Tennessee Senate Bill SB0961

Tennessee 2025-2026 Regular Session

• Introduced: 2/5/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 7, Chapter 53; Title 9; Title 12; Title 13; Title 66 and Title 67, relative to housing.

Summary

SB0961, titled the “Affordable Housing and Tenant Protection Act,” makes several changes to Tennessee housing law. It would amend existing provisions in Title 66 to remove language limiting certain local-government housing incentives to nonresidential property and to clarify that local governments may create purely voluntary, incentive-based programs to encourage construction or rehabilitation of workforce or affordable private commercial rental units using tools such as tax incentives, subsidization, real property, or infrastructure assistance. It also adds a new section authorizing local governments, by a two-thirds vote of their legislative body, to adopt rent control ordinances for private residential property, including regulation of maximum rents and rental application fees. Before adopting rent control, a local government would have to make findings about housing supply, housing conditions, and the need for continued regulation; create or designate a local rent agency to administer the program; and establish an administrative and judicial appeal process for affected parties. The bill also creates a new state-level “increased housing program” within the Tennessee Housing Development Agency (THDA) to provide gap financing to developers and down-payment or closing-cost assistance to first-time homebuyers. The program would prioritize projects in communities affected by a federally declared disaster within the prior 12 months and would be funded through a new revolving fund in the state treasury.

Impact

The bill would significantly alter Tennessee’s housing policy framework by expressly allowing local rent control under specified conditions, which is a major departure from a more limited local regulatory approach. It would also expand local authority to use voluntary incentives for affordable and workforce housing, while creating a new THDA-administered grant and financing program for housing development and homeownership assistance. The measure would affect landlords, tenants, local governments, developers, first-time homebuyers, and THDA, and would establish new administrative procedures, reporting requirements, and a dedicated nonreverting fund.

Sentiment

Based on the bill text and the absence of recorded committee discussion or votes in the provided materials, the bill appears to be framed as a pro-housing affordability measure with a strong tenant-protection component. Its findings section reflects a policy rationale that housing shortages and rent increases justify government intervention, and the new THDA program is designed to expand supply and support homeownership. Overall, the bill’s tone is interventionist and supportive of affordability measures, though no formal vote history is available here to show legislative support or opposition.

Contention

The most notable point of contention is the authorization of local rent control, which is likely to be the bill’s most controversial provision because it would permit local governments to regulate private residential rents and rental application fees. Landlords, property owners, and some business groups would likely object to that authority, while tenant advocates and housing affordability supporters would likely favor it. A second potential area of debate is the scope of local government power and the administrative burden of creating rent agencies, conducting hearings, and providing appeals. The new state housing program may be less contentious, but questions could arise about funding, eligibility, and whether the program duplicates existing housing incentives.