEREAS, this act deletes the "blighted areas" definition in Tennessee Code
Annotated, Section 13-20-201, and replaces it with a property-by-property definition to protect
well-kept, code-compliant, non-blighted real properties from being taken by the power of
eminent domain while preserving the ability of housing authorities to use the power of eminent
domain to acquire properties for redevelopment that are truly blighted properties; and
WHEREAS, this act improves due process for property owners by providing a
reasonable amount of time for owners of blighted property to correct code violations that cause
their property to be deemed as blighted before their property is subjected to acquisition by
eminent domain proceedings by housing authorities; and

- 2 - 000686

WHEREAS, this act replaces and narrows the definition of "blighted areas" while
preserving the ability of housing authorities to acquire property by the power of eminent domain
for public use; now, therefore,
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. This act is known and may be cited as the "Tennessee Property Rights
Protection Act."
SECTION 2. Tennessee Code Annotated, Section 13-20-201, is amended by deleting
the section and substituting:
As used in this part, "blighted property":
(1) Means an improvement to real property that was inspected by the
appropriate local governmental authority and cited for one (1) or more
enforceable housing, maintenance, or building code violations that:
(A) Affect the safety of the occupants or the public;
(B) Involve one (1) or more of the following:
(i) A roof or roof framing element;
(ii) Support walls, beams, and headers;
(iii) Foundation, footings, and subgrade conditions;
(iv) Light and ventilation;
(v) Fire protection, including egress;
(vi) Internal utilities, including electricity, gas, and water;
(vii) Flooring and flooring elements; or
(viii) Walls, insulation, and exterior envelope; and
(C) Have not been remedied within a reasonable time after two
(2) notices to cure the noncompliance; and

- 3 - 000686

(2) Does not include land used primarily in the production of agriculture,
as that term is defined in § 1-3-105.
SECTION 3. Tennessee Code Annotated, Section 13-20-202, is amended by adding
the following new subsections:
(d) When a housing authority or other condemning authority approves a
prospective or actual taking under this part 2, the property owner has a right to have a
court of competent jurisdiction determine if the taking is to remediate blight and resell the
property.
(e) This section does not preclude:
(1) A housing authority or community development agency from
designating an area for the purpose of urban renewal or redevelopment, subject
to approval by the governing body of the local government in which the urban
renewal or redevelopment area is located;
(2) A municipality from establishing a tax increment financing zone within
or without a redevelopment area or urban renewal area; or
(3) A municipality or housing authority from applying for and using grant
funding to facilitate a redevelopment or urban renewal plan.
SECTION 4. Tennessee Code Annotated, Section 13-20-203, is amended by adding
the following new subsections:
(c) A housing authority may acquire real property through a negotiated sale,
without the use of eminent domain. A housing authority may pay more than fair market
value for a property that is not a blighted property.
(d) A housing authority may contract with a third-party agent, at the housing
authority's expense, for the purpose of negotiating the purchase price of real property

- 4 - 000686

within an urban renewal or redevelopment area if the property is not subject to
acquisition by eminent domain.
SECTION 5. Tennessee Code Annotated, Section 13-20-202(a)(1), is amended by
deleting the language "blighted areas" and substituting "blighted property".
SECTION 6. Tennessee Code Annotated, Section 13-20-209, is amended by deleting
the language "blighted areas" wherever it appears and substituting "blighted property".
SECTION 7. Tennessee Code Annotated, Section 13-20-216(a), is amended by
deleting the language "blighted area" and substituting instead the language "blighted property".
SECTION 8. Tennessee Code Annotated, Section 29-17-102, is amended by deleting
subdivision (2)(C) and substituting:
(C) The acquisition of property by a housing authority or community
development agency to implement an urban renewal or redevelopment plan as
authorized by title 13, chapter 20, part 2; provided, that the power of eminent domain is
used only for the acquisition of:
(i) Blighted property as defined in § 13-20-201; or
(ii) Property that is for public use;
SECTION 9. This act takes effect upon becoming a law, the public welfare requiring it.