(C) Tennessee Lookout This story was originally published by Tennessee Lookout and is unaltered. . . . . . . . . . . Report identifies single-family zoning as hurdle in making Tennessee's housing market affordable • Tennessee Lookout [1] ['Adam Friedman', 'Anna Claire Vollers', 'More From Author', '- June', '.Wp-Block-Co-Authors-Plus-Coauthors.Is-Layout-Flow', 'Class', 'Wp-Block-Co-Authors-Plus', 'Display Inline', '.Wp-Block-Co-Authors-Plus-Avatar', 'Where Img'] Date: 2024-06-04 From Jefferson to Davidson to Shelby Counties, Tennessee has a housing affordability problem as the demand for new homes has outpaced supply, a new report from the state’s intergovernmental agency details. Since 2019, Tennessee’s median home price has risen by 44%, surpassing the national average of 34% as tracked by the U.S. Federal Reserve. The problem isn’t isolated to fast-growing counties and cities, the Tennessee Advisory Commission on Intergovernmental Relations (TACIR) said in its report approved by commission members last week, but across the state, adding more people are seeking to buy a limited supply of homes, driving up prices and putting the cost “out of reach for many.” TACIR identified zoning, particularly single-family zoning, as one of the driving factors impacting the number of new homes that are built. Single-family zoning is a type of land regulation that prevents homeowners from building more than one housing unit on a property. This type of regulation makes it harder for developers to build apartments or even split properties into multiple units. It ultimately restricts the number of people who can live in certain neighborhoods and communities, creating intense competition for fewer homes and driving up prices. Zoning has become a bipartisan issue, with states like Democratic-controlled California and Republican-controlled Montana adopting laws requiring city and county governments to remove many of the regulations around building new homes. Ron Shultis, a policy researcher with the conservative think tank Beacon Center of Tennessee, said the state’s single-family zoning creates a housing affordability crisis and that rents are increasing slower in cities like Minneapolis, which have abolished the policy. “You can see the results when you put in best practices and allow for essentially the market to do what it does best, which is to meet a demand,” Shultis said. Impact fees on housing costs State and local lawmakers on the TACIR commission board received the housing draft report during its quarterly meeting in Nashville held at the end of May. Republican State Rep. Mike Sparks of Murfreesboro initiated the report by asking the commission to study the potential effect of impact fees on housing prices. “I don’t know if it will help us keep our property taxes down,” Sparks said. “But to solve the problem, we have to have a discussion.” Lobbyists for the state associations for realtors and homebuilders have consistently blocked the implementation of impact fees by counties — which require a bill from state lawmakers to go into effect — over concerns that it would increase the prices of the homes those groups are building and selling. Impact fees, a one-time charge to builders, would at least initially be paid for by developers but part of the cost would likely be passed on to new home buyers. County and city governments in fast-growing communities have wanted to implement or increase impact fees, instead of raise property taxes, to pay for new roads, schools and public safety costs that come with larger populations. The draft report found impact fees have a minimal impact on the cost of housing, but along with the urging of several other members of the commission, used the opportunity to study the growing issues statewide with the housing market. Higher prices, larger tax bills The increased price of new homes has allowed many counties, but not all, to reduce their overall property tax rates. But the amount of real dollars homeowners pay in those taxes has increased as home values grow faster than the value of real estate and property owned by businesses, leaving homeowners to shoulder more of the tax burden. This comes as many property owners have seen the value of their homes, whether in good condition or not, rapidly increase for several years, sometimes even doubling in value because of housing supply shortages driving up demand. Homeowners are then left in a dilemma, where on paper, they can sell their homes for more money but likely can’t find a cheaper place to live. This has particularly impacted older and retired homeowners living on fixed incomes. Those owners can apply for property tax freezes, but the income limits mean many don’t qualify. Other recommendations in the draft report include offering incentives to local governments to adopt zoning reforms, adding more money to the state’s housing trust fund and adopting policies to mitigate the impact of any reform an individual’s property taxes. The full draft report [END] --- [1] Url: https://tennesseelookout.com/2024/06/04/report-identifies-single-family-zoning-as-hurdle-in-making-tennessees-housing-market-affordable/ Published and (C) by Tennessee Lookout Content appears here under this condition or license: Creative Commons BY-ND 4.0. via Magical.Fish Gopher News Feeds: gopher://magical.fish/1/feeds/news/tennesseelookout/