Tennessee SB 2385: Taxes, Real Property - As introduced, enacts the "Affordable Real Property Act." - Amends TCA Title 13, Chapter 23; Title 67, Chapter 4 and Title 67, Chapter 5.

Bill Text

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HOUSE BILL 1987
By Gilmore

SENATE BILL 2385
By Lundberg

AN ACT to amend Tennessee Code Annotated, Title 13,
Chapter 23; Title 67, Chapter 4 and Title 67,
Chapter 5, relative to affordable housing.

WHEREAS, housing is a basic necessity of life; and
WHEREAS, the lack of affordable housing can lead to homelessness and consequent
breakup of the family unit; and
WHEREAS, the United States Department of Housing and Urban Development (HUD)
has found that a family who pays more than thirty percent of its income for housing may have
difficulties paying for other basic necessities such as food, clothing, transportation, and medical
care. Households paying more than thirty percent of their incomes for rent are considered rent
overburdened; and
WHEREAS, according to HUD, an estimated twelve million households in the United
States pay more than fifty percent of their annual incomes for housing; and
WHEREAS, also according to HUD, a family with one full-time worker earning the
minimum wage cannot afford the local fair-market rent for a two-bedroom apartment anywhere
in the United States; and
WHEREAS, all areas of the state, but especially Davidson County and its greater
metropolitan area, are struggling with a shortage of affordable housing; and
WHEREAS, in 2015, Nashville had a shortage of 18,000 affordable units. The housing
report, "Housing Nashville," released in May 2017, estimated that Nashville's housing shortage,
if no new units are added, will rise to almost 31,000 units by 2025 based on Nashville's current
rate of growth; and

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WHEREAS, the Tennessee Housing Development Agency (THDA) in its report, "Aging
Affordable Rental Housing in Tennessee and the Need for Preservation," stated that "Cities in
the south where population growth has been high in recent years are facing a particular
shortage of affordable options at differing income levels, and the shortage is likely to worsen";
now, therefore,
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:
SECTION 1. Tennessee Code Annotated, Title 67, Chapter 5, is amended by adding
Sections 2 through 9 as a new part:
SECTION 2. This act shall be known as the "Affordable Rental Property Act."
SECTION 3.
(a) The general assembly finds that the increased market value of certain rental
housing has caused an increase in taxes to the extent that owners cannot afford to pay
the taxes and other expenses of the properties, if they rent to low-income persons at the
below market rates generally charged for affordable rental housing.
(b) It is the policy of this state to encourage rental housing owners to provide
affordable rental housing for the benefit of low-income persons.
SECTION 4. As used in this part:
(1) "Owner" means an owner of rental housing. "Owner" includes individuals
and legal entities that own affordable rental housing. "Owner" does not include any
owner of rental housing who participates or has participated in a subsidized federal or
state housing program, including voucher programs, or whose rental housing was
constructed using low income housing tax credits;
(2) "Relative" means a spouse, parent, child, son-in-law, daughter-in-law,
grandparent, grandchild, brother, brother-in-law, sister, sister-in-law, uncle, aunt,
nephew, or niece of an owner. "Relative" includes a parent, child, son-in-law, daughter-
in-law, grandparent, grandchild, brother, brother-in-law, sister, sister-in-law, uncle, aunt,

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nephew, or niece of the owner's spouse and a relative by a foster or adoptive
relationship with an owner; and
(3) "Rental housing" means property that is suitable for and can be legally used
as a dwelling by tenants. "Rental housing" includes the curtilage of the dwelling, but
does not include any structures or improvements to real property that may not be used
by the tenants of the dwelling. "Rental housing" may contain one (1) or more dwelling
units.
SECTION 5.
(a) The Tennessee housing development agency (THDA) shall annually
research the availability of affordable rental housing in each county of the state and
determine which counties have a shortage of affordable rental housing.
(b) For counties having a shortage of affordable rental housing, THDA, by
November 1 of each year, shall set:
(1) Annual county income limits for the following year that qualify different
sizes of low income households for affordable rental housing for the purposes of
this part; and
(2) Monthly rental rates that may be charged for affordable rental housing
during the following year in each county having a shortage of affordable rental
housing. The monthly rental rates shall be based on the size of the rental unit
and the income limit for the size of a low income household.
(c) THDA shall provide the assessor of property in any county having a shortage
of rental housing and the state board of equalization with the applicable income limits
and monthly rental rates produced under subsection (b). THDA shall also provide the
inf