Policy Update 2-23-22 – North Carolina Housing Coalition

Federal Updates

LIFELINE Act Introduced by Reps. Adams and Rouzer
U.S. Representatives Alma Adams and David Rouzer (both of NC) introduced the LIFELINE Act, H.R. 7078, to address barriers to using State and Local Fiscal Recovery Funds (SLFRF) for LIHTC. The LIFELINE Act will enable states and localities to use recovery funds to make long-term loans to Housing Credit developments.

State and Local Fiscal Recovery Funds were allocated through the American Rescue Plan Act to be a flexible source of funds for states to use towards COVID-19 economic recovery. North Carolina is one of approximately 20 states that allocated a portion of these funds to affordable housing.

However, the U.S. Treasury issued guidance in January requiring all funds to be expended by December 31, 2026. This presented a barrier for LIHTC because it made loans with maturities after 2026 infeasible. The LIFELINE Act will remove statutory barriers preventing localities from using recovery dollars to support LIHTC and affordable housing developments, specifically.

In North Carolina, the bill would allow the $170 million already allocated to the Workforce Housing Loan Program to be used as intended for LIHTC projects throughout the state.

Senator Patrick Leahy (D-VT) is expected to introduce companion legislation in the Senate soon and is seeking a Republican co-sponsor to join him. Now is the time to call your House member, Senator Thom Tillis, and Senator Richard Burr to ask them to sign on to this critical legislation.

The full bill title is LIHTC Financing Enabling Long-term Investment in Neighborhood Excellence (LIFELINE) Act.

FY22 Federal Budget Passed by Congress
Congress passed the final FY22 spending bill shortly before its deadline of midnight on Friday, March 11. The passage of the $1.5 trillion budget ends a series of continuing resolutions (CR) that the government had been operating under since October.

Housing programs through HUD received a budget increase of $4 billion compared to FY21.

Funding levels to note include:

$200M for 25,000 new Housing Choice Vouchers
$4.84B for CDBG (+$1.37 billion over FY21)
$1.5B for HOME Investment Partnerships program (+$150 million over FY21)

A more detailed budget analysis can be found on the Coalition’s website.

While it is the largest increase in recent years, it’s less than what was initially proposed by the White House, House and Senate. Additional investments are still needed to address the country’s housing crisis, similar to those proposed in Build Back Better.

$740 million announced for National Housing Trust Fund
In late February, the Federal Housing Finance Agency (FHFA) announced that the National Housing Trust Fund will receive $740 million in 2022 from Fannie Mae and Freddie Mac. This is a $29 million increase from the previous year.

State Updates

Technical Correction for LIHTC Passed by NCGA
At the end of its long session, the NC General Assembly passed a technical corrections bill with changes to the budget and other recent legislation. It includes a provision that clarifies the use of federal State and Local Fiscal Recovery Funds for the Workforce Housing Loan Program (which funds LIHTC projects). The correction allows funds to be used as grants in accordance with Treasury guidance, instead of solely as loans. This provides a layer of flexibility in response to the Treasury rule that limited the way State and Local Fiscal Recovery Funds could be used for LIHTC. This means that when federal measures in the LIFELINE Act are passed by Congress, funds can be deployed in NC without further state action.

$436M donated to Habitat for Humanity by MacKenzie Scott, including 8 NC Habitats
Habitat for Humanity received $436 million in unrestricted giving from author and philanthropist MacKenzie Scott. Eight North Carolina Habitat affiliates received transformational donations as part of 84 Habitat affiliates that were included, along with Habitat for Humanity International. The sum represents the largest publicly disclosed donation from the billionaire philanthropist since she pledged to give away the majority of her wealth in 2019.

Local Updates

Buncombe County Announced up to 3,150 Affordable Homes by 2030
Buncombe County will commit to creating or preserving between 2,800-3,150 affordable housing units by 2030, requiring new county investments of ~$54 million. The breakdown of planned affordable units include:

1,850 affordable rental homes affordable at 80% AMI or less
Of those, at least half will be affordable at 60% AMI
At least 200 will be affordable at 30% AMI
400 ownership units for those earning 80% AMI or less
400 units for either ownership or rent by those earning 80%-120% AMI
500 existing affordable homes will be repaired

Housing Highlighted as Top Issue for Asheville
Asheville Mayor Esther Manheimer highlighted homelessness and the lack of affordable housing as the city’s top issue during her State of Asheville address this month.

Permanent Supportive Housing Planned for Raleigh
A new permanent supportive housing development is planned for Raleigh. King’s Ridge will have 100 apartments for individuals and families experiencing homelessness. The project will provide low-barrier, stable housing for residents. Households will pay one-third of their income towards rent and can stay in their homes as long as they would like.

$12.1M Investment From Banks Announced with Cape Fear Collective
Live Oak Bank, First National Bank, First Citizens Bank, First Bank and Dogwood State Bank announced a $12.1 million investment with Cape Fear Collective to support affordable housing in Wilmington.

Reports/Articles/Events

Joint Center for Housing Studies of Harvard University –