NEW HANOVER COUNTY — The Cape Fear Housing Coalition’s annual breakfast brings together community leaders to hear about ways to address affordable housing. This year’s event started a conversation about housing trust funds, but not before the crowd was confronted with housing challenges brought on by the Trump administration.
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“There are absolutely existential threats to the affordable housing and community development work that so many people in this room engage in,” Samuel Gunter said during the breakfast’s legislative update. Gunter is the executive director of the North Carolina Housing Coalition.
North Carolina has roughly $1 billion in federal housing investments that could be jeopardized in the array of recent government actions. The Trump administration has paused unappropriated federal grants to be reviewed by Elon Musk’s Department of Government Efficiency. DOGE has also ordered the Department of Housing and Urban Development to cut half its workforce, totalling 4,300 people.
“No amount of philanthropy replaces a billion dollars in housing across the country,” Gunter said.
In a March 14 executive order, Trump ordered the elimination of all nonstatutory functions of the Community Development Financial Institutions Fund and the U.S. Interagency Council on Homelessness. However, the Treasury Department has stated the Community Development Financial Institutions Fund comprises 11 programs or functions, all legally required; thus, the executive branch doesn’t have the authority to halt them.
Among the executive orders the coalition must comply with are the prohibitions on diversity, equity and inclusion initiatives; Gunter said it has already seen federal contracts canceled at their mere mention of “diversity” — even in someone’s LinkedIn profile.
“All affordable housing and community development programs could conceivably be labeled a DEI program,” Gunter said, as programs can be geared toward underserved populations, such as racial minorities, seniors, or people with disabilities.
Gunter told the audience he could feel “tension” in the room as his remarks veered into politics, but noted housing providers are feeling stretched every day on the job due to the current climate of uncertainty. However, he said those doing the work — and those making policy and funding decisions — don’t have to sit back and watch.
“In that time of utter chaos, there is a chance for you to claim — and creatively claim — solutions that work for your community, that you have more control over and agency, to meet the need that you can identify with your neighbor from down the way,” Gunter said.
One way to keep funding flowing through local means could be housing trust funds, essentially dedicated funding streams for financing assistance for affordable housing projects.
There is a federal HTF that distributes annual grants to states, 80% dedicated to rental assistance, 10% for homeownership, and 10% for the grantee’s reasonable administrative and planning costs. The North Carolina General Assembly established its HTF in 1987. It leverages private funding to create a variety of housing solutions — homeownership, rental, supportive housing, new construction, rehabilitation, and emergency repairs. The fund was established with almost $20 million, though the fund balance now sits at a little more than $6 million.
Local governments have the ability to set up housing trust funds to dedicate a funding stream to affordable housing they have more control over; several North Carolina municipalities, including the City of Charlotte have set up one of their own. Representatives from the City of Charlotte and City of Pittsburgh led a question-and-answer session Friday on their programs.
“We have rising housing costs, we have income inequality, we have a limited supply of housing, and then we have population growth, especially here in North Carolina — that’s the recipe for a housing crisis,” Charlotte HTF manager Michael Englehart said.
Charlotte’s fund, established in 2001 and now at $100 million annually, is strictly a gap financing provider to help get projects, particularly housing development, off the ground that otherwise would struggle due to the low profit margins associated with affordable housing. The funding provided is a loan, not a grant, but typically financed at a lower or nonexistent interest rate.
The fund is split into different categories: rental housing production, which has the highest allocation of $35 million; rental housing preservation and anti-displacement; supportive housing and shelter capacity; and rehab and emergency repair innovation pilot fund. Englehart said the fund has recently shifted its focus to housing stability, or keeping people in their homes, rather than increasing housing supply.
Since its formation, Charlotte’s HTF has created or preserved 10,869 affordable units and 888 shelter beds, 3,690 of those units being reserved for households earning less than 30%of the area median income.
The City of Pittsburgh’s HTF is more recent, formed in 2015 via a recommendation from a government task force. At Friday’s breakfast, a representative of the fund, Derek Kendall- Morris, reported the task force found the city had a 20,000 unit gap back in 2015.
“We knew the existing resources coming from the federal government weren’t enough and had never been enough … so we needed to do something different,” Kendall-Morris said.
The city decided to dedicate $10 million annually to the HTF, funded through a 1% increase to the realty transfer tax.
Pittsburgh’s HTF has the following programs: down payment and closing cost assistance, homeowner assistance, housing stabilization, legal assistance, rental gap, for-sale development, small landlord fund. In 2023, the city financed 1,467 units through these various means.
Kendall-Morris said the HTF took two years of advocacy work to get it off the ground, mostly convincing leaders and the community the impact of a tax increase would not greatly affect the real estate market. To stay accountable to the community, the HTF surveys residents every year about the fund’s work.
In Charlotte, the HTF has to renew its cause every two years. As the city collects the funding from bonds, the Charlotte voters have to approve of the HTF funding via referendum every other November. In the 2024 cycle, residents approved an increase in the fund from $50 million to $100 million annually.
“We’re very fortunate in the city of Charlotte that we have a very supportive electorate,” Englehart said, adding the biggest challenges happen on a micro level when residents oppose details of certain projects.
A HTF would be a new addition to the City of Wilmington and New Hanover County, should government officials decide to take up the idea; however, the city does allocate 1 cent of its property tax collection to affordable housing. The commissioners also pledged $15 million over five years in 2021 to affordable housing. Both municipalities have also used Covid-19 relief funds for gap financing.
And then there is the New Hanover Community Endowment, which has launched an Affordable Housing Investment Strategy with a $19 million allocation. The Endowment announced last year it, too, was studying ways to establish a fund to help provide capital for projects.
“This has been discussed for probably about 15 to 20 years, of what a Housing Trust Fund might look like,” Terri Burhans, community development network officer at The Endowment, said last May. “We’ll be studying what the fund might look like to deploy some low cost capital into the community to address some of the gaps that we’re seeing in really developing those properties.”
Jeff Hovis, chair of both the Cape Fear Housing Coalition and Wilmington Housing Authority, stated the coalition’s interest in exploring a Cape Fear housing trust fund further.
“In our situation, I think we’re going to have to work with the city and the county,” Hovis said. “We’re small. We’re going to have to figure out how we and all of our organizations can kind of start that conversation.”
Port City Daily asked Hovis on Monday if the coalition had talked with the endowment about a HTF.
“We have been talking to a number of stakeholders in our area,” he wrote in an email. “Ideally, we would have a HTF that was independent of the Foundation so there was the ability for multiple funding sources and joint cooperation. We feel our group could serve as the conduit for the city and county to hopefully join force to establish a HFT in our area. We will definitely consult the Foundation as their experience and expertise will be key.”
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