Housing (Historic Preservation)

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 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).)