Monday, April 3, 2017

State legislature to stop Nashville's rental price-fixing policy from taking effect.

Thanks to the State legislature, Nashville again is being stymied in becoming the beacon of liberalism it would like to be. It we are not yet the San Francisco of the South, it is thanks to the State legislature. In September of 2016 the Metro Council passed SUBSTITUTE BILL NO. BL2016-133  which  was a rental housing price-fixing measure often called "inclusionary zoning." The bill passed unanimously.  While there is a small handful of self-identified Republicans in the Council, they almost always vote just like everyone else.  This would have been an opportunity for those Republicans to take a principled stand against a very liberal proposal, but they did not. The "conservatives" in the metro council routinely vote for things like limousine price-fixing and rental price-fixing and corporate welfare and seldom take a stand against Nashville's liberal policies.

Proponents of the Council's inclusionary zoning bill will tell you that it is really not inclusionary zoning, because technically it does not mandate that a developer build affordable housing.  Before Nashville passed its version of inclusionary zoning, the State legislature had already passed a bill to prohibit cities from mandating that a portion of any new construction had to be set aside as "affordable."  The law tried to make it clear that a city could not mandate directly or indirectly that a portion of housing had to be set aside for work-force or affordable housing.

Nashville's mayor and metro council and planning bureaucrats thought they would work around the intend of the State legislature.  The plan devised by Nashville did not mandate directly but set conditions that made it almost impossible to develop rental housing without  sitting aside affordable units. Nashville's version of inclusionary zoning, scheduled to take effect in June of this year, said that any developer seeking to build five or more rental units and who requested a zoning variance of any kind would have to include a percentage of affordable housing.  A variance may allow greater height, for instance, than allowed by the standard zoning.  In order to make the math work and the development possible almost all developers of rental complexes have to get a variance.

Glen Casada is sponsoring a bill that would prohibit Nashville's version of inclusionary zoning. Below is the bill summary from the State legislative website.

Bill Summary

Present law:

(1) Prohibits a local governmental unit from enacting, maintaining, or enforcing any zoning regulation, requirement, or condition of development imposed by land use or zoning ordinances, resolutions, or regulations or pursuant to any special permit, special exception, or subdivision plan that requires the direct or indirect allocation of a percentage of existing or newly constructed private residential or commercial rental units for long-term retention as affordable or workforce housing; and
(2) Authorizes a local governmental unit to create or implement an incentive-based program designed to increase the construction and rehabilitation of moderate or lower-cost private residential or commercial rental units.

This bill rewrites (1) and (2) above as follows:

(1) Prohibits a local government unit, or any subdivision or instrumentality thereof, from enacting, maintaining, or enforcing any ordinance, resolution, regulation, rule, or other requirement that:

(A) Requires the direct or indirect allocation of existing or newly constructed private residential or commercial rental units to be sold or rented at below market rates;
(B) Conditions any zoning change, variance, building permit, or any change in land use restrictions or requirements, on the allocation of existing or newly constructed private residential or commercial rental units to be sold or rented at below market rates; or
(C) Requires a person to waive the person's constitutionally protected rights related to real property in order that the local government unit can increase the number of existing or newly constructed private residential or commercial rental units that would be available for purchase or lease at below market rates within the jurisdiction of the local government unit; and

(2) Authorizes a local government unit to create or implement a purely voluntary incentive-based program designed to increase the construction or rehabilitation of workforce or affordable private residential or commercial rental units, which may include providing local tax incentives, subsidization, real property or infrastructure assistance, or any other incentive that makes construction of affordable housing more economical, so long as no power or authority granted to the local government unit to regulate zoning or land use planning is used to incentivize or leverage a person to develop, build, sell, or rent housing at below market value.

This bill declares as void and unenforceable any local regulations that are in conflict with this bill.
I have spoken with Glen Casada about this issue from time to time and am pleased that he has taken the action he has taken.  If there is one person who gets the credit for keeping Nashville a relatively sane city, it is Glen Casada. 

I was never convinced that Nashville's version of inclusionary zoning would take effect.  Even before the Council passed the plan, Casada and other legislators where aware of what was happening.  Also, if the State would not have acted, a law suit would have likely been filed challenging the legality of the measure. State legislation is a much more certain way to resolve this than a lawsuit. Casada's bill seems likely to pass.  It has already passed the house and is scheduled for a Senate committee action tomorrow.

For everything I have posted reporting on this issue follow this link.

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