In light of the political changes happening across our state with the most recent midterm election, it is important to lift up key housing wins that made it through. In this most recent midterm election cycle, three local housing bonds passed in North Carolina.
In Buncombe County, two bonds were placed on the November 2022 ballot, one for open space, Greenways, and land conservation for $30 million, and another for Housing at $40 million. This bond measure passed with 62% of the vote.
During a June 2022 public hearing on the bond issues, leadership reiterated a key housing goal: To impact 2,800-3,150 affordable housing units by 2030. The focus of the bond funding will be on capital costs and aims to “increase construction of housing for people of low to moderate incomes.” Projects will be selected by the county’s affordable housing committee that oversees housing program funding.
The bond is estimated to cost households a maximum of $18 a year for 20 years according to the bond referendum sheet here.
The City of Charlotte bond referendum this year totaled $226,000,000, split between three categories: Housing, Neighborhood Improvements, and Transportation. The $50 million dollar bond for Housing will go to fund the Housing Trust Fund which is funded from voter-approved housing bonds and was established in 2001 to provide financing to developers for affordable housing. This bond measure passed with 74% of the vote.
The housing bond goal “increase the supply of safe, quality and affordable housing for low-and moderate-income residents throughout Charlotte.” In doing so the funds will support several areas such as:
- Multi-family new construction and rehabilitation
- Homeownership development in targeted neighborhoods
- Housing for seniors, disabled and homeless populations
- Acquisition of properties for developing mixed-income
The City of Fayetteville bond referendum this year totalled $97 million to support projects in public safety, public infrastructure, and housing opportunity. The housing bond totaled $12 million, and passed with 59% of the vote. The intended use for this bond according to the city’s website is to “support housing opportunity initiatives making Fayetteville a desirable place to live for all residents.” The city stated that the projects “could include a housing trust fund, homeownership programs, new housing initiatives, and innovative solutions to meet the critical housing needs of the community.” Last summer the city conducted a study of the affordable housing needs in partnership with the Triangle J Council of Governments. The study highlighted key needs but also proposed various strategies for the city to consider such as the creation of a housing trust fund with a dedicated revenue source, such as a general obligation bond.
For more information on the bond click here.
So what is a bond?
Bond financing, particularly general obligation (G.O.) bonds are often used for capital projects that are beyond the scope of a jurisdictions annual operating budget, or are for projects that will serve a public purpose and benefit residents for many years in the future. These general obligation bonds typically have the lowest interest rate for a local government due to the long-term borrowing. Article 5, Section 4(2) of the NC Constitution states that voter approval is required before a local government may borrow money and secure the loan by pledging taxing power, and G.S 159-48 lists what purposes bonds may be used for.
Permission for housing is granted in the subsection c, subdivision 6 of the statute for counties:
“Providing housing projects for persons of low or moderate income, including construction or acquisition of projects to be owned by a county, redevelopment commission, or housing authority and the provision of loans, grants, interest supplements, and other programs of financial assistance to these persons. A housing project may provide housing for persons other than low or moderate income if at least forty-percent (40%) of the units in the project are exclusively reserved for persons of low or moderate income. No rent subsidy shall be paid from bond proceeds.”
Permission for housing is granted in subsection d, subdivision 7 of the statute for cities:
“Providing housing projects for the benefit of persons of low income, or moderate income or low and moderate income, including without limitation (i) construction or acquisition of projects to be owned by a city, redevelopment commission, or housing authority, and (ii) loans, grants, interest supplements and other programs of financial assistance to persons of low income, or moderate income, or low and moderate income, and developers of housing for persons of low income, or moderate income, or low and moderate income. A housing project may provide housing for persons of other than low or moderate income, as long as at least twenty-percent (20%) of the units in the project are set aside for housing for the exclusive use of persons of low income. No rent subsidy shall be paid from bond proceeds.”
For more information about the different mechanisms that North Carolina counties and municipalities can choose from click here.
Bond Measures: A Nationwide, Bipartisan Tool
General obligation bonds and other financing mechanisms brought to the ballot are not new. In fact, these three bonds mentioned above are some of the many that were on the ballot in November across the nation. In a recent report by Moody’s Analytics, many of the proposals were approved by nearly 70% of the vote.
Only one statewide measure made it to the ballot this year, Prop 123 in Colorado, which dedicates 0.1% of state income tax revenue for affordable housing programs including aid to develop more housing and assistance for renters and homebuyers, creating a State Affordable Housing Fund.The bond measures on the ballot this year across the country varied in size and focus, but were largely accepted, indicating that housing not only is an important issue that people care about across the nation, but that investments and solutions can in fact have bipartisan support.
These measures are increasingly common, and are only one of the many ways that communities can connect and show up to meet the needs of the growing housing crisis. Congratulations to our North Carolina communities that passed these bond measures and are actively trying to address the need for affordable housing.
Let the good work continue.