HomeMy WebLinkAboutAffordable Housing Senate Bill 04-20-1999 5b~. .
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GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 1999 FJLE~ ' SEI~i~~~
s S 7 0 g MAR 311944
SENATE DRS1b33-LM120(3.14~PR1NCJPAL CLERK
Short Title: Affordable Housing.
(Public)
Sponsors: Senator Odom.
Referred to;
1 A BILL TO BE ENTITLED
- 2 AN ACT ALLOWING COUNTIES HAYING A POPULATION IN EXCESS OP
3 500,00 TO PROVIDE AFFORDABLE HOUSING FOR PERSONS OF LOW
4 AND MODERATE INCOME.
5 The General Assembly of North Carolina enacts:
6 Section 1. The General Assembly finds and declares that the purpose of
7 this act is to provide authority for larger urban counties in North Carolina to provide
8 funds for residential housing construction, new or rehabilitated, and to provide foz
4 the sale or rental of housiztg to persons and families of low and moderate income_
10 The General Assexn.biy finds and declares that there exists in larger urban counties,
11 including rural areas of such counties, a serious shortage of decent, safe, and sanitary
12 residential housing available at low prices or rentals to persons and families of low
13 and moderate income. This shortage is inimical to the health, safety, welfare, and
14 prosperity of alI zesidents of the State and to the sound growth of North Carolina
15 communities.
16 Section 2. Part 5 of Article 18 of Chapter 153A of the General Statutes is
17 amended by adding a new section to read:
18 "~ 153A-378. Low- and _mode`i~rte-income housing n~rggrame.
19 In a¢ditio to the_ ow .r~ granted by G.S. 153A-~~6 and G.S. i53A-3 7. any
20 county is authorized to exercise the following powers:
21 ~ To eneaee in and to gpnropriate and_ ~x~uend funds for resid ntial
22 housine construction, new oI rehabilitated, for sal or rental to
23 persons an families of low and mode ate income. Any board of
2~ cnmmiesinners may, contract with any person. associa 'on_ or
25 corporation_t~ implement the provisi of this subdivision.
04/06/1999 11:53 9198331058 PAGE 03
' GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 1999
1 l~ To acggire real nrQperty by voluntary purchase from the owners to
2 be developed by the county oho be used by the county to ,provide
3 affQrda~le housin, ~ to persons of low and moderate income
4 ~ Under procedures and standards established~v the county to
5 convey ,prone b~ rival te~sale_ to any public nr p,~vate entity_ at
b ~ r?rovideg affordable housin,~ to persons of low or moderate income
7 Tie county shall include as~art of anx such conveyance covenants
$ or conditionns that assure the property will be developed by the
9 entity for sale or lease to persons~f low or zt~oderate income.
10 ~ Under ~ rocedure~ and standards estabLshed (?v the county, to
11 convey residential pronerly~y private sale to persot}s of low or
12 ma grate income in accordance with G.S. 160A-267 and any terms
13 and conditions that the board of commissioners may, determine."
14 Section 3. G.S. 153A-149(c) is amended by addzng a new subdivision to
15 read:
lb " 15b Housi g. -- To undertake housing ~ograms for low- and
17 moderate-income persons as r~, ovided in G.S. 153A-3'Z8."
18 Section 4. G.S. 159-48(c} reads as rewritten:
19 "(c) Each county is authorized to borrow money and issue its bonds under this
20 Article in evidence of the debt for the purpose of, in the case of subdivisions (1)
2l through (4a) of this subsection, paying any capital casts of any one or more of the
22 purposes and, izt the case of stt~~i!~en-{3~ subdivisions 5}, and (61 of this subsection,
23 to finance the cost of the purpose:
24 (1) Providing community college facilities, including without limitation
25 buildings, plants, aztd other facilities, physical and vocational
2b educational buildings and facilities, including in connection
27 therewith classrooms, laboratories, libraries, auditoriums,
28 administrative offices, student unions, dormitories, gymnasiums,
29 athletic fields, cafeterias, utility plants, and garages.
30 (2) Providing courthouses, including without limitation offices, meeting
31 rooms, court facilities and rooms, and detentiozr facilities.
32 (3} Providing county homes for the indigent and infirm.
33 (4} Providing school facilities, including without limitation
34 schoolhouses, buildings, plants and other facilities, physical and
35 vocational educational buildings and facilities, including in
36 connection therewith classrooms, laboratories, libraries,
37 auditoriums, administrative offices, gymnasiums, athletic fields,
38 lunchrooms, utility plants, garages, and school buses and other
39 necessary vehicles.
40 {4a) Providing improvements to subdivision and residential streets
41 pursuant to G.S. 153A-205.
42 (5) Providing for the octennial revaluation of real property for
43 taxation.
Page 2 Senate DRS1b33
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GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 1999
1 ~}, Providing housing nroiects for persons of I~ow or m oderate income.
2 i~l uding construction or acquisition of projects to be own ed by a
3 bou nty redevelopment commission, or housing a uthority and shshe
4 pro vision of loans_ g.;ants. interest su~nleme nts. an d other
5 pZQ gramc of 'nsmcial ssistance to such_~rsons. A housin e nroiect
6 m_a v provide housin~~;nersons of other than l aw or m oderate
7 inc ome if at least twenty percent 2 %a) of the uni ts in the pLject
8 arP PaclusiveiX reserved for Tersons of low or m oderate incomg
9 No rent 5_ubsidv ma be uai from bond nr~oc_e_eds."
1,p Section 5. This act applies only to counties having a population i n excess
11 of 500,000.
12 Section 6. This aCt is effective when it becomes law.
Se~aate DR51633 Page 3
One Penny for Housing:
Creating a Housing Trust Fund in Orange County
We are calling for the Board of County Commissioners to support creation of a Housing Trust
Fund in Orange County. We propose that one penny on the tax rate be allocated on an
annual basis for affordable housing purposes.
Dedicating a revenue source will create a housing trust fund in Orange County to represent our
local commitment to maintaining a diverse community. There are currently over 110 housing
trust funds in the United States. These funds have spent more than $1.5 billion building and
preserving more than 200,000 homes and apartments for low-income families.
We request that the Board of County Commissioners join with us to ask our Legislative
Delegation to include Orange County in Senate Bill 708, a bill introduced by Sen. Fountain
Odom entitled "Affordable Hausingfl, which will extend legislative authority to enable
Mecklenburg County to use general revenues to support affordable housing. This bill amends
current statutes to allow counties to "engage in and appropriate and expend funds for
residential housing construction...". Members of our delegation have expressed interest in
supporting this legislation but need a resolution from the Commissioners requesting that they
offer a committee substitute to include Orange County in this legislation. We are here tonight
to encourage you to pass this resolution.
We are also requesting that Orange County join our other local governments in investing an
amount equal to 1 cent on the tax rate to capitalize a Housing Trust Fund to be supported by
local funds. To prevent double taxation of residents living in local municipalities we request that
the County's allocation be based upon properties outside of Chapel Hill, Carrboro and
Hillsborough.
Affordable Housing is a Critical Need
HUD estimates that more than 5,500 households in the County either live in substandard
conditions or pay too much each month in housing costs.
Only 368 new affordable homes and apartments were built between 1992-97.(1}
The average existing home price in the County is $180,000, while a family of four living at
80% of the median income can only afford to buy one at $119,000.(2)
As the University grows by 3,200 students in the coming decade, existing affordable
neighborhoods will be further strained.
Local Governments Need to Contribute Their Share for Affordable Housing
We cannot rely solely upon inconsistent state and federal funds to meet local obligations.
Of the $20 million invested in the County for affordable housing between 1992-97, only 5°~
came from local sources, which includes local government tax revenues.(1)
This proposal could yield approximately $650,000 annually -about three-quarters of our
entire annual allocation of HOME and CDBG funds from the federal govemment.(3)
This investment vuould be shared by all Orange County residents equally -one penny for
every $100 of assessed value. For a family living in an average-priced house in Orange
County, this would be about $18 per year.
The Money is Needed and Can Be Used
• Developers need steady, dependable financing sources to rationally plan their affordable
housing activities.
• Rising costs for land and construction have increased the amount of subsidy required to
make each unit of housing affordable.
• Current requests for HOME and CDBG exceed expected funding by nearly a quarter of a
million dollars, excluding funds needed for public housing renovations.
Habitat for Humanity, EmPOWERment, Inc., and Orange Community Housing Corporation
could easily use mare than half of the $1.8 million housing bond funds in the next fiscal
year alone. (4)
Administration
The HOME Consortium, which includes representation from all four local governments, is
an established vehicle for managing these funds.
• We propose that the housing trust fund use the current guidelines for the HOME program,
which offer an excellent framework for alkx•.ation of funds on aproject-specific basis.
• To develop the capacity and productivity of local nonprofit housing developers, we
recommend the flexibility to use up to 10% of a project award for administrative and
organizational development expenses.
• This proposal keeps decisions about local tax dollars at the local level.
Notes
(1) Report to Shaping Orange County Task Force, Jarxrary 1999
(2) Calculation of affordability using standard 2 1/2 times annual income
(3} Accoreng to the county finance erector, a penny on the tax rate in fish{ year 1998-99 would currently yield
$649,884: (Assessed value) (tax rate of .902/100) (collection rate of 98°.6) _$649,884. The assessed value
increases 2-4°,6 arwxaally.
{4) Taken from informal survey of ABODE members