North Carolina is expected to grow by more than 1 million people over the next decade. But we aren’t ready to accommodate that growth, because there is not enough housing. A group of N.C. Senate Democrats proposed a potential solution this month through Senate Bill 588, “Low-Income Housing Tax Credits.”
The tax credit is being re-introduced in the N.C. Senate after a previous bill expired — known as a sunset — in 2015. While the credit was still active, it was used to build over 80,000 affordable apartments across the state, according to N.C. Sen. Jeff Jackson, who is a primary sponsor of SB 588.
“It's probably the biggest lever we can pull in the area of affordable housing,” Jackson said. “We've seen results with this approach before.”
The bill was likely allowed to sunset as part of a number of tax credits that were not renewed under the Republican-led General Assembly.
“I think this probably falls into the category of a number of different things that got the axe due to very conservative leadership,” Jackson said.
He cited Senate Bill 576, “Recovery Rebate for Working Families Act” — an earned income tax credit — as another sunset credit, which he has also re-introduced in the Senate this session.
Jackson said the Republican-controlled General Assembly is unlikely to prioritize legislation like SB 588 — a bill without any Republican co-sponsors. However, he is hopeful that its previous success in creating affordable housing will make it at least a state budget priority.
Creating affordable housing needs to be done on two fronts: supply and true affordability.
The first is being addressed with SB 588. It is meant to build affordable units throughout the state and increase the supply.
The second lever in that equation is much harder to pull. Affordability is usually defined using Area Median Income, which is determined as the midpoint of a region’s income distribution. This is especially difficult in an area like Chapel Hill, where the AMI is just under $69,000. That figure is much higher than most counties in the state.
So, what is considered “affordable” by legal standards in Chapel Hill isn't actually affordable to most people that want to live here.
It is one of the reasons the population of Chapel Hill remains stagnant, even as the state experiences massive growth. But the Town needs to start building.
Housing is critical to achieving social equity and economic security for everyone. Chapel Hill needs to recognize just how critical it is as the state grows.
“However big the problem is now, it only stands to get worse,” Jackson said. “We need to address this, and one of the big ways is by creating more housing units. There's just no way around that as a major piece of this puzzle.”
SB 588 is a small, but necessary step towards adapting to our growing state and giving everyone the opportunity to live and grow in North Carolina.
This state is changing fast. If Chapel Hill wants to be on board with that change, it needs to build homes for all income levels.
To get the day's news and headlines in your inbox each morning, sign up for our email newsletters.