Housing

SB 480 (the "Tennessee Property Rights Protection Act") revises Tennessee housing law to protect non-blighted properties from eminent domain. It deletes the broad definition of "blighted areas" and replaces it with a property-by-property standard for "blighted property," ensuring only properties meeting specific safety/code violations (and not fixed within a reasonable time) can be targeted. Housing authorities can now acquire property without eminent domain through negotiated sales and pay above fair market value for non-blighted properties located in areas designated as blighted. These changes aim to prevent well-maintained properties from being taken while preserving housing authorities' ability to redevelop truly blighted properties. The law took effect on April 3, 2025.

SB 1313 changes Tennessee property development law by establishing a property owner's rights upon *submitting* a development plan or building permit, rather than waiting for local government *approval*. This affects developers and local governments, as it secures rights for three years starting from the submission date. The law requires plans to substantially comply with local ordinances, fixes development standards in place at submission for the entire vesting period, and shifts key terms from "approval" to "submission" throughout the code. The bill is now enacted (effective July 1, 2025), streamlining the timeline for project certainty.

SB 285 changes the legal standard debtors must meet to challenge foreclosure sale prices in Tennessee. It replaces the current "preponderance of the evidence" requirement with a higher "clear and convincing evidence" standard, making it harder for homeowners to prove their property was sold for significantly less than fair market value. This directly affects debtors seeking to rebut the legal presumption that foreclosure sale prices reflect fair market value. The bill amends Tennessee Code Annotated, Title 35, Section 35-5-117(c), and takes effect July 1, 2025.

SB 1173 revises Tennessee's property tax relief program for elderly, low-income homeowners by creating age-based reimbursement tiers. It provides property tax reimbursements ranging from 10% (at age 65) up to 100% (age 74+), calculated as a percentage of taxes paid on the assessed property value. The bill sets a $400,000 cap on eligible property value (adjusted annually for inflation using the CPI), and requires the comptroller to publish annual updates on the cap amount. This directly affects eligible elderly homeowners aged 65+ with low income who own property valued under the inflation-adjusted cap.

HB 396 would change Tennessee's housing law by shortening the required deed restriction period for affordable multi-family housing built under voluntary incentive programs. Instead of requiring affordability "in perpetuity," the bill would limit these restrictions to at least 30 years. This directly affects developers and property owners participating in the state's attainable housing incentive program. The bill failed in committee on February 19, 2025, and did not advance further. (Amends TCA Title 13, Chapter 3, Section 13-3-603(f).)

HB 331 amends Tennessee Code Annotated Section 13-23-121 to increase the Tennessee Housing Development Agency's (THDA) maximum bond issuance limit from $4 billion to $6 billion. This change directly enables THDA to issue more bonds for financing affordable housing loans, primarily benefiting low- and moderate-income Tennessee residents seeking below-market interest rate mortgages. The bill's key provision adjusts the statutory cap to address growing demand for these housing programs, which THDA has managed within the previous limit since 2008. The increase took effect on May 2, 2025, after receiving legislative and gubernatorial approval.