Housing GSO: HRA Greensboro Affordable Housing Plan

AFFORDABLE RENTAL HOMES

DEEPER AFFORDABILITY | Overview

Key Partners • City of Greensboro - NDD • LIHTC Developers

Low-Income Housing Tax Credit (LIHTC) awards are the primary source of subsidy for affordable rental housing. LIHTC is a federal program that provides tax credits to support the creation of affordable housing. There are two types of LIHTC awards: 9% awards, which are competitive and typically provide about a 70% subsidy to a project, and 4% awards, which are non-competitive and provide about a 30% subsidy to a project. In North Carolina, LIHTC awards are allocated by the North Carolina Housing Finance Agency (NCHFA). Developers applying for 9% awards in Greensboro compete against proposed projects in other major North Carolina cities and within Guilford County against projects proposed in High Point. The City provides additional subsidy using HOME and bond funds to support 9% LIHTC affordable multifamily projects through its Multifamily Affordable Housing Development Loan program. Since the passing of the 2016 Housing Bond, the City has provided over $2,100,000 in additional gap funding to support three LIHTC development projects.* The City can fund additional rental housing units affordable to households earning below $20,000 in the 9% LIHTC projects it supports. Providing gap financing to projects enables the City to assert influence into the process of supporting affordable housing development. With this influence, the City should fund additional extremely low-income units in the developments to which it grants support. To further ensure its gap financing goes to projects that align with City priorities, the City should also encourage projects to include a portion of supportive units that go above the minimum required by NCHFA. In addition to providing subsidy, the City should review other requirements placed on affordable housing developers and identify opportunities for improvement, such as reduced permitting fees, accelerated review processes, and reduced infrastructure investment requirements to support development feasibility. The City should encourage additional units at deeper levels of affordability in projects to which it grants funding. Households earning $20,000 and below face the most critical need. Providing subsidy to support increased production of rental housing units affordable to these households will help address the existing affordability gap. *The City has allocated approximately $2.1 million in funding to support the construction of the 4% Printworks Lofts, 9% Ryan Ridge, and 9% Elmsley Trail LIHTC projects, per the City of Greensboro’s Bond Tracker in January 2020

Action Steps

1. Modify RFP requirements for the Multifamily Affordable Housing Development Loan program to

encourage additional units affordable to households earning <$20,000 that go beyond NCHFA minimums

2. Communicate new provisions to developers

Anticipated Cost to Implement: ~$45K Per additional unit affordable to households with annual incomes <$20K

HR&A Advisors, Inc.

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