HB 2509 establishes Tennessee's Community Workforce Housing Innovation Pilot Program, administered by the Tennessee Housing Development Agency. It authorizes the agency to provide loans for constructing or rehabilitating workforce housing affordable to households earning no more than 150% of area median income, prioritizing projects that set aside at least 80% of units for workforce housing. The program requires applicants to form public-private partnerships and contribute at least 10% of project costs through grants or land donations, with funding targeted to all three grand divisions and projects near employment centers. Projects must demonstrate regulatory incentives (like streamlined permits) or innovative features (e.g., mixed-use design) to qualify for loans.
HB 753 establishes new rules for taxing multi-unit rental properties (4+ units) that receive federal, state, or local incentives tied to low-income renter restrictions. It requires property assessors to value these properties using specific methods, including adjusting market value based on rent ratios and excluding tax credits, while applying a capitalization rate 50-150 basis points above standard rates. Owners must notify assessors about restrictions by December 31 each year, or face tax penalties. The law takes effect for tax year 2026 and applies to properties developed on or after that date.
SB 539 establishes new rules for taxing multi-unit rental properties (four or more units) that receive federal, state, or local incentives tied to low-income housing restrictions, such as tax credits or rent subsidies. Property owners must notify local assessors by December 31 each year if their property has such restrictions, and assessors must value these properties using specific methods - including adjusting for rent differences between restricted and non-restricted units and excluding tax credits from valuation. The bill requires a higher capitalization rate (50-150 basis points above the national average) for these properties to reflect their reduced market value, with rules taking effect for tax year 2026. This directly affects owners of qualifying rental housing and property assessors statewide.
HB 1892 allows housing authorities, industrial development corporations, and community redevelopment agencies in Tennessee to require property owners in designated redevelopment areas to make payments securing the agencies' bonds. These payments create a recorded lien on the property that takes priority over all existing and future mortgages or liens, treated like property taxes for enforcement. The agreement must include specific details like property description and owner names when filed with the county, and the lien remains with the land even if other debts are paid.
HB 691 changes how Tennessee financial institutions calculate tax credits for loans to housing entities. It shifts the calculation from a single "unpaid principal balance" to a "month-end average unpaid principal balance" over each loan's life. This affects financial institutions providing qualified loans for eligible housing activities, with credits now set at 3% annually for standard loans or 5% for low-rate loans. The change applies to the institution's fiscal year and ends after 15 years or the loan's maturity, whichever comes first. The bill took effect January 1, 2026.
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 207 creates a new "farmland preservation fund" within Tennessee's state budget to support the long-term protection of agricultural and forested land. The fund provides grants to help farmers and foresters place permanent conservation easements on their property - legal agreements that prevent development while allowing farming or forestry activities. These grants can be awarded directly to landowners or to qualified nonprofit organizations (like 501(c)(3) groups) that hold the easements, with requirements including proof of the easement agreement and ongoing agricultural use. The Tennessee Department of Agriculture will manage the fund, and unspent money will carry forward annually instead of reverting to the general budget.
SB 773 prevents development permits from expiring when lawsuits challenge them. It pauses the "vesting period" (the timeframe protecting approved projects) during ongoing court cases, ensuring developers retain their project rights. This directly affects property developers and construction companies with permits facing legal disputes. The law creates certainty for development timelines by halting the expiration clock while litigation proceeds.
SB 110 expands an existing residential pilot program for people with disabilities to include the eastern part of Tennessee, which previously only covered the western and middle regions. It requires one facility in each grand division (eastern, middle, western) and sets specific eligibility rules for eastern division participants, including a minimum 26-acre property in a county with 108,600-108,700 residents (per 2020 census), offering services for up to 60 additional adults with intellectual/developmental disabilities, and dedicating 25% of homes to inclusive housing. Applications for eastern division participation must be submitted by March 31, 2026, with facilities needing completion by June 30, 2028. The bill modifies licensing and reporting requirements for these facilities under Tennessee’s disability and aging department.
HB 496 amends Tennessee's ABLE (Achieving a Better Life Experience) account rules to allow account earnings to be used for non-education expenses, such as housing or transportation, rather than being restricted to education costs. It aligns Tennessee's definitions of "disability certification" and "eligible individual" with federal Internal Revenue Code standards. The bill directly affects Tennesseans with disabilities who use ABLE accounts to manage savings without losing federal benefits. Key changes include removing the education-only spending restriction and updating account ownership rules to match IRS guidance. The law became effective May 2, 2025, with some provisions taking effect January 1, 2026.
