A Habitat for Humanity Home in Durham. (Photo: Greg Childress)
A North Carolina state House bill with bipartisan support would provide a one-time appropriation of $50 million to establish a revolving, below-market-interest loan program to help developers improve sites for affordable housing.
Low-income renters in North Carolina far outnumber affordable housing units
Under House Bill 1072, loan recipients could use the money for land acquisition, predevelopment costs and infrastructure costs for affordable housing. Those costs, supporters said, can sometimes stop affordable housing projects from being built.
The bill comes as North Carolina’s leaders struggle with a housing shortage as the state adds new residents. A report by the N.C. Chamber Foundation projects a five-year inventory gap of 764,478 units — comprising 442,118 for-sale units and 322,360 rental units.
House Democratic Leader Robert Reives (D-Chatham) said builders refer to the beginning phase of the development process as the “pre-construction valley of death.”
House Minority Leader Robert Reives (Photo: NC General Assembly)“For nonprofit affordable housing builders, especially those working with limited margins and mission-driven models, those upfront costs can stop a good project before it ever gets off the ground, causing it to be stuck in limbo,” Reives said during a press conference.
Reives said the loans would help nonprofit developers clear many of the practical hurdles that stand between an idea and a home.
“And because it’s structured as a revolving loan program, the dollars can be reused to support more projects over time,” Reives said.
House Rules Chairman Rep. John Bell (R-Wayne) is a primary sponsor of the bill, along with Reives, Rep. Chris Humphrey (R-Greene), and Rep. Carla Cunningham of Mecklenburg County, a former Democrat who made news this week when she walked away from the party and registered as an independent.
Bell said increasing the supply of affordable housing is one of the state’s most pressing issues, and one that elected officials of all political stripes can agree on.
House Rules Chairman. John Bell (Photo: NC General Assembly)“Importantly, this is a one-time investment of a self-sustaining fund,” Bell said.”It’s not just about addressing today’s shortage, it’s about creating long-term solutions that can continue to work for years to come.”
H1072 calls for the N.C. Housing Finance Agency to establish and administer what would be called the Affordable Housing Infrastructure Development Loan Program to make loans available to eligible borrowers. The bill also creates the Affordable Housing Infrastructure Development Loan Fund from which loans would be made.
Bell and Reives were joined at Wednesday’s press conference by Paul Reeves, executive director of Habitat for Humanity of North Carolina, Matt Whittle, executive director of Habitat for Humanity of Goldsboro-Wayne, and T’Sharra Williams, a homeowner who purchased a Habitat home in Lenoir County nearly a year ago.
Reeves, whose organization represents 56 affiliate Habitat agencies across the state, said access to reliable, sustainable capital for land acquisition and land development is a challenge, particularly as more affiliates transition to building subdivisions as opposed to single homes.
“Across our state right now, the cost is roughly $50,000 per lot to put in infrastructure, which means if we’ve got an affiliate that’s doing a 10-house subdivision, they’re gonna get a bid at $500,000 or north for infrastructure on that,” Reeves said.
Paul Reeves (Photo: Habitat for Humanity, NC)Reeves said the revolving loan program has the potential to help create 1,000 units in the first five years.
“And because it’s a revolving loan fund, it will do it again in the next five years, and the five years after that and the five years after that,” Reeves said.
Whittle said the loan program would allow communities to build more than housing.
“It opens the door to having affiliates and other qualified organizations across the state to build foundations, to build communities where homeowners are gonna be able to thrive,” Whittle said.
Williams said that before moving into her Habitat home almost a year ago, she and her five children didn’t have a place to call home.
“My life and my children’s life have changed dramatically,” Williams said. “We went from being homeless to being a homeowner, which is a plus for all of us.”
H1072 was referred Wednesday to the House Committee on Housing and Development.
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