American Rescue Plan – Housing

Summary of “American Rescue Plan: Local Government Funding for Affordable Housing Development” by UNC School of Government’s Tyler Mulligan

The Federal American Rescue Plan Act of 2021 established Coronavirus State and Local Fiscal Recovery Funds (FRF) which will distribute substantial amounts of funds to state and local governments for the purpose of responding “to the public health emergency with respect to COVID-19 or it’s negative economic impacts.” The Interim Final Rule authorizes FRF to be used for “development of affordable housing to increase supply of affordable and high-quality living units.”

Please note that the federal government approving a particular use for FRF does not necessarily mean that NC local governments possess legal authority to engage in that activity. A comparison of the federal rules and the NC Constitution and NC state authority is below.

Federal Rules

In general, an activity is eligible for FRF if it is in response “to the public health emergency or its negative economic impacts.”

What type of affordable housing activities can be supported by FRF?

  1. Increasing supply of affordable and high-quality units
  2. Emergency home repairs for eligible households

Affordable housing activities must benefit “disproportionately impacted populations and communities.” The affordable housing activity must meet one of the following criteria to be eligible:

  1. Housing activity is in a Qualified Distressed Census Tract (QCT) designated by the U.S. Department of Housing and Urban Development (HUD). There are three QCTs in Region A: Census tract 9703.01 in Macon County, 9506.00 in Jackson County and 9203.00 in Graham County. Click the following link to view interactive QCT map: https://www.huduser.gov/portal/sadda/sadda_qct.html
  2. The housing is provided to households that experienced unemployment during the public health emergency.
  3. The housing is provided to households that experienced increased food or housing insecurity during the public health emergency.
  4. The housing is provided to households that are low or moderate income.
  5. The housing activity will serve locally defined populations that experienced disproportionate public health or economic outcomes as a result of the public health emergency. These locally defined populations must be identified and supported by local officials.

North Carolina Constitution

The North Carolina Constitution states that expenditures must serve a constitutional public purpose. Direct aid to the poor, disaster aid and provision of affordable housing are permissible public purposes.

Eligible uses under NC statutory authority

Local governments must be granted statutory authority to engage in activities and such activities must be applied in a constitutional manner.

NC Statutes related to FRF eligible housing activities are:

  1. Emergency assistance for home repairs or weatherization
  2. Development or rehabilitation of affordable housing under housing authority powers
  3. Development of affordable housing without housing authority powers
  4. Lease of land for development of affordable housing
  5. Conveyance of property to a nonprofit for development of affordable housing
  6. Low- and moderate-income homeownership

For more information, please see the following Coates’ Canons blog post titled: American Rescue Plan: Local Government Funding for Affordable Housing Development

https://canons.sog.unc.edu/american-rescue-plan-local-government-funding-for-affordable-housing-development/#utm_source=rss&utm_medium=rss&utm_campaign=american-rescue-plan-local-government-funding-for-affordable-housing-development