Legislative Declaration — Local Powers to Raise and Use Funds — Use of State Loan Ceiling
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It is hereby found and declared that there continues to exist throughout the state a seriously inadequate supply of decent, safe and sanitary dwelling accommodations, primarily accommodations for persons and families of lower and moderate income. This condition is contrary to the public interest and threatens the health, safety, welfare, comfort and security of the people of the state and is inimical to the sound growth and the development of its communities. An adequate supply of housing of a variety of housing types serving persons and families of all income levels and properly planned and related to public transportation, public facilities, public utilities and sources of employment and service is essential to the orderly growth and prosperity of the state and the state's communities. Present patterns and methods of providing housing unduly limit the housing options for many persons in the state.
It is further found and declared that one (1) major cause of this condition has been recurrent, cyclical shortages of funds in private banking channels available for residential mortgages. Such shortages contribute to reductions in construction starts of new residential units. In addition, these cyclical shortages make the sale and purchase of existing residential units difficult in many parts of the state, especially by those persons of lower and moderate income. The ordinary operations of private enterprise have not in the past corrected these conditions.
It is further found and declared that the reduction in residential construction starts associated with such shortages causes a condition of substantial unemployment and underemployment in the construction industry that results in hardships to many individuals and families, wastes human resources, increases the public assistance burdens of the state, counties, and municipalities, impairs the security of family life, impedes the economic and physical development of counties, cities and communities and adversely affects the welfare and prosperity of all the people of the state. A stable supply of adequate funds for residential mortgages is required to spur new housing starts in an orderly and sustained manner and thereby to reduce the hazards of unemployment and underemployment in the construction industry. The unaided operations of private enterprise, especially during periods of cyclical shortages of capital, have not always been able to meet and cannot always meet the need for a stable supply of adequate funds for residential mortgage financing.
It is further found and declared that these conditions associated with such recurrent shortages of residential mortgage funds contribute to the persistence of slums and blight and to the deterioration of the quality of the environment and living conditions of a large number of persons residing in the state of Tennessee, have adversely affected the economy of the state as a whole and of the counties, cities and communities in the state, and are contrary to the declared policy of the state to promote a vigorous and growing economy, to prevent economic stagnation, to increase revenues to the state and to its counties, cities and other communities, and to achieve stable local economies.
Based upon the experience of the past, shortages of funds for residential mortgages in the private investment system can be expected to recur from time to time in varying degrees of severity with the adverse consequences described in subsections (a)-(d). To bring greater stability to the residential construction industry and related industries, and thus to assure a steady flow of production of new housing units, counties or metropolitan governments having a population of two hundred thousand (200,000) or more, according to the 1980 federal census or any subsequent federal census, shall be given the power to raise funds from private investors through issuance of bonds and notes to:
Make funds available for permanent mortgage financing of housing for lower and moderate income persons and families;
Purchase existing mortgages from lending institutions within the state and direct an amount equal to the proceeds from the liquidated mortgage investments into new mortgages on residential housing for lower and moderate income persons and families;
Enter into advance commitments with lending institutions to purchase mortgage loans for housing for lower and moderate income persons and families made to such persons and families;
Make loans to lending institutions that require that substantially all of the proceeds of the loans be used for the making of mortgages for housing for lower and moderate income persons and families;
Make “qualified home improvement loans” not to exceed fifteen thousand dollars ($15,000) per dwelling unit to finance alterations, repairs and improvements on or in connection with the existing residence by the owner of the residence, but only if such items substantially protect or improve the basic livability or energy efficiency of the property; and
Make funds available for housing loans for veterans who qualify as persons and families of low and moderate income by including in each issue of bonds sold under this chapter a United States department of veterans' affairs guaranteed loan program.
The general assembly hereby finds that the interests of the citizens of the state and the purposes of this chapter shall be best served by, and it is hereby determined that the state ceiling, as defined in the federal law, applicable to the state for any calendar year pursuant to the federal law shall be allocated among the governmental units in the state in accordance with title 9, chapter 20.
The general assembly further finds that the authority and powers conferred under this chapter and the expenditure of public moneys pursuant to this chapter constitute a serving of a valid public purpose and that the enactment of the provisions set forth in this chapter is in the public interest and is hereby so declared to be such as a matter of express legislative determination.