Housing (Land Use)

SB 1908, the "Tennessee Private Property Vesting Rights of 2026," requires public entities (like cities or counties) to pay property owners just compensation when new land use regulations reduce a property's fair market value. It exempts regulations related to public health/safety (e.g., building codes), federal requirements, or common nuisances. Property owners must submit a written demand within three years of the regulation's enactment and can choose either compensation or a modification of the regulation. This applies to properties acquired after the regulation's adoption, not to pre-existing rules.

SB 1771 would allow counties with populations under 341,500 (per 2020 census) to prohibit municipalities from enforcing zoning rules outside their city limits. If a county passes a resolution approving this, any existing zoning ordinances applied beyond municipal boundaries become invalid. The bill requires counties to adopt this resolution via majority vote, but does not apply to metropolitan counties or prevent counties/municipalities from making interlocal agreements for ongoing projects. This directly affects local governments' authority over land use planning in unincorporated areas.

HB 1837, titled the "Tennessee Private Property Vesting Rights of 2026," entitles property owners to just compensation from public entities when land use regulations (like zoning or development rules) reduce a property’s fair market value. It applies to owners of real property acquired after the regulation’s enactment, requiring public entities to pay compensation equal to the value loss upon written demand. Key exclusions include regulations protecting public health/safety (e.g., fire codes), federal compliance, or common law nuisances, with the public entity bearing the burden to prove exemptions. Owners must file claims within three years of the regulation’s enactment or a related land use application, and can seek attorney fees if compensation isn’t paid within 90 days of demand.