Policy Update 4-20-23 – North Carolina Housing Coalition

NCHC Organizational Updates

Bringing It Home registration closes next week: On May 2-3, we’re offering 18 live, interactive workshops designed to help you strengthen your services and advocacy for those at risk of or experiencing homelessness. Topics include increasing your organization’s capacity, fair housing protections, amplifying the voices of lived expertise, and evidence-based policy making on homelessness and evictions. Our speakers include both local and national experts who will share their successes and provide practical examples for how you can help end homelessness in NC. View the full agenda now and register today! Space is limited, and registration closes April 28

Federal Updates

The NMTC Extension Act of 2023 was introduced in the House last week. We covered the key components of the companion bill when it was introduced in the Senate back in February. The bill would:

Permanently authorize the New Market Tax Credit program, which is currently set to expire in December 2025
Create an annual program allocation of $5 billion dollars
Adjust annually for inflation
Exempt NMTCs made after Dec. 31, 2022 from the Alternative Minimum Tax.

HUD Awards $98 million in choice neighborhoods implementation grants and opens a new $10 million funding opportunity for local planning efforts. The Choice Neighborhoods Implementation Grants assist in the redevelopment of severely distressed HUD-assisted properties into mixed-income communities. The additional $10 million in Planning Grants to support local planning efforts in order to develop a comprehensive neighborhood revitalization strategy or Transformation Plan.

HUD extended the deadline to comment on the proposed AFFH regulations to Monday, April 24. Organizations can find a sample comment letter on the NLIHC website. NLIHC urges advocates to voice their support for the rule and offers suggestions on how to further strengthen the final version of the rule. Specifically, they suggest improving the proposed rule relating to community engagement, public transparency, and annual progress evaluations.

State Legislative Updates

Bill Tracker & Framework
Check out our Bill Tracker, which is updated with the latest housing-related bills with brief summaries.

Several housing-related bills have been filed recently and we are seeing the potential opportunity for several of the pieces of various bills to come together and be more transformative in the housing space. We want to discuss them through the stability/subsidy/infrastructure/supply framework. This framework was taken from the Affordable City by Shane Phillips, and we added a fourth category These four domains are interconnected and In order to make progress in any one area, we need to move the needle in all 4 areas. Below, we’ve situated into our framework some key bills we’re following, in addition to bills filed over the last two weeks.

Stability
This category of the framework refers to the ability and importance of keeping people in their homes, interventions related to stability could be things such as: eviction protections, property tax homestead exclusion amendments to improve access, and source of income protections.

(4/17) HB 637 – Expand Property Tax Homestead Circuit Breaker (Alston, von Haefen, Autry, Rudow)
Removes the age and disability requirements for eligible homeowners under the circuit breaker program and reimburses local governments for their resulting revenue loss.
(4/10) HB 594 – Disabled Veterans Homestead Exclusion Prequalification (Pare, Winslow, Goodwin, Chesser)
An amendment to the disabled veteran property tax homestead exclusion in GS 105-277. Allows for disabled veterans to apply for the prequalification of the homestead exemption tax relief and sets an application process and notice requirements.
(4/10) HB 595 – Rental Inspections (Ward)
Gives local governments permission to conduct periodic inspections when there is reasonable cause to believe that there are unsafe or unlawful living conditions in a residential building or structure. Also prohibits a local government from requiring any owner or manage of a rental property to obtain a permit or permission to rent or lease residential property or to register rental property.
(4/6) SB 667 Regulation of Short Term Rentals (Moffit, Hanig)
Bans local governments from prohibiting the use of residential property for short term rentals or imposing limits on the minimum number of nights for a stay.
(4/6) SB 709 – Returning Citizens to Work (Mohammed, Bode, Murdock)
As it relates to housing: 1) Appropriates $2.26M from the General Fund to Adult Corrections to fund permanent full-time Housing Support Specialist for each of the 17 Local Reentry Councils. 2) Appropriates $3.8M from General Fund to be used for LRCS to provide reentry rental assistance to individuals served by each council.
(4/5) HB 584=SB 633 Mobile Home Park Act (Meyer, Smith)
Among many things, it would require landlords to take steps to mitigate displacement when converting a mobile home park to another use.
(4/4) HB 551=SB 553 – Landlord Tenant and HOA Changes (Bradford, Hardister, K. Hall)
Bans source of income nondiscrimination policies at the local level; regulates service/support animals; allows landlords to charge tenants in eviction cases for landlord’s attorney’s fees, up to a limit, and for all attorney fees associated with an appeal.
(3/29) SB 420 – Homebuyer Fairness & Protection Act (Batch, Garrett, Salvador)
Prohibits sellers from requiring due diligence fees exceeding 1% of purchase price. Appropriates $10M to the NC Housing Coalition to support homebuyer education services
(3/15) HB 379 – Fair Use of Consumer Reports (Alston, Lofton, Harris)
Prohibits credit bureaus from reporting eviction filings if they don’t result in a judgement for the landlord.
(2/27) SB 167 – Source of Income (Mayfield, Murdock, Salvador)
Prohibits source of income discrimination under the State Fair Housing Act. In other words, landlords would not be able to deny a tenant’s rent payment through Section 8, HOPE program or other similar forms of rent assistance.

Subsidy
This category of the framework acknowledges that increasing supply alone does not mean that the numbers will work for all income levels, it is difficult to have supply that is accessible to all members of your community. Interventions in this category include things like homeownership assistance, tax credits and more.

(4/4) HB 569=SB55 – Working Families Act (Marcus, Meyer, Mohammed)
Four Key Elements related to Housing:
1) Amends GS 105-277.1B by increasing the limit on the income eligibility for the property tax homestead circuit breaker from 150% to 180% of the income eligibility limit.
2) Directs the Housing Finance Agency (Agency) to establish a program under the Homeownership Fund to provide assistance, in the form of reimbursement or direct payment, to first-time homebuyers that are employed full-time as public servants in the State.
3) Defines first-time homebuyer. Provides for the lesser of $25,000 or 10% of the purchase price for down payment assistance, mortgage insurance premium assistance, and closing costs. Allows for monthly mortgage insurance payment assistance for up to 60 months for any single first-time homebuyer. Authorizes the Agency to adopt, modify, or repeal rules and regulations to implement the act. Includes other defined terms.
4) Appropriates $150 million in recurring funds from the General Fund to the Homeownership Assistance Fund for 2023-24 to be used to implement the act.
(3/29) SB 424 – Restore the American Dream (Batch, Garrett, Chaudhuri)Appropriates $30M to Housing Trust Fund (HTF) for FY23-24 and creates dedicated revenue stream for HTF
(2/27) HB 208 – Low Income Housing Tax Credits (A. Jones)
Reenacts the state low-income tax credit for low-income housing awarded federal low income housing tax credits.

Supply
This category of the framework acknowledges the clear fact that if you have a growing number of people who need homes, you need more supply, and creating more supply or supporting the creation of more housing is one of the ways to mitigate the need for affordable housing. Interventions in this category fall into the realm of land use regulations, investing in programs that construct housing or incentivize the construction of affordable housing, and more.

(4/17) HB 645 – Inclusionary Zoning/Workforce Housing funds (Everitt, Butler)
Grants local governments the ability to include inclusionary zoning in their zoning regulations. Appropriates $10 million to NCHFA from the General Fund for the Workforce Housing Loan Program in recurring funds.
(3/29) HB 537 – Workforce Housing Act (Zenger, Biggs, Lowery, Fontenot)
Requires local governments by-right permit multifamily housing in areas zoned for business; allows the state to sell/lease land at below market value for development where at least 50% of units are affordable to 80% AMI households; creates NCHFA revolving loan fund for qualifying first-time and veteran homebuyers; appropriates $35M in recurring funds to Workforce Housing Loan Program.
(3/16) HB 409 – Regulation of Accessory Dwelling Units (Winslow, G. Brown, Alston, Tyson)
Allows ADUs on properties by-right as long as they meet parking requirements & conditional use zoning. Five-ft. setback minimum or current zoning setback minimum, whichever is less. No owner-occupancy requirements for dwelling unit or ADU. Local governments must connect ADU to utilities serving primary unit.
(3/15) SB 317 = HB 562 – Addressing the Workforce Housing Crisis (Moffit, Lowe, P. Newton)
Local governments must approve developments of at least 10 acres where at least 20% of the units are workforce housing. Of those workforce housing units, half must be sold to people earning 80% AMI or less. The remainder of the workforce housing lots must go to people earning 100% AMI or less. The project is approved if the local government doesn’t approve or deny the application within 60 days. No permanent affordability; only requires 1 year of owner-occupancy or low-income co-investor.
(3/7) HB 294 – Housing Choice Incentive (Alston, G. Brown, Hardister)
Appropriates $30M in recurring funds from Gen. Fund to Commerce for NC Housing Choice Grants Program. The Program awards municipalities and counties with up to $1M grants for infrastructure projects if they meet a specific threshold for zoning density, in an effort to promote missing middle housing.

Infrastructure
This category, added by NCHC staff, references the systems and processes that impact housing, particularly the critical roles played by state and local governments as well as the ability to connect with housing organizations and have an effective housing ecosystem. If our housing ecosystem is without the proper infrastructure and cannot effectively carry out roles or respond to crisis, this directly impacts households in need and communities everywhere.

(4/13) HB 620 – Up Minimum Wages/No Subminimum or Exemptions (Harrison, Cunningham, F. Jackson, Staton-Wiliams)
Increases the minimum wage in three phases to $10.35 (2024) to $15.00 (2025) followed with an annual adjustment by the Commissioner of Labor.
(4/4) SB 583 Housing Studies – Barriers and Homelessness (Wadell)
Directs the Legislative Research Commission to study the needs and potential solutions to mitigate housing barriers for individuals with criminal records and to mitigate homelessness in the state.
(4/4) SB 568 Create Dept. of Housing and Comm. Development (Batch, Garrett, Lowe) Establishes statewide, cabinet level Housing & Community Development Dept.

State & Local Updates

The City of Winston-Salem is using ARPA funds to start a right-to-counsel program in partnership with Legal Aid- NC. Low-to-moderate income tenants facing eviction can apply to receive legal assistance. The goal of the program is to divert evictions which, they hope will ensure housing stability by reducing the likelihood of housing displacement and potential homelessness.

Durham Planning Board members voted overwhelmingly to not recommend a proposed redevelopment at Southpoint Mall to City Council. The main reservation planning board members expressed about the redevelopment of parking lots into office, hotel, and apartments was the lack of affordable housing – none of 1,382 planned apartments in the redevelopment would be affordable.

The City of Raleigh recently launched a Home Revitalization Program to assist low-income homeowners located along transit corridors with repairs and accessibility updates. The program aims to preserve affordability and is funded by Raleigh’s $80M housing bond that passed in 2020.

Just last week, a Wake County Survey indicated that more than half of residents surveyed believe cost of living and affordable housing should be a top priority for the County.

The Town of Tarboro was recently selected for the International City/County Management Assoc.’s Economic Mobility Opportunity Cohort. The Town will receive $30K for a housing needs study. In 2016, flooding from Hurricane Matthew significantly impacted Tarboro’s housing stock.

Mecklenburg County invites residents to share their thoughts, experiences and suggestions related to corporate landlords and corporate owned rentals. Residents can visit mecklenburghousing.com to complete a survey and learn about upcoming community listening sessions.

Renters at the Crest on Providence, a 473-unit naturally occurring affordable housing development in south Charlotte, received notices of nonrenewal last month. The owner plans to redevelop the 55-year old complex with upgraded units that command higher rents.

DHIC, other groups aid growing need for affordable housing in Raleigh, Durham | Triangle Business Journal

Raleigh City Council voted to approve a plan to address Dix Park’s effects on housing affordability, transportation, and displacement in the neighborhoods surrounding the park. The Dix Edge Final Report, which was released in June 2022, notes that neighborhoods near the park are losing naturally occurring affordable housing as property values rise in response to the Park’s creation. The plan calls for the development of nearly 300 units for low and very-low income families on city-owned property, the utilization of Affordable Housing Bond funds to pursue additional affordable housing opportunities, and an increase in market-rate housing for higher-income families.

The Dare County Planning Board recommended that County Commissioners remove cluster homes from the allowable special uses in areas that aren’t zoned for multifamily housing. Dare County’s ordinance defines cluster housing as more than one long-term residence situated on a parcel. Between 2018 and 2019, Commissioners adopted amendments to allow cluster housing in an effort to increase workforce housing. The cluster concept received community pushback after an application was recently submitted for the development of 60 single family cluster homes on a 10-acre parcel.

Events

[virtual] Second Hearing on Appraisal Bias | Federal Housing Finance Agency, 5/19, 10 a.m.-1 p.m
- Explores the current regulatory framework for the appraisal industry, focusing on appraisal standards, appraiser qualification criteria, barriers to entry into the profession, and appraisal practices
[in-person] 2023 CAHEC Partners Conference | 6/6-6/7, Raleigh Convention Center [registration closes 5/22]

Reports & Resources

Zoning Change: Upzonings, Downzonings, and Their Impacts on Residential Construction, Housing Costs, and Neighborhood Demographics | Urban Institute

Land-Use Reforms and Housing Costs | Urban Institute

Addressing America’s Affordable Housing Crisis | Urban Institute

Population-Level Health Effects of Involuntary Displacement of People Experiencing Unsheltered Homelessness Who Inject Drugs in US Cities | Journal of the American Medical Association

Lower-Income Renters Have Less Residual Income than Ever Before | Joint Center for Housing Studies

Study: Renters, Women, Minorities Underrepresented in Land Use Decisions | Planetizen News

Pro-Housing Land Use and Zoning Reforms | HUD Office of Policy Development and Research

Preliminary Analysis: Eviction Filing Patterns in 2022 | Eviction Lab

How Public Housing Authorities are Addressing Equity | Public and Affordable Housing Research Corporation

How the FHFA Can Increase Federal Home Loan Bank Affordable Housing Investments | Urban Institute

In the News