A mixed-income housing project under construction in Durham. (Photo by Greg Childress/NC Newsline)
The state’s affordable housing needs are getting a boost from federal tax credits, tax-exempt bonds and a state loan program.
The financing will help build and rehab 5,012 privately owned and managed affordable apartments — worth nearly $1.5 billion — in more than two dozen counties, according to the N.C. Housing Finance Agency.
Of the 50 projects that will benefit from the awards, 4,150 apartments are for families and 862 for seniors. As many as 500 apartments will be targeted for people with disabilities. The majority of the apartments will be new buildings but approximately 420 will be preservation projects.
The projects were chosen from among 74 full applications reviewed by the North Carolina Federal Tax Reform Allocation Committee and selected based on recommendations by the Housing Finance Agency, which administers the Low-Income Housing Tax Credit (LIHTC) program.
Scott Farmer (Photo courtesy NC Housing Finance Agency)“We’re excited with the results for this year and looking forward to another strong cycle next year,” Scott Farmer, executive director of the N.C. Housing Finance Agency, said. “We’ll just continue to promote affordability. This is housing that’s much needed in all of these communities and anything we can do to support additional resources for housing is a good thing.”
North Carolina faces a shortage of 322,000 rental units through 2029, according to a recent study — “2024 Housing Supply Gap Analysis, State of North Carolina” — commissioned by N.C. Chamber Foundation, N.C.Home Builders Association and N.C. Realtors. Overall findings show an expected gap of 764,000 total units, including 442,000 units for purchase.
The Low Income Housing Tax Credit program is widely viewed as the nation’s best tool for creating and preserving affordable housing. The awards are administered by states’ housing finance agencies through a competitive application process. The Internal Revenue Service sets general guidelines for the program.
Workforce Housing program awaits legislative funding
Twenty-eight of the selected properties were awarded $34.7 million from the Workforce Housing Loan Program, which was established by the N.C. General Assembly in 2014 to encourage development of apartments using the housing credits in low-income counties and to reduce rents in moderate- and high-income counties.
The Workforce Housing Loan Program isn’t funded moving forward but Farmer said he hopes lawmakers will fund it before the end of the year.
“Without that, the Workforce Housing Loan Program, it’s going to dramatically change where deals will work,” Farmer said “That’s a critical resource for doing properties in low-and moderate-income counties. The Workforce Housing Loan Program was really designed to help some of that funding gap to make deals work better in those more rural communities.”
Stephanie Watkins-Cruz (Photo courtesy NC Housing Coalition)Affordable housing advocates also are closely watching state lawmakers to see if funding for program is restored when the General Assembly adopts a state budget for the 2025-2027 biennium. Lawmakers passed a “mini budget” in late July to address critical spending needs.
“We want that funding to be restored,” Stephanie Watkins-Cruz, director of housing policy at the N.C. Housing Coalition, said during one of the group’s recent housing calls. “We want to make sure that the projects that are part of next year’s cycle in North Carolina have the gap financing they need.”
The Workforce Housing Loan Program has been funded at $35 million each of the last two years. Funding uncertainty will likely cause developers to skip over rural counties in favor of more financially feasible areas, Watkins-Cruz said. Nearly every new project approved demonstrated a need for gap financing, she said.
“Without the Workforce Housing Loan Program, without this gap financing, we’re putting likely hundreds of units at risk, and this will mean it will limit the ability for affordable housing units and developments to actually happen in rural areas and recovering areas.”
If funding isn’t restored to the program, Watkins-Cruz said more affordable housing will be concentrated in better-heeled urban areas which defeats the program’s purpose.
The Workforce Housing Loan Program is also an essential tool for Hurricane Helene recovery, Watkins-Cuz said.
“Without it, housing in some of the hardest hit areas like Polk, Rutherford, Avery, Watauga and Henderson counties, may not be viable, which impacts the ability of the workforce and community members to return home or remain in the area,” Watkins Cruz said.
Agency loans totaling more than $12.2 were awarded to 11 properties under the Rental Production Program, which uses state and federal funds to improve economic feasibility for rental developments.
The projects awarded federal tax credits and other financing awards are expected to support 21,960 jobs and generate $95.3 million in state and local tax revenue, according to the Housing Finance Agency.
In a post on its website, the N.C. Housing Coalition noted that between 1986 and 2023, the Low-Income Housing Tax Credit program has stimulated both the state and local economies, generating more than $21.3 billion in wages and business income and more than $7.7 billion in tax revenue for the state.
Since its creation, the Housing Finance Agency has financed more than 321,320 affordable homes and apartments totaling $34.4 billion.
Here is the list of developments chosen to receive federal housing tax credits and other financing awards.
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