SB 961

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."