Housing

Plain English Breakdown

The official source material does not provide specific details on how much federal funding could be jeopardized or the exact impact of the bill on THDA operations.

Affordable Housing and Tenant Protection Act

This bill allows local governments to set rent control rules for private residential rental units and establishes an increased housing program run by THDA to support affordable housing development.

What This Bill Does

• Removes the ban on local governments setting rules that limit how much landlords can charge for renting homes, but only applies to residential properties.
• Requires local governments to study housing needs before making new rent control laws and establish a process for challenging decisions made by local rent agencies.
• Creates an increased housing program run by THDA to help build more affordable homes and support first-time homebuyers.
• Establishes a fund in the state treasury to provide money for THDA's increased housing program.

Who It Names or Affects

• Local governments that want to set rent control rules for residential properties.
• Landlords who own rental properties.
• Homebuyers looking to purchase their first home.
• Developers building new homes or renovating existing ones.

Terms To Know

Rent Control

Rules set by local governments that limit how much landlords can charge for renting a home, but only applies to residential properties.

Increased Housing Program

A program designed to help build more affordable homes and support first-time homebuyers in Tennessee.

Limits and Unknowns

• The bill could affect federal funding if local governments use rent control rules.
• It is unclear how much the increased housing fund will grow or what its full impact on THDA operations will be.
• Local governments must get a two-thirds vote to adopt new rent control laws.

Official Summary Text

This bill enacts the "
Affordable Housing and Tenant Protection Act
," which removes the prohibition on rent control for residential property.

RENT CONTROL

Present law prohibits a local governmental unit from
enact
ing
, maintain
ing
or enforc
i
ng
an ordinance or resolution that would have the effect of controlling the amount of rent charged for leasing private residential or commercial property.
This bill removes residential property from this provision, so that rent control is only prohibited
for private commercial property.

Present law further prohibits
a local government
al
unit, or any subdivision or instrumentality thereof,
from
enacting, maintaining or enforcing any ordinance, resolution, regulation, rule, or other requirement of any typ
e that
does any of the following
:



Requires the direct or indirect allocation of existing or newly constructed private residential or commercial rental units to be sold or rented at below market rates
.



Conditions any zoning change, variance, building permit, development entitlements through amendment to the zoning map, 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
.



Requires a person to waive the person's constitutionally protected rights related to real property in order that the local government
al
unit can increase the number of existing or newly constructed private residential or commercial rental units that would be available for purchase or lease at below market rates within the jurisdiction of the local government
al
unit.

This bill removes from these provisions prohibitions on residential property.

Exception
s to Rent Control Prohibition

Present law authorizes
a local government
al
unit
to
creat
e
or implement a purely voluntary incentive-based program designed to increase the construction or rehabilitation of workforce or affordable private residential or commercial rental units, which may include providing local tax incentives, subsidization, real property or infrastructure assistance
. This bill removes from this provision residential rental units.

Present law authorizes
any other incentive that makes construction of affordable housing more economical, so long as no power or authority granted to the local government
al
unit 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.
This bill removes this provision.

This bill authorizes a
local government
al
unit
to
, by
a
two-thirds vote of its legislative body, adopt an ordinance or resolution to control the amount of rent charged for leasing private residential property, including the establishment and adjustment of maximum rents and rental application fees.
However, p
rior to adopting an ordinance or resolution
,
the local government
al
unit
must do all of the following
:



Determine
the supply of housing accommodations within the local government
al
unit, the condition of the accommodations, and the need for continuing the regulation and control of residential rents within the local government
al
unit
.



Establish or designate a board, commission, or agency of the local government
al
unit ("local rent agency") to administer the regulation and control of residential rents within the local government
.



Establish a process for a person who is aggrieved by a final determination of

a local rent agency to challenge the determination, which must include written notice
,
an explanation of any alleged violation of a regulation or order
,
an opportunity to request an administrative hearing
,
and
an opportunity
to subsequently appeal the final order of the local rent agency to the chancery court of the county in which the agency is located.

INCREASED HOUSING PROGRAM

This bill creates
the increased housing program to be administered by the Tennessee housing development agency (THDA). The goal of the program is to help create more affordable housing across this state.

Participants

This bill requires t
he program
to
assist both developers and first-time homebuyers. Developers may apply for gap financing in building both single family and multi-family homes across the state. First-time homebuyers of an owner-occupie
d primary residence may apply for a grant assisting in making their down payments in purchasing the residence or paying closing costs, or both. The program must fund both urban and rural housing developments across this state.
P
reference
must be given
to
applicants who are looking to develop or buy housing in communities that have been under a federally declared disaster within the 12 months immediately preceding the date of application.
However, p
articipants must not be eligible for the Tennessee rural
and workforce housing tax credit.

Rule-Making

This bill authorizes t
he THDA
to
promulgate rules to implement t
he
program.

Report
ing

Th
is bill requires the
THDA
to
provide an annual report beginning January 1, 2026, to the governor, the speakers of the house of representatives and the senate,
and legislative committees,
detailing how many awards have been made to both developers and to first-time homebuyers, how man
y additional housing units have been built, along with other program information deemed relevant by the THDA.

INCREASED HOUSING REVOLVING FUND

This bill creates in
the state treasury a revolving fund for th
e
THDA
called
the

increased housing revolving f
und
("the fund").
The fund must consist of all moneys received by the THDA from appropriations, donations, grants, or other sources of funding.

All monies deposited in the fund must be expended by the THDA for the purpose of the increased housing program
as described
above
.
However, o
f the funds available, the THDA may use up to 5% of the funds to cover additional administrative costs to the THDA in administering the increased housing program.

Current Bill Text

SENATE BILL 961
By Lamar

HOUSE BILL 955
By Brooks

HB0955
001142
- 1 -

AN ACT to amend Tennessee Code Annotated, Title 7,
Chapter 53; Title 9; Title 12; Title 13; Title 66 and
Title 67, relative to housing.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. This act is known and may be cited as the "Affordable Housing and Tenant
Protection Act."
SECTION 2. Tennessee Code Annotated, Section 66-35-102, is amended by deleting
the language "residential or" wherever it appears in subsection (a) and subdivision (b)(1).
SECTION 3. Tennessee Code Annotated, Section 66-35-102(b), is amended by
deleting subdivisions (2) and (3) and substituting instead:
(2) This subsection (b) does not prohibit a local government unit from creating or
implementing a purely voluntary incentive-based program designed to increase the
construction or rehabilitation of workforce or affordable private commercial rental units,
which may include providing local tax incentives, subsidization, real property, or
infrastructure assistance.
(3) A person who suffers an ascertainable loss of money or property, real,
personal, or mixed, or any other article, commodity, or thing of value wherever situated,
as a result of the practices prohibited by this section, may bring an action individually to
recover actual damages.
SECTION 4. Tennessee Code Annotated, Title 66, Chapter 35, Part 1, is amended by
adding the following as a new section:
66-35-104.
(a) The general assembly finds that:

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(1) A serious public emergency continues to exist in the housing of a
considerable number of persons in this state;
(2) Such emergency necessitates the intervention of state and local
government in order to prevent speculative, unwarranted, and abnormal
increases in rents;
(3) There continues to exist an acute shortage of dwellings;
(4) Unless residential rents are regulated and controlled, disruptive
practices and abnormal conditions will produce serious threats to the public
health, safety, and general welfare;
(5) Preventative action is necessary in order to prevent exactions of
unjust, unreasonable, and oppressive rents and rental agreements;
(6) The transition from regulation to a normal market of free bargaining
between landlord and tenant, while still the objective of state policy, must be
administered with due regard for such emergency; and
(7) The policy expressed in this section may be administered locally
within local governments by an agency of the local government itself.
(b) A local government unit may, by two-thirds (2/3) vote of its legislative body,
adopt an ordinance or resolution to control the amount of rent charged for leasing private
residential property, including the establishment and adjustment of maximum rents and
rental application fees.
(c) Prior to adopting an ordinance or resolution pursuant to subsection (b), the
local government unit shall:
(1) Make a determination as to the supply of housing accommodations
within the local government unit, the condition of the accommodations, and the

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need for continuing the regulation and control of residential rents within the local
government unit;
(2) Establish or designate a board, commission, or agency of the local
government unit ("local rent agency") to administer the regulation and control of
residential rents within the local government, including making such studies and
investigations, conducting hearings, and obtaining such information as it deems
necessary or proper in prescribing any regulation or order under an ordinance or
resolution adopted pursuant to subsection (b), or in administering and enforcing
such local regulations and orders pursuant to the ordinance or resolution, and
requiring a person who rents or offers for rent or acts as broker or agent for the
rental of any housing accommodations to furnish any such information, to make
and keep records and other documents, and to make reports; and
(3) Establish a process for a person who is aggrieved by a final
determination of a local rent agency made pursuant to an ordinance or resolution
to challenge the determination, which process must include written notice and
explanation of any alleged violation of a regulation or order and an opportunity to
request an administrative hearing and to subsequently appeal the final order of
the local rent agency to the chancery court of the county in which the agency is
located.
SECTION 5. Tennessee Code Annotated, Title 13, Chapter 23, is amended by adding
the following as a new part:
13-23-601.
(a) There is created the increased housing program to be administered by the
Tennessee housing development agency (THDA).

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(b) The goal of the program is to help create more affordable housing across this
state.
(c) The program must assist both developers and first-time homebuyers.
Developers may apply for gap financing in building both single family and multi-family
homes across the state. First-time homebuyers of an owner-occupied primary residence
may apply for a grant assisting in making their down payments in purchasing the
residence or paying closing costs, or both. The program must fund both urban and rural
housing developments across this state.
(d) The program must give preference to applicants who are looking to develop
or buy housing in communities that have been under a federally declared disaster within
the twelve (12) months immediately preceding the date of application.
(e) Participants in the program must not be eligible for the Tennessee rural and
workforce housing tax credit provided in § 13-23-134.
(f) The THDA may promulgate rules in accordance with the Uniform
Administrative Procedures Act, compiled in title 4, chapter 5, to implement the increased
housing program.
(g) The THDA shall provide an annual report beginning January 1, 2026, to the
governor, the speakers of the house of representatives and the senate, the chair of the
finance, ways, and means committee of the senate, and the chair of the committee
having jurisdiction over the budget in the house of representatives detailing how many
awards have been made to both developers and to first-time homebuyers, how many
additional housing units have been built, along with other program information deemed
relevant by the THDA.
13-23-602.

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(a) There is created in the state treasury a revolving fund for the Tennessee
housing development agency (THDA) to be designated the "increased housing revolving
fund".
(b) The fund must consist of all moneys received by the THDA from
appropriations, donations, grants, or other sources of funding.
(c) All monies deposited in the fund must be expended by the THDA for the
purpose of the increased housing program as described in § 13-23-601.
(d) The state treasurer shall invest moneys in the fund for the benefit of the fund
in accordance with § 9-4-603. Interest accruing on investments and deposits of the fund
must be credited to and remain part of the fund.
(e) Any unencumbered moneys and any unexpended balance of the fund
remaining at the end of a fiscal year do not revert to the general fund, but must be
carried forward until expended in accordance with this part. No part of the fund shall be
diverted to the general fund or any other public fund.
(f) Of the funds available, the THDA may use up to five percent (5%) of the
funds to cover additional administrative costs to the THDA in administering the increased
housing program.
SECTION 6. This act takes effect upon becoming a law, the public welfare requiring it.