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Later this month, Metro director of legislative affairs Darren Jernigan plans to bring together representatives from Mayor Freddie O’Connell’s office and the departments of planning, codes, water, transportation and other city leaders for a roundtable discussion as Metro seeks to figure out how to take advantage of nearly a dozen bills recently passed by the Tennessee General Assembly that could help boost the city’s affordable housing stock.
“We’re happy and encouraged with the bills that came out of the General Assembly,” says Jernigan, who had a front-row seat as both an outgoing state representative and O’Connell’s agent on Capitol Hill. “We’re getting everybody in the room for the first time to see which ones are practical, which ones we can do, and go full force for it, and hopefully by the summer we’ll have some legislation out there.”
Of the bills, two are attracting particular attention.
SB2496/HB2623
This legislation allows local governments “to create a voluntary attainable housing incentive program.” The local government is tasked with defining “attainable housing” and then detailing what sort of incentives can be offered to developers who include that type of housing in a project — think density bonuses, setback or parking exemptions or other incentives that could help a developer maintain profit margins while including “attainable housing.”
Some see this as a backtrack from the state legislature’s 2018 preemption of a Metro policy requiring builders to include affordable units.
The bill had both Republican and Democratic sponsors.
“We have a lot of housing problems,” says Rep. Dale Carr, a Republican who represents the tourist destination of Sevierville and who was the lead House sponsor. “It’s hard for [seasonal workers] to pay a big, high rent when they come and try to rent something to work in the county. We’re short on housing also, so we’re trying to build as many affordable houses and apartments that we possibly can.”
Think Tennessee, a nonpartisan think tank, helped draft and advocate for the legislation. Adriane Harris, the group’s senior adviser on housing policy, worked for Metro when the preemption policy initially passed.
“We see this as a great opportunity for cities to really think about what’s a part of their current toolbox and how they can use this tool now that they have it, given that they didn’t have it in the last several years,” Harris tells the Banner. “Rural communities and suburban communities throughout the state are facing an affordable housing crisis, so it’s no longer just the urban areas that are having to really figure this out.”
Metro Councilmember At-Large Burkley Allen, who sponsored the preempted Nashville ordinance, says she plans to study the bills and work on new legislation based on the freshly granted powers.
“They are now hearing from the smaller towns and rural counties that it’s an issue there as well,” Allen says of state lawmakers. “What was originally perceived as something that only affected the big four cities is now an issue all the way across the state.”
SB1137/HB1229
This bill came to lawmakers via Matt Wiltshire, the former Metro official who finished third in last year’s mayor’s race.
He tells the Banner that he was figuring out what to do after the campaign when he learned about a program in Charlotte, N.C., where social impact investors work to preserve existing affordable housing with the help of the local government.
The legislation effectively designates affordable housing as a “public purpose” so that a local government like Metro could use its Industrial Development Board to help private developers finance housing projects.
This bill was also bipartisan, as Carr signed on as a co-sponsor, with Nashville Democrats Rep. Caleb Hemmer and Sen. Charlane Oliver leading the way.
“There was bipartisan interest, which is encouraging in such a divided state government,” Wiltshire says. “This seemed to be an area where there were opportunities for folks to come together. This is an issue that has spread across the state.”
Wiltshire was recently named president of the newly created Pathway Affordable Housing Corp., an arm of community development financial institution Pathway Lending, where he says he hopes to take advantage of the new model as long as Metro chooses to participate.
“Rep. Hemmer and I, we got together on that Nashville bill because it’s going to help Nashville on what they’re wanting to do with their housing,” Carr adds. “He’s a good guy, but they needed some more help on that to make sure that we can get it through the legislature.”
Other bills
Jernigan plans to discuss several other new pieces of legislation with city leaders:
SB1694/HB1814: Requires landlords to provide some transparency to tenants. (Other bills passed this year weaken tenants’ rights.)
SB2315/HB2368: The Residential Infrastructure Development Act authorizes local governments to establish infrastructure development districts to help fund infrastructure work.
A procedural vote on the East Bank Development Authority turns into Republicans’ punching bag
SB1000/HB1046: The Tennessee Rural and Workforce Housing Act does not fund a state low-income tax credit program but creates a framework to do so in the future.
SB2635/HB2787: Prohibits the state fire marshal from mandating sprinkler systems for certain multifamily dwellings and requires the fire marshal to allow local governments to amend building codes for three- and four-unit dwellings.
HB2984/SB2968: The East Bank Development Authority bill.
SB1735/HB1807: Requires the state fire marshal or other state entities to conduct requested inspections within 10 business days.
SB2117/HB2261: Changes the regulatory framework for senior housing developments.
SB2639/HB2553: Clarifies new rules about foreign ownership of Tennessee properties.
SB2550/HB2624: Changes the law relating to local governments selling properties for delinquent taxes.
Lawmakers say they aren’t done addressing affordable housing yet (though neither Jernigan nor Carr is running for reelection).
Hemmer worked on unsuccessful efforts to reallocate both real estate transfer taxes and short-term rental taxes. He also highlighted a housing tax credit bill backed by House Republican Caucus Chair Jeremy Faison that did not pass this year.
“There are a lot of little things we can start to do,” Hemmer said. “My main hope is we start viewing this as a state issue that we need to tackle.”
