Tennessee House Bill HB2509

Tennessee 2025-2026 Regular Session

• Introduced: 2/3/26
• Refer: 2/5/26
• Refer: 3/11/26
• Refer: 3/18/26
• Refer: 3/23/26
• Refer: 4/15/26
• Engrossed: 4/21/26
• Enrolled: 4/29/26
• Passed: 5/21/26
• Chaptered: 5/27/26

Caption

AN ACT to amend Tennessee Code Annotated, Title 7, Chapter 53; Title 13; Title 48, Chapter 101, Part 3; Title 56 and Title 67, relative to housing.

Summary

HB2509 creates a community workforce housing innovation pilot program to be administered by the state housing agency. The program is designed to expand affordable rental and homeownership opportunities for “essential services personnel” and other households earning up to 150% of area median income, using a mix of state and local funds, regulatory incentives, and public-private partnerships. The bill authorizes the agency to make loans for new construction or rehabilitation of workforce housing, establish an application and scoring process, and select projects that best meet the program’s goals. The bill directs the agency to prioritize projects in areas with the largest gaps between incomes and home prices and the fastest population growth, while also requiring at least one funded project in each grand division of the state. It also encourages local governments to adopt zoning and development incentives, financial tools, and land contributions to support these projects. The pilot program is temporary, with applications due by March 31, 2027, a required agency review by January 1, 2029, and a report to legislative committees on whether the program is meeting housing needs.

Impact

HB2509 would add a new state housing pilot program to Tennessee law and expand the role of the housing agency in financing workforce housing projects. It authorizes loans, rulemaking, local-government incentives, and potential interest forgiveness for qualifying projects, while also allowing local governments to use available affordable housing funds for households up to 150% of area median income. The bill affects state housing policy, local land-use and financing practices, and public-private development arrangements, but does not directly create a permanent entitlement or ongoing program beyond the pilot structure.

Sentiment

The bill appears to have broad support in committee and on the floor, with unanimous or near-unanimous favorable votes at multiple stages and only one recorded no vote in committee and seven no votes on final House passage. The pattern suggests general agreement with the bill’s goal of addressing housing affordability for workers and essential personnel through state-local-private collaboration. The absence of committee transcripts limits insight into detailed debate, but the voting history indicates the measure was viewed positively overall.

Contention

The main points of potential contention are likely the use of state and local funds, the extent of agency discretion in selecting projects, and the preference for developments that rely on local regulatory incentives and private contributions. The bill also targets households up to 150% of area median income, which may raise questions about whether the program is aimed at the most housing-insecure residents or a broader workforce population. Another possible issue is the requirement that projects be distributed across the state’s grand divisions, which could affect how limited funding is allocated among competing regions and proposals.