North Carolina has a shortage of affordable homes, so the North Carolina Housing Finance Agency (NCHFA) was created to address housing issues. On Tuesday, April 2, the Local Government Commission (LGC) approved a request from the agency to issue $750 million in revenue bonds to continue its efforts.
In its 2024 annual report issued in March, the National Low Income Housing Coalition determined there are 326,751, extremely low-income households in North Carolina, but only 130,930 affordable rental homes. By 2030 new home construction will fall well short of the need for an additional 900,000 houses created by population growth, research shows. The N.C. League of Municipalities has called housing affordability in the state “a crisis.”
The NCHFA, created in 1974, leverages public funds with private investment. It has financed 310,700 homes and apartments for a total of $31.9 billion. It will use the three-quarters of a billion dollars approved Tuesday, in part, to increase the state’s supply of affordable housing for low- and moderate-income families. Proceeds from the bonds will be used to buy mortgage loans or other mortgage-related obligations from mortgage lenders.
This marks the second time the agency has come before the LGC with a request of that amount. An earlier request was approved in October 2023. By contrast, the LGC approved just $418.5 million in financing for affordable housing in all of fiscal year 2022.
The LGC, chaired by State Treasurer Dale R. Folwell, CPA, and staffed by the Department of State Treasurer (DST), has a statutory duty to approve most debt issued by units of local government and public authorities in the state. The commission examines whether the amount of money that units borrow is adequate and reasonable for proposed projects and confirms the governmental units can reasonably afford to repay the debt. It also monitors the financial well-being of more than 1,100 local government units.
There were over $803 million in other financing requests on the agenda for Tuesday’s meeting.
Wake County received LGC approval for a $184 million refunding of general obligation bonds at lower interest rates that will save nearly $9 million in payments. The county also got a green light for $137 million in limited obligation bonds to refinance a bank installment financing agreement used to build and renovate school buildings, and for equipment.
The N.C. Turnpike Authority gained approval to refund $215 million in Build America Bonds that were used for construction of the Monroe Connector Toll Road in the Charlotte area. The Turnpike Authority will now exit the Build America Bonds structure, thus avoiding potential future federal subsidy cuts, while lowering debt service payments, but it hinges on a complicated process.
The city of Charlotte (Mecklenburg) has several projects lined up for which it needed $137 million in certificates of participation. The LGC voted to approve the financing. The work includes improvements and renovations to government buildings, the purchase of a police helicopter, vehicles and equipment, and refinancing prior debt obligations at a savings of about $1.2 million.
CarolinaEast Health System (Craven County) successfully asked the commission to approve a $45 million unsecured line of credit to pay for day-to-day operational expenses. The system is experiencing cash flow issues and financial needs due to a cyberattack against Change Healthcare that disrupted services at the health system. Change Healthcare is a claims management vendor and subsidiary of UnitedHealth Group that provides services to CarolinaEast Medical Center.
The city of Wilmington (New Hanover County) received the go-ahead to issue $32 million in limited obligation bonds for multiple capital projects including street, streetscape and riverwalk improvements, and construction of a portion of a sports complex.
LGC members gave a thumbs-up to Inlivian Housing (Mecklenburg County) to issue $30 million in conduit revenue bonds. The proceeds will be loaned to Poplar Grove Preservation, a New York limited partnership, to acquire, rehabilitate and equip a multifamily residential rental facility known as Poplar Grove Apartments. Lower-income residents would be sought for the 130 units in three residential apartment buildings.
Cleveland County Water won LGC approval for $12 million in U.S. Department of Agriculture bonds to make improvements to weirs (low dams). The work is intended to eliminate sand buildup that contributes to erosion of creek banks.
The LGC OK’d a request from High Point (Guilford County) to issue $5.4 million in general obligation bonds to extend Samet Drive, which would open an area for development. Some of the proceeds will be used to widen Triangle Lake Road, add sidewalks and bicycle lanes.
LGC members passed a request from Southern Pines (Moore County) for a nearly $3 million state revolving loan to improve the town’s wastewater collection system. The Warrior Woods Pump Station currently becomes inundated and inaccessible during floods. Engineers have deemed the pump station at the end of its useful service, so it will be relocated outside of the flood plain. That should avoid future wastewater overflows.
The LGC voted in favor of a request from Manteo (Dare County) for a $1.8 million state revolving loan to replace an existing chlorination disinfection system with an ultra-violet disinfection system. A standby generator will be acquired.
Roxboro (Person County) plans to replace four aging police vehicles and two garbage trucks. The LGC approved a $949,800 installment purchase that will allow the town to make payments on the vehicles over time instead of providing for all costs up front.
Junaluska Sanitary District (Haywood County) will enter into a $750,000 installment purchase approved by the LGC to buy a parcel of property. It will relocate its existing office, which has fallen into disrepair.
In other action, the LGC was informed that 139 counties and municipalities missed the April 1 deadline to submit annual audits. By the numbers:
- 122 of 549 municipalities
- 17 of 100 counties
- 103 of the local government units have late audits for 2023 only
- 33 of the local government units are missing audits for two years
- 3 local government units are missing three or more years of audits