Buncombe Reviews Affordable Housing Policy - TribPapers

Buncombe Reviews Affordable Housing Policy

Buncombe County Chair Brownie Newman asks if some of the affordable housing strategies in the revised policy will actually help create more affordable housing. Screenshot.

Asheville – Buncombe County’s Community Development Division Manager Matt Cable updated the commissioners on staff’s work on revising guidelines for awarding funds via its Affordable Housing Services Programs (AHSP). Staff is looking at seven programs through which the county avails funding for affordable housing. One of these, the Administrative Support Program, is something staff will be seeking approval to create.

The county’s Construction Loan Program requires a fair amount of accountability from the recipients. The only major issue staff is studying is whether or not rehabilitation of existing affordable housing can qualify for a construction loan.

The Down Payment Assistance Program awards funds to organizations that pass the loans to homeowners who comply with the county’s requirement that they take homeowner education coursework. These are 0%, non-forgivable loans that won’t become due so long as the homeowner owns and occupies the home and does not refinance it. No significant changes were recommended for this program.

No significant changes were recommended for the Tenant-Based Rental Assistance Program or the Construction Grant Program, either. The former provides grants of up to $1,500 per household for deposits, moving expenses, or the first month’s rent; and up to $2,500 per household to prevent eviction. The latter is available to nonprofits in awards of up to $25,000 for non-revenue-generating units.

Due to rising costs, staff is interested in changing thresholds for the Emergency Repair Program. If approved, organizations “with no financial interest in the units being repaired” would receive up to $25,000 per home investment. Also, liens would be required only when repairs were valued at $15,000 or more, and payoff periods would be no longer than three years. The former caps were $15,000, $10,000, and ten, respectively.

New Start programs, created last year, are described as, “providing opportunities for affordable and safe housing for healthy and thriving families and neighborhoods that are innovative in approach.” As an added bonus, “funding may include administrative and program implementation costs.” Citing inflation again, Cable said the maximum New Start award would be raised from $25,000 to $50,000.

The new Administrative Support Program was created in response to “community partner feedback.” Cable said staff had been hearing that these organizations were having problems accessing funding for this purpose. The program would offer awards of up to $50,000.

To be eligible for any AHSP funds, projects must meet the county’s goals and objectives for affordable housing, accept vouchers, and take advantage of other grants and loans. Cable explained the county is, “typically [only] a gap funder.” The projects are also evaluated on various subjective criteria.

Recommended changes to fund administration include sticking to long-stated ambitions of making awards only during the budget cycle, so the commissioners can evaluate all projects at once, instead of receiving urgent requests throughout the year. Also, the construction loans came with the proviso that the recipients would be ineligible for property tax exemptions for the life of the loans, but some partners were of the opinion that this could stymie certain projects. Other changes sorted out roles and responsibilities for the commissioners, the Affordable Housing Committee, and the Community Development Division.

In response to questions from Commissioner Terri Wells, Cable said: (1) The period of affordability on most units is longer than would be calculated from the AHSP documents because projects will be receiving loans that are more restrictive, (2) The county cannot make AHSP funds available to families earning more than 80% AMI because of North Carolina General Statutes, and (3) Bond funds, as well as AHSP funds, should allow the county to better meet increasing demands for emergency repairs.

Chair Brownie Newman had questions about the lien triggers. Cable explained that the county’s contracted providers, namely Mountain Housing Opportunities and Habitat for Humanity, had been submitting requests for just under the lien threshold, stating the liens were a hindrance for certain projects. One example Cable gave was that elderly people typically don’t want to pass on encumbrances to their heirs. Newman said he would like staff to review whether the administrative hassle of getting a lien was worth whatever benefit the county hoped to receive. He supposed the disincentive imposed by the liens far exceeded any probability that somebody would get one of the loans to flip a house.

Newman also thought staff should “spend more time” evaluating whether or not the prohibition on tax exemptions should be waivable. He said property tax abatements were rather substantial, and he didn’t think the county should be “sending the signal” that they were available if they were only going to be awarded “for very rare exceptions.” He said if people needed more money for their projects, it would be more straightforward to raise the cap. Making it a discretionary option, he thought, would muddy expectations for developers. “Everybody’s going to say they need it. I guarantee you.”

Cable said one reason seeking the property tax exemption had been prohibited was that the exemption was, “a source of revenue to offset the expense of a loan that’s not necessarily being paid back.” That is, to justify the program, the county would like to see that, over the course of the loan, enough property taxes were generated by the property to help cover the costs. He added that, in order for a project to receive a waiver, the county would have to demonstrate the waiver was necessary.

County Manager Avril Pinder said staff would not change the waiver prohibition until a more thorough analysis could be conducted. The remainder of the changes would come before the commission on December 5 for a vote.

The commissioners also received an update on the general obligation bonds just approved by voters. One called for floating $30 million in debt for conservation easements; the other, $40 million for affordable housing. Next steps include hiring two project managers and deciding upon criteria defining project eligibility. The county has also begun taking applications from citizens interested in serving on an oversight board. Eligible candidates will either be members of the Asheville Area Chamber of Commerce or have a background in accounting, banking, or finance; affordable housing; conservation; or greenways.