North Carolina, among other Sun Belt states, has experienced outsized population growth over the past several years. As a result, home prices and rents have risen significantly, spurring an affordability crisis.
The North Carolina Housing Finance Agency (NCHFA) released data showing that over the next 10 years, roughly 15,000 affordable units, or 16 percent of the North Carolina Housing Finance Agency’s LIHTC portfolio, are expected to age out of their period of mandated affordability. With the state’s surging population and tight housing market, landlords of affordable units have been incentivized to convert affordable dwellings to market rate rents. As of 2024, nearly 10,000 affordable units have already lost affordability status.
The Local Government Commission (LGC) recently approved a request from the NCHFA to issue $750 million in revenue bonds to address the state’s housing shortage. Proceeds from the bonds will be used to buy mortgage loans or other mortgage-related obligations from mortgage lenders. Further, the funds will be used to increase the state’s supply of affordable housing for low- and moderate-income households.
Additionally, a proposal labelled the “Keep Housing Affordable Act” was introduced earlier in 2024 to bolster the Low-Income Housing Tax Credit (LIHTC) Program and incentivize developers to maintain the affordability of housing units for extended periods. The act would establish an optional 50-year affordability period. In return the sponsor could access additional tax credits after 15 years without a cap.
North Carolina is working to enact legislation that will help keep housing units affordable. However, as affordability status for affordable housing units continues to reach expiration, the state must do more to curb the housing shortage and affordability crisis.
To learn more about Berkadia Affordable Housing’s experience in North Carolina, connect with an advisor today.