Developers could avoid Nashville TN real estate over affordable housing mandate

Developers could avoid Nashville TN real estate over affordable housing mandate

People are packing into Nashville, and the city needs more places for those people to live.

Bureaucrats and burdensome regulations may keep that from happening.

Whether developers continue to build Nashville TN real estate — or just avoid the city altogether — may hinge on the outcome of a lawsuit filed by a Nashville-based think tank.

If they wanted, Nashville officials could get this matter resolved quickly.

Instead, they’re using fancy legal maneuvers to stall and keep the lawsuit in limbo, said members of the Beacon Center of Tennessee, the free-market think tank suing the Nashville Metro Government.

At the heart of the lawsuit, Beacon says, Nashville officials broke Tennessee law when they passed an ordinance requiring that apartment developers building five or more units make affordable housing available. The ordinance pertains to apartment developers who request a zoning variance to further develop their properties.

Braden Boucek (photo courtesy of the Beacon Center of Tennessee)

State officials enacted a law last year forbidding municipalities from forcing developers to have affordable housing in new residential developments, according to the Tennessean.

Beacon Director of Litigation Braden Boucek told Tennessee Watchdog that Metro lawyers simply asked for a month-long continuance.

“Even though they were causing a delay, they would not agree to not enforce the law on the homebuilders,” Boucek said.

Beacon President Justin Owen believes a month is unnecessary.

“They wanted an extension to file their reply brief, but it should be very quick and easy. It’s something you typically have two days to file, but they asked for a month,” Owen said.

“Obviously that is just a drawn-out thing.”

State officials, Owen and Boucek went on, have no mechanism to force Nashville officials to abide by state law — hence the reason for the lawsuit.

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“It’s possible the state could withhold funding in certain circumstances, but typically withholding funding from a city has to have a direct tie to whatever it is that they are acting on,” Owen said.

“Let’s say they are ignoring state law more broadly on something like the affordable housing issue. Well, then, you’ll have trouble finding funding that flows from the state to the city that you can withhold that is relevant to that subject. That is why we think this is an important lawsuit.”

Sean Braisted, spokesman for Nashville Mayor Megan Barry, said he cannot discuss pending litigation.

None of the Mero Council’s 40 members returned messages seeking comment on the matter.

Nashville officials getting their way would drive up costs, Owen said.

On top of that, people who want to build homes and provide places for people to live in the city may sit on the sidelines, he added.

“Based on some of the conversations I’ve had, I can tell you this has prevented some people from coming in and building more homes in Nashville. They want to see how this plays out, ,and they won’t develop because of the uncertainty and the costs involved with complying with this mandate,” Owen said.

“There is a reason the state stepped in and said you cannot have affordable housing mandates. This is not California.”

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And at the end of the day, this is also about the rule of law, Owen said.

Megan Barry (photo courtesy of Facebook)

Metro Council Member Burkley Allen told the Tennessean the Metro ordinance isn’t a mandate and is instead “a voluntary inclusionary zoning policy based on development incentives.”

The requirement is only triggered, Allen told the paper, when a developer chooses to apply for new development rights.

Owen, though, said it’s difficult, if not impossible, for a developer to build without some type of variance.

“In addition to that, this is a condition. Requiring a builder to give up a right to build in exchange for a condition that they build a certain percentage of their homes as affordable is unconstitutional, regardless, of how the city wants to frame it.”

A recent Tennessean story said the city added more than 36,000 people the past year.

Owens said the solution to Nashville’s affordable housing problem is simple: The city should get out of the way and allow developers to build more homes.

Contact Christopher Butler at chris@tennesseewatchdog.org

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