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Housing Matters: House Budget Not Enough

Samuel Gunter, Director of Policy and Advocacy

Today, we were finally given a full glimpse of the North Carolina House of Representatives budget proposal and accompanying policy changes. Amendments were proposed in committee this morning, the budget should pass the House by the end of this week, and then it heads to conference committee. Like the Senate, the House’s budget proposal fails to meet the state’s affordable housing needs, however it does include positive policy changes that are a direct result of the Coalition’s work and the efforts of advocates like you.

Budget Numbers: Not Enough

With 1.2 million cost-burdened households and half a million North Carolina families spending more than 50% of their income only on housing, this investment is not enough.

After a steady, decade-long decline in the state’s Housing Trust Fund, the loss of rural housing investments through CDBG in 2013, and a drastic cut in affordable rental housing in 2014, North Carolina’s commitment to affordable housing reached a low-point in 2015. Since then there has been a slow, but promising upward trend. This year’s Senate budget moved the needle in the wrong direction by cutting the Workforce Housing Loan Program (WHLP). The House’s budget decided to keep the needle where it was last year and stopped the growth trend.

Affordable Housing Budget Comparison
FY16-17 Governor’s Budget Proposal Senate Budget House Budget Proposal NCHC Request
Housing Trust Fund $7.66m $10m $7.66m $7.66m $20m
HOME Match $3m $3m $3m $3m $3m
Workforce Housing Loan Program (WHLP) $20m $20m $16.5m $20m $35m
Community Development Block Grant – Neighborhood Revitalization $0m $0m $10m $10m $15m

The North Carolina Housing Coalition’s funding requests attempted to return the state’s investment to pre-foreclosure crisis levels. With 1.2 million cost-burdened households and half a million North Carolina families spending more than 50% of there income only on housing, this investment is not enough. We must do more, and what is troubling about both the Senate’s and the House’s budget is that we could do more. Both chambers decided on tax cuts instead.

If federal programs like HOME and CDBG are eliminated in the federal budget and the Low Income Housing Tax Credit eliminated through tax reform, the state is only left with $7.66 million in the NC Housing Trust Fund for affordable housing.

This funding picture is further complicated by the uncertainty at the federal level. We know that President Trump’s budget would have a profoundly negative affect on North Carolina families who struggle to afford a place to live. Over and again, the President’s budget articulated that it should be state and local government that should carry the burden for affordable housing. The draconian cuts would greatly impact the state’s budget. If programs like HOME and CDBG are eliminated in the federal budget and the Low Income Housing Tax Credit (LIHTC) eliminated through tax reform, all the state is left with is $7.66 million in the NC Housing Trust Fund for affordable housing.

Policy Wins: WHLP Caps and CDBG

While the state’s affordable housing investment is not where we want it, the House budget does include crucial policy fixes to both the Workforce Housing Loan Program (WHLP) and the Community Development Block Grant (CDBG) allocation. If LIHTC and CDBG continue to exist, these changes will result in more affordable housing development for predominantly rural counties and are a direct result of the advocacy of the Coalition and members like you.

WHLP Caps

The House not only fixed the harmful per county caps that the Senate placed on the WHLP, but doubles them in low- and moderate-income counties to allow the WHLP to better reach areas with the most need. The House leadership and Appropriations Chairs stepped up to fix what would have been catastrophic for LIHTC development in the state. The Coalition is now working on ensuring that the Senate leadership understands why the change needed to be made and preserves this change in conference committee.

WHLP per County Cap Comparison
Current Per County Cap Senate Per County Cap House Per County Cap
Low-Income Counties $1m $500k $2m
Moderate-Income Counties $750k $500k $1.5m
High-Income Counties $250k $500k $250k

CDBG-Neighborhood Revitalization

In 2013, the budget restricted the scope of the state’s annual ~$43m CDBG allocation to water infrastructure projects. This eliminated a key funding source for smaller communities to meet pressing, local housing needs. Restoring this funding has been a high priority for the Coalition this legislative session. Both the Senate and House budget proposals divert $10m of the total allocation to the NC Department of Commerce for Neighborhood Revitalization, which includes affordable housing. In addition to the allocation, any de-obligated funds will be split evenly between Commerce and the Department of Environmental Quality. As this is the same in both the House and Senate budgets, we are confident that this will be in the final budget.

Other Affordable Housing Policy Changes in House Budget [Updated June 1 at 11:30PM]

The original House budget included a finance provision that prohibits local governments from charging water and sewer impact fees on Low Income Housing Tax Credit developments. The provision was taken out through an amendment during the floor debate on the closest vote of the year (58-57). The budget also moves the Human Relations Commission out of the Department of Administration and under the Civil Rights Division of the Office of Administrative Hearings.

There has never been a more important time for you to join us in our advocacy work. As you can see from the WHLP caps and the CDBG-NR funding, advocacy has an impact. As we turn our attention now to the conference committees for the NC budget and the federal budget budget process, we need your voice and your helpJoin the Coalition today to make sure every North Carolinian has a safe, decent, affordable place to live.

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