SB 2582 prohibits Tennessee local governments from adopting or enforcing zoning changes that reduce a property's value (like restricting building height or density), directly affecting property owners whose land value decreases due to such changes. Property owners can sue for compensation equal to the lost fair market value, calculated through an independent appraisal, or seek to stop the zoning change. Exceptions include regulations needed for public health/safety (e.g., flood zones), federal compliance (like the Fair Housing Act), or preventing nuisances. The law takes effect July 1, 2026, and requires local governments to pay compensation if they fail to provide it before a property owner sues.
HB 2068 prohibits Tennessee local governments from adopting or enforcing zoning changes that reduce a property's value ("downzoning"), such as limiting building density, height, or use. Property owners affected by such changes can seek compensation based on an independent appraisal showing the loss in fair market value. Exceptions allow downzoning for health/safety protections (like flood zones), federal law compliance (e.g., ADA), or compatible zoning overlays that don’t reduce residential capacity. The law takes effect July 1, 2026, and requires local governments to pay compensation if they fail to provide it before a property owner sues.
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.
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).)
