NCFAA Advocacy Update

NCFAA Advocacy Update

We understand this is a tumultuous time for the housing industry and with the near future looking uncertain, we would like to update the membership on some of the current advocacy NCFAA is undertaking. Due to the financial instability created by COVID-19, we have seen many new landlord-tenant related ideas arise in city and county commission chambers. In response to this, NCFAA has taken a proactive approach to get ahead of any harmful ideas by reaching out to local officials and providing them with alternative solutions that are beneficial to the housing industry. Please know that these are only some of NCFAA’s current advocacy efforts.

Alachua County

Alachua County plans to announce their CARES individual assistance grant program next week. This program will be funded with $21.1 million from CARES money the county recently received. This program is aimed at assisting those that were financially impacted by COVID-19. We have been engaging with the county while they work on this program. We asked for them to send the rental assistance directly to the landlord to ensure the money was being used for its intended purpose, along with ensuring the program would be as efficient as possible. Many programs around the state have been inefficient due to very stringent criteria in order for an applicant to even qualify. These programs then require many documents to be submitted by the applicant, which ends up slowing down the entire process and delaying the receipt of any financial relief by weeks. We want to ensure that this program is streamlined and efficient in order to maximize its usefulness in securing the housing provider’s financial future. NCFAA is excited for the introduction of this program because we believe providing rent relief is the best solution to the current housing crisis created by COVID-19. 

Gainesville

The City of Gainesville is looking to move forward with plans to improve racial equity within the city. One of their goals for improving racial equity is to provide more affordable housing to lower income neighborhoods. In light of this, the commission has started discussion on the idea of a building moratorium in certain neighborhoods. This is in response to complaints that market rate developments are gentrifying these neighborhoods. Unfortunately, instilling a building moratorium only inhibits development which is greatly needed during a housing shortage, therefore, we have begun to engage with the city on this matter. While we support the city’s goal to improve racial equity, we also want to share our knowledge on the harm a building moratorium may cause and provide alternative solutions to their housing affordability problem.

Our goal is to provide research backing our belief that if the city provides the proper incentives, developers will contribute to solving the demand for affordable housing. We also understand that even market rate housing developments lead to more units becoming available and thereby increasing the supply of affordable housing through chain migration. The commission has stated it’s mixed feelings over a building moratorium. Some believe it doesn’t address the problem the right way. Our industry too believes that a building moratorium is not the solution to this problem and that it would only exacerbate the housing shortage. This idea is still in the discussion phase and NCFAA is looking forward to continuing our engagement with the city by providing them with different solutions that are more friendly to our industry. These solutions address the housing affordability shortage without interrupting the city’s goal of improving racial equity. Because of mixed reviews over a building moratorium, the Commission is also pursuing alternative solutions to improving affordable housing in Gainesville. We are excited for this opportunity to see some of our advocacy efforts come to light. 

Affordable Housing 

In an effort to promote affordable housing, an issue that has really come to light during the public health crisis, one commissioner is pursuing four ideas that, if implemented properly, will result in a positive outcome for our industry. The commissioner is looking into establishing a community land trust, inclusionary zoning requirements, vacancy fees and eliminating exclusionary zoning. 

A community land trust will allow for developers to purchase land at significantly lesser cost. Land costs is a major factor in determining the financial costs of a development and later in determining rent. If the city can reduce the cost of land, then the developer can reduce the cost of living there. This is something the association has been advocating for quite some time. This a very positive step forward in the direction of creating more housing. 

Inclusionary zoning requires a developer to designate a certain portion of the development’s units as affordable. The commissioner is aware of HB 7103, which passed because of our efforts, during the 2019 session. This bill prohibits local governments from enacting a mandatory inclusionary zoning requirement unless the municipality offers incentives that fully offset all costs to the developer for his or her affordable housing contribution. We support a voluntary inclusionary zoning requirement that will allow a developer to choose if they want to include affordable housing and if they do, then they will receive incentives to offset the costs. This will incentivize developers to build more affordable units and ease demand without putting a strain on the financial feasibility of the project.

We have already engaged with the commissioner to share that the association has strong concerns with a mandated inclusionary zoning requirement. While well intended, mandatory inclusionary zoning ordinances that often lack the proper incentives, constrain the market, and increase demand. This is because inclusionary zoning ordinances are, in effect, taxes on new development. Much research shows that these types of requirements deter future development. Luckily if this requirement was put into place our concerns would be mitigated by HB 7103, but it was important to explain that keeping a voluntary program in place is the best option. If the local government wants more affordable housing they should provide the proper incentives because they will receive a better result when it is a partnership rather than a requirement.

A properly incentivized IZ policy will address all aspects of development to successfully stimulate the construction of affordable housing. Examples of these comprehensive incentives include:

• Providing large density bonuses, range the number of bonus market rate units to 3x the number of affordable units,
• Impact fee waivers,
• Offsite production of affordable units,  
• Tax abatement scaled to the number of affordable units in a development, 
• Eliminate project fees, 
• Expedited review, 
• Design flexibility and reduced parking requirements,
• Local finance program (infrastructure funding), and
• Option of a fee in-lieu of units

The commissioner is also pushing for the option to implement vacancy fees in the form of utility taxes. This would only apply to land that has been vacant for some time in order to incentivize the owner to sell or build upon it. We were told this would not apply to vacant multifamily units. 

Last but not least, the entire commission is interested in reducing exclusionary zoning policies. The term exclusionary zoning applies to policies put into place that limit development in certain areas. Many times these policies exclude multi family zoning because of misconstrued ideas surrounding a multifamily property and its tenants. We would support any introduction of legislation to reduce the difficulty for building multifamily developments. This type of legislation would include rezoning areas of the city (from solely single-family or commercial to multifamily) or reducing the difficulty for rezoning permits and variances to allow for multifamily projects.

Looking Foward

While we continue to engage with the city on productive solutions to the housing affordability crisis and direct them to solutions that will be beneficial to the industry, we would like for the membership to provide any feedback they may have regarding the commission's ideas. Please understand that the association will continue to stay hard at work advocating on behalf of the industry even after the conclusion of these issues. If you have any questions regarding our current advocacy efforts, please feel free to reach out to William Jaycox at william@faahq.org