Local governments limit what and where developers build through zoning laws and land-use restrictions. These regulations represent a tool for communities to manage growth, prepare for extreme weather and protect natural resources.
But starting next year, that could change in Tennessee.
State lawmakers are considering a bill that would allow property owners to sue governments for enacting land-use regulations.
The bill would work like this: A local government passes a zoning law or other restriction on land use on or after July 1, 2027. A property owner, including developers, can request an exemption to the law to change the use of their property. If the local government refuses, then the landowner can sue the government for lost property value plus attorney fees and costs.
“If government action takes value, the government bears the cost,” Tennessee state Rep. Tim Hicks, R-Gray, said during a House Judiciary Committee hearing Wednesday. Hicks, the bill sponsor and a housing developer, owns Hicks Construction Company near Johnson City.
The original bill may have allowed property owners to retroactively oppose established zoning laws, but the legislation was amended this week. Now, property owners would only be able to challenge new regulations within three years of adoption, starting next summer.
The legislation is otherwise largely the same: It shifts power to developers and creates financial liability for communities, according to Micah Wood, the Tennessee president of the American Planning Association, a group that represents professionals in urban and regional planning.
“In practice, this bill would function as an immediate freeze on zoning, land use, growth management, and farmland protection regulations across Tennessee,” Wood said. “Planning and zoning must evolve as communities grow and change.
Local governments need flexibility to update regulations.”
Community planning regulations are diverse. Local governments or even the state government may want to use land-use restrictions to address trends like the expansion of Airbnb and other short-term rentals. Laws for zoning different types of areas, like agricultural, residential and industrial, may be applied to prevent land conflicts, such as keeping landfills away from schools or factories separate from residential neighborhoods. In Nashville, communities have objected to proposed zoning changes that would allow dense housing in areas with climate-intensified flooding concerns.
These types of issues should be debated at the community level with public input, according to George Nolan, the Tennessee director of the Southern Environmental Law Center.
Instead, given the legal vulnerability and potential burden on taxpayers, communities could become afraid to pass new regulations.
“There will be a cottage industry of lawyers who specialize in suing local governments on behalf of landowners that are upset about zoning restrictions,” Nolan said. “Land use planning in Tennessee will become a thing of the past.”
The bill is scheduled to be heard by both the House Judiciary Committee and the Senate Judiciary Committee on Monday.
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