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Committee advances amended REIT bill narrowing scope to single-family properties
Summary
After testimony from industry representatives and debate over market effects, the Commerce Committee approved an amendment narrowing HB 17-77 to single-family residential REITs and advanced the amended bill to Finance (17–6).
Representative Leatherwood offered a late amendment to HB 17-77 that narrowed the bill to apply only to REITs owning single-family residential properties and removed a property tax component from the original draft. He said the narrower scope responds to concerns raised during review and focuses the proposal on institutional single-family ownership.
Rob Del Priore, chief administrative officer at Mid America Apartment Communities, told the committee the proposed removal of the dividends-paid deduction would raise REITs' cost of capital and could reduce investment and redevelopment: "Without it, you're really adding a tax burden...it does raise the cost of capital, which means fewer projects, slower redevelopment, less investment," he said, urging the committee to keep the bill focused on a study of institutional ownership rather than removing the deduction.
Members debated whether the change would affect housing affordability or distort markets. Some members said Tennessee’s tax posture has made it attractive for REITs and institutional investors to buy single-family homes, potentially reducing owner-occupancy in some neighborhoods, while others cautioned about unintended consequences for sellers and development.
The committee voted to advance the amended bill to Finance; the clerk recorded the vote in the transcript as 17 ayes and 6 nays. The sponsor and opponents signaled they would continue engagement as the bill moves to the next committee.
