Around the State
NC General Assembly Budget Update
State budget negotiations continue into their next phase – conference committee negotiations. The Senate & House chambers have chosen their conference committee representatives who will work to reconcile the differences between their respective budget proposals. What they decide will be voted on, and if passed, presented to the Governor for signature and enactment.
Compared to the Senate version, the House budget includes more robust resources for housing and related needs. Most notably $200 million for gap financing to ensure that shovel-ready Low-Income Housing Tax Credit projects facing drastic cost increases due to the effects of the pandemic are able to move forward. For housing, the House also includes $15 million for Rapid Rehousing, $20 million for Habitat for Humanity, and $42 million for infrastructure related to affordable housing development in rural areas. For more details on the budget, please visit today’s blog.
As for timing, we are hearing that a final budget may be ready for approval in mid- to late September. With this additional delay in passing a state budget, resources that are desperately needed to cope with the wide ranging effects of the pandemic will only be further delayed.
With the continued delay in passing a budget and the wide differences in the amount of housing funding in the Senate and House budgets, continued advocacy is necessary to ensure that the final budget does contain the housing provisions proposed by the House. For more, please see today’s blog.
Hotel Safety Issues Bill Passes, Heads to Governor for Approval
Last week, the General Assembly passed House Bill 352 (Hotel Safety Issues), a bill which seeks to define transient occupancy in hotels, motels, RV parks, campground and other similar facilities as stays of less than 90 days. By codifying such a definition, access to rights of due process as a “tenant” versus a “transient” guest can be manipulated by those seeking to take advantage of those using such facilities as their primary residence.
The lodging industry argues that this definition is necessary in order to prevent unlawful or otherwise unsafe activities at such properties. Those individuals who could be classified as “guests” would not be entitled to protections against removal or eviction, thus more easily removed. Unfortunately as the pandemic has revealed more widely, hotels and motels are often the only remaining options for housing that is affordable. For those with evictions on their credit histories or who have past justice system involvement, hotels and motels are often the only type of housing that is accessible.
In practice in jurisdictions where such definitions have been enacted, a phenomenon of “shuffling” long-term hotel residents from room to room tends to occur in order to prevent those individuals from accessing rights as “tenants.” Advocates are calling on Governor Roy Cooper to veto HB 352 in order to prevent this additional harm on those already struggling with housing stability. Tell lawmakers to reject legislation that would eliminate tenant protections for those living in motels.
Homeowner Assistance Fund (HAF) Program Update
The NC Housing Finance Agency (NCHFA) continues preparing to administer the Homeowner Assistance Fund (HAF), $273 million from the American Rescue Plan Act to assist homeowners struggling financially due to the pandemic. NCHFA successfully submitted their plan outlining the program to the US Treasury Dept, putting North Carolina in the first ⅓ of states across the country to submit their plans. Go here to read more about NC’s HAF plan: Memo Highlighting Updates to NCHAF Plan Submitted to US Treasury
NCHFA has also opened an RFP for vendors, with proposals due on September 7 (HAF Vendor RFP). The public can monitor NCHFA’s progress towards opening the HAF program via a new website: NC Homeowner Assistance Fund
In the meantime, NCHFA has begun to collect contact information for homeowners facing difficulties. Such households are being referred to the State Home Foreclosure Prevention Project (SHFPP). That program offers free housing counseling, works with servicers on behalf of homeowners, and can provide legal referrals for homeowners with lower incomes. Homeowners can call 1-888-442-8188 to find a counselor in their area.
CDC Eviction Moratorium May Be Taken Up by the Supreme Court (Again)
The U.S. Court of Appeals for the District of Columbia Circuit filed an order on August 20 rejecting a request from Realtors and apartment owners groups to stop the moratorium. The move allows the moratorium to remain in place. The group challenging the moratorium has filed an emergency petition with the Supreme Court, asking the Court to overturn the moratorium. The Court may rule as soon as this week.
House Approves Budget Resolution Setting Stage for $339 Billion in Affordable Housing Investments
The House voted (220 – 212) Tuesday evening to approve a budget resolution that sets the stage for a $3.5 trillion infrastructure and economic recovery package, including up to $339 billion in investments to get and keep low-income people housed.
Now that the House and Senate have approved the budget resolution, the Senate Banking Committee and House Financial Services Committee will begin drafting legislation to divvy its allocation among the various programs. The “social” infrastructure package potentially includes:
- Expanding rental assistance with $180 billion phased in over ten years,
- Providing $70 billion to preserve public housing, and
- Investing $45 billion in the national Housing Trust Fund.
Together, these resources will help ensure that America’s lowest-income and most marginalized households have a safe, accessible, and affordable home.
FEMA Extends 100% Reimbursement of COVID Activities, Including Costs for Non-Congregate Sheltering
The Federal Emergency Management Agency (FEMA) announced that they would continue to cover eligible costs related to coronavirus activities through the end of the year at 100%. This includes costs associated with providing non-congregate sheltering for individuals experiencing homelessness. Many localities have used the funds for hotel costs and other housing assistance. The original order was set to expire at the end of September. The new order extends this provision to 12/31 the end of the year.
DASH Act Introduced in Congress
Last week, Sen. Ron Wyden (D-OR) introduced the Decent, Affordable, Safe Housing for All (DASH) Act in Congress. The bill includes provisions that could support long-lasting solutions to numerous housing issues. Simultaneously the bill also includes the creation of a new program that may serve more as a tax incentive for investors than provide any meaningful impact on housing affordability issues across the country.
The bill includes:
- Fully funding rental assistance (Housing Choice Vouchers)
- Investing robust resources in the national Housing Trust Fund
- Creating a new project-based renters’ tax credit
- Closes loopholes in the LIHTC program that developers have exploited to convert federally assisted properties to market-rate while also preventing nonprofit organizations from preserving the properties as affordable.
For the LIHTC program, the DASH Act includes many policies called for in the Affordable Housing Credit Improvement Act (AHCIA):
- Increasing the 9 percent Housing Credit tax incentive by 50 percent, which would finance an estimated 299,000 additional affordable rental homes over 2021-2030;
- Lowering the bond financing requirement for properties to receive the full 4 percent credit from 50 percent to 25 percent for four years, allowing states to more efficiently and effectively use their bond cap authority to build additional affordable housing; and
- Providing additional upfront equity – known as basis boosts – for certain projects that need it, including those in rural, Native American, and Extremely Low Income communities, or for bond-financed properties that receive the lesser, 4 percent Housing Credit.
The contentious aspect of the DASH Act is the Middle-Income Housing Tax Credit, a provision to create a new federal tax credit to incentivize developers to build and preserve market-rate apartments – housing that is affordable to families earning 100% of the Area Median Income (AMI) or below. Why is this being criticized?
- Research shows, however, that middle-income families comprise less than one percent of those facing significant housing challenges, while 92.5% of these households have very low or extremely low incomes and would not be served by this new tax break for investors
- Does not address those who actually face housing challenges
- Scarce federal resources should be used to target the deepest needs
- Middle income housing pressures can be addressed at the local level via zoning & land use policies
Aside from the long and wide ranging resources, the DASH Act contains some provisions that could be eligible for inclusion in the budget reconciliation bill.
National Housing Law Project – An Advocates’ Guide to Tenants’ Rights in the Low-Income Housing Tax Credit Program.
Webinar: How to Harness the Legal System to Prevent Evictions
Enterprise Community Partners
August 31, 2021
3:30 pm ET
National Public Radio – The Hallway, Not Courtroom, Is Where Things Really Get Done At This Eviction Court