The North Carolina Housing Finance Agency recently published a housing market overview and summary of the Harvard University’s Joint Center for Housing Studies annual update of the status of the country’s housing, The State of the Nation’s Housing 2024 released in June 2024.
The overview can be found at this link. https://www.nchfa.com/state-nation%E2%80%99s-housing-2024-report-what-does-it-mean-north-carolina-housing-market-overview
The Agency, quoting the JCHS report, states: “Nationwide, housing unaffordability remains the key challenge facing both renters and homeowners, and solutions are desperately needed.”
The summary states that housing is increasingly unaffordable and out of reach for many, and the report points to all-time high home prices, elevated interest rates and increased insurance premiums. Home prices are up 5.6% in 2023 and 47% since the beginning of 2020 while rents remain high, up 26% since 2020 (28% in the South region that includes North Carolina).
The Housing Finance Agency notes a shortage of affordable and low-rent units “with almost all states losing at least 10% of their low-rent units and about half of the states losing more than 20%, North Carolina included.” Rents have increased 21% since 2001 while incomes have only increased 2% during the same period (both figures adjusted for inflation), according to the report.
There is some good news for affordable housing advocates in a time of political polarization and partisan rancor: strong bipartisan support in both the U.S. House of Representatives and the Senate for The Affordable Housing Credit Improvement Act (AHCIA), introduced in 2023 as S.1557 and H.R. 3238. Important features of the AHCIA are included in a tax package currently being debated and considered in 2024.
Advocates report that this legislation has broad bipartisan support and that nearly half of all members of Congress, members from both parties in both chambers have signed on as cosponsors of the legislation. Both of North Carolina’s Republican Senators, Ted Budd and Thom Tillis, have cosponsored the Senate bill and at least eight members of the House from the North Carolina delegation, 4 Democrats and 4 Republicans, are cosponsors of the House bill.
The Affordable Housing Tax Credit Coalition claims that passing the AHCIA is “the single most important Congress can take to address our nation’s affordable housing supply crisis.” The Coalition estimates that nearly 2 million additional affordable homes could be financed in the U.S. over the next decade if Congress were to enact the primary unit financing provisions in the proposed law. Passing the new law is also estimated to generate 3 million jobs, $115 billion in additional tax revenue and $333 billion in wages and business income.
The AHCIA would also help address a critical affordable housing shortage in North Carolina. A Cato Institute study published in December 2022 notes that North Carolina needs 900,000 additional homes over the next 10 years to meet the demands of a growing population. Affordable housing and workforce housing is not only a housing issue, but an “access to talent issue.” A 2021 survey of local small businesses in western North Carolina noted by the Cato study emphasized the “pressing need for more affordable housing. Local businesses directly connected this issue to the challenges of being able to find workers and pay living wages.”
Ellinger Carr lawyers work with a number of clients, including nonprofit and for-profit affordable housing developers and with the cities of Raleigh, Charlotte, Chapel Hill, Durham and Greensboro on their community development and housing and neighborhoods initiatives to promote, preserve and sustain affordable housing in our hometown and across the Southeast, including North Carolina and South Carolina. We support the legislation and the local government initiatives and are happy to see these important needs being addressed to serve families and seniors who need safe, decent and affordable homes.