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Policy Update 4-1-20

Around the State

Expanded Protections Under Latest Executive Order (#124)
On March 31st, Governor Roy Cooper enacted Executive Order #124 providing expanded relief to those facing new or additional financial difficulties during the on-going COVID-19 crisis. The order prohibits all electricity, natural gas, water and wastewater utilities operating in North Carolina from shutting off services due to nonpayment. The order is effective as of March 31st and also mandates a 60-day grace period on payments. 

Prior to the Governor’s order, the NC Utilities Commission on March 19th, had ordered the utility companies regulated by the Commission to stop disconnections and some had already taken the voluntary step of halting shutoffs in recognition of the layoffs, furloughs, and reduced wages. However, some smaller and municipal utility providers had not taken steps to pause disconnections. The Governor’s order gives clear directive to utilities of many types to provide this relief to consumers. Additionally, the order urges cable, telecommunications, and other related service providers to also follow this same directive, while not mandating it. 

Lastly the Executive Order encourages banks not to charge customers for overdraft fees, late fees and other penalties during the crisis and strongly encourages landlords to “follow the spirit” of the NC Courts’ directive to delay evictions. 

General Assembly Update
The General Assembly remains out of session with only the House Select Committee on COVID-19 holding public meetings virtually. The focus of the Committee thus far is assessing the impacts of the pandemic and how North Carolina will be able to access the resources provided in the federal CARES Act. The Committee is determining what the state needs to be doing or have in place in order to fully leverage the federal resources coming down the line. Currently, April 28th remains the scheduled date for the start of the short session and the state continues to run without an enacted budget. The Coalition is preparing its recommendations to state policymakers which will be shared in the near future.

Major Disaster Declaration
Last week Governor Cooper’s request for a “Major Disaster” declaration was approved for North Carolina by the president. The action unlocks the state’s access to federal disaster funding to state, tribal governments, eligible local governments and certain non-profit organizations for emergency protective measures. 

Cooper, in his request, asked for individual assistance to those affected, including crisis counseling, disaster unemployment assistance and Small Business Administration assistance, according to his office. “It’s important that we help North Carolinians stay protected from the health impacts of COVID-19 and recover economically from the financial impacts this crisis is having on our state,” Cooper said in a statement. 

Further information on what is available to housing organizations and how to access funds is still forthcoming but we will share those details as they become known.

Guidance from NCHFA for LIHTC properties in NC
The NC Housing Finance Agency recently released further guidance regarding the eviction moratoriums announced at the state and federal levels and how they relate to housing credit properties. See below for the text of their guidance:

The CARES Act (Act) signed into law by the President imposes a 120-day moratorium on tenant eviction filings and charging late fees for much of the nation’s affordable housing properties, including Housing Credit properties.  Specifically the Act applies the moratorium to properties:

  • with a federally backed mortgage or loan; or
  • that participate in a covered housing program as defined in the Violence Against Women Act (VAWA)

All Housing Credit properties are included in the Act as a housing program under VAWA. Therefore, between March 27, 2020 and July 24, 2020 owners of Housing Credit properties may not:

  • make, or cause to be made, any filing to recover possession from the tenant for nonpayment of rent or other fees/charges; or
  • charge fees, penalties or other charges to the tenant related to such nonpayment of rent

The Act does not place a prohibition on declaring a lease in default for nonpayment and does not affect eviction notices filed before March 27, 2020.  However, the Governor of North Carolina has halted all eviction proceedings until at least April 17, 2020 under Executive Order No. 124.

 Any Housing Credit property manager or owner with questions about this moratorium should seek advice from their attorney.

Raleigh Affordable Housing Bond Update
Housing needs remain a priority for the City of Raleigh according to remarks from Mayor Mary-Ann Baldwin. The city is still working towards a bond on the November ballot, however, the scale and scope will need to be down-sized in light of the pandemic. The previous plans for rebuilding Dorothea Dix Park and improvements to parks and greenways will likely be dropped from the proposed bond. Affordable housing remains a priority and will likely be the only focus of a bond measure.

National

CARES Act Includes $12 Billion for Housing
On Friday afternoon, the House passed CARES (Coronavirus Aid, Relief, and Economic Security Act) the $2 trillion COVID-19 aid package, sending it to the President, who then signed the bill in the evening. 

The bill provides more than $12 billion in funding to HUD for housing and homelessness programs, including: 

  • $4 billion for Emergency Solutions Grants (ESG) for homelessness assistance 
  • $5 billion in Community Development Block Grants (CDBG)
  • $1.25 billion for the Housing Choice Voucher (HCV) program
  • $1 billion for project-based rental assistance
  • $685 million for public housing
  • $300 million for tribal nations
  • $65 million for Housing for Persons with AIDS (HOPWA) 
  • $50 million for Section 202 Housing for the Elderly
  • $15 million for Section 811 Housing for Persons with Disabilities

The bill also institutes a much-needed temporary moratorium on evictions and foreclosures for homeowners and renters in federally subsidized apartments and homes with federally backed mortgages. Please see NLIHC’s detailed analysis of the bill’s housing provisions.

Congressman David Price’s office recently released the following guides for the new federal resources:

Advocacy on COVID-19 Impact on Housing Credit
The Housing Credit program has a number of programmatic deadlines required under the Internal Revenue Code that could be difficult or impossible to meet as development slows due to COVID-19. The COVID-19 crisis and response measures will likely lead to consequential disruptions in transactions and construction due to understaffed lenders, suspended site inspections, broken supply chains for materials, and state or local suspensions on construction. For immediate assistance, the ACTION campaign is calling on Congress to provide a one-year extension for three key program deadlines: 10 percent test deadlines, placed in service deadlines, and rehabilitation expenditure deadlines. 

In addition, Congress is called to consider measures to bolster future production and preservation of affordable housing by enacting a minimum 4 percent Housing Credit rate. The “4 percent” Housing Credit, which finances roughly half of all Housing Credit developments, fluctuates monthly based on a formula tied to federal borrowing rates. With federal borrowing rates effectively zeroed out in response to COVID-19’s economic impacts, the 4 percent Housing Credit rate is at an all-time low of 3.12 percent and will likely dip even further next month.  Enacting a minimum 4 percent Housing Credit rate would provide parity to the 9 percent Housing Credit rate, for which Congress enacted a minimum rate as part of the response to the 2008 economic collapse in recognition of the critical role of affordable housing in the recovery.

Resources and Reports

National Housing Law Project – CARES Act Eviction & Foreclosure Moratorium Summary & Analysis 

USDA & VA – COVID-19 Guidance 

NLIHC – Housing Instability and COVID-19 Map

PBS Documentary – East Lake Meadows

Recommended read

Housing Call: March 31, 2020

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