On June 18, the North Carolina General Assembly ended its 2011 legislative session, with cuts made to affordable housing programs, early childhood education, healthcare, social services, and public education taking effect on July 1. Despite the efforts of the North Carolina Housing Coalition (NCHC), an NLIHC state coalition partner, money appropriated for the North Carolina Housing Trust Fund (NCHTF) was cut by 22% to $7.8 million, down from $10 million last year and a nearly 50% reduction compared to appropriations five years ago.
In order to secure a dedicated source of revenue for the NCHTF and avoid the volatile appropriations process in the future, NCHC coordinated with legislators and a diverse range of allies from disability rights advocates to bankers, realtors and homebuilder associations to support SB 462. The legislation would modify the distribution of revenue from a real estate transfer tax (referred to as an “excise tax” in North Carolina) to include the NCHTF. Currently, the revenue funds are split between county governments, the Parks and Recreation Trust Fund, and the Natural Heritage Trust Fund. The modification would not affect funds to the counties. Instead, the remaining funds would be shared between NCHTF, Parks and Recreation, and the Natural Heritage Trust Funds.
Though this has caused some controversy between housing advocates and land conservationists, NCHC believes there is an imbalance in funding for affordable housing development versus that for land conservation. “The Parks and Recreation Trust Fund and the Natural Heritage Trust Fund have received $620 million dollars since they began receiving tax distributions in 1996. In the same period the Housing Trust Fund has received $122 million. When you add in other funding for open space preservation the total is nearly $2 billion. Parks and land conservation are important, but creating jobs and housing opportunities for those with the greatest need is equally important. It is time for the Housing Trust Fund to receive a more equal investment and a more stable funding source,” said Carley Ruff, Policy and Outreach Coordinator at the North Carolina Housing Coalition.
As a result of NCHC’s work during the legislative session, the bill received bipartisan support. Though the bill did not move out of committee before the session ended, co-sponsors of SB 462 received approval for it to be added to the work plan of the Joint Legislative Program Evaluation Oversight Committee. The committee will release its recommendation for the bill by May 2012 when the General Assembly returns for a short session.
Immediate additional funding for the NCHTF was obtained through legislation extending the state’s Foreclosure Prevention Program and Fund. The Foreclosure Prevention Program and Fund was established in 2008 and was scheduled to expire in October. The program provides housing counseling, mortgage payment assistance, and interest-free mortgage loans, with revenue coming from a $75 fee on foreclosure filings. In extending the program, the new legislation directs any funds remaining in the foreclosure program at the end of each fiscal year to be directed to the NCHTF. It is expected that this will result in an additional $2 million to be added to the Trust Fund, effectively offsetting the cuts in the appropriations process.
“Our legislators need to hear from those who have a safe, affordable place to live because of the fund. We are approaching the 25th anniversary of the trust fund, and we hope to secure a dedicated funding source by the time we hit that milestone. While the housing market and the economy have been unsteady, the NCHTF is creating jobs and keeps communities growing. Now more than ever, North Carolina needs decent, safe and affordable housing that the Trust Fund can build, given the necessary resources,” said Ms. Ruff.