Tennessee Senate Bill SB0539

Tennessee 2025-2026 Regular Session

• Introduced: 1/30/25

Caption

AN ACT to amend Tennessee Code Annotated, Title 7; Title 13; Title 48; Title 49; Title 67 and Title 68, relative to low-income housing.

Impact

If enacted, the bill would significantly influence how multi-unit rental properties are valued for tax purposes, particularly those that receive government incentives for housing low-income residents. The new assessment methods delineated in the bill would require property assessors to consider actual income and operating expenses and adjust property value based on restrictions imposed by government incentives. This adjustment aims to better reflect the economic realities faced by owners of low-income housing, thereby potentially affecting tax revenues for local municipalities.

Summary

Senate Bill 0539 aims to amend various sections of the Tennessee Code related to low-income housing by establishing specific assessment methodologies for multi-unit rental housing subject to government restrictions. The bill introduces a new section to Tennessee Code Annotated, which outlines how properties should be assessed for taxation based on factors like net operating income, capitalization rates, and adjustments for government restrictions. This change is intended to provide clarity and stability for property assessors in determining the value of multi-unit rental properties while ensuring compliance with federally mandated low-income housing programs.

Sentiment

The sentiment surrounding SB 0539 is largely supportive among those advocating for affordable housing solutions, as it promises to create a more equitable taxation framework for low-income rental properties. Proponents argue that it could encourage the development of more affordable housing by alleviating some of the financial burdens currently faced by property owners. However, there are underlying concerns among some legislators and stakeholders regarding the potential impact of these assessments on local government revenue, particularly in areas where low-income housing is prevalent.

Contention

Notable points of contention revolve around the balance between supporting low-income housing initiatives and maintaining adequate tax revenues for local governments. Critics of the bill express worries that using a new assessment methodology could limit the financial resources available to municipalities, ultimately impacting local services. Furthermore, there are discussions on how the proposed changes might affect the broader housing market and the relationship between government support and the private rental market, with debates highlighting the need for careful consideration of all stakeholders involved.