Bill
SB 1055
The bill significantly expands affordable housing by-right development and streamlined approvals while boosting financing, grants, and workforce programs to accelerate production a
Carolina Housing Promise Act (SB 1055, Session 2025, North Carolina)
Overview
- Purpose: A comprehensive package aimed at addressing housing affordability, production, accessibility, homelessness, resilience, and related economic development. The bill creates new programs, expands housing production by right, enhances financing and incentives, and establishes workforce and homelessness supports, with multiple funding provisions and effective dates beginning July 1, 2026 (with some components earlier or later as specified).
Key Provisions by Part
Part I – Housing Finance Agency Enhancement
- Bonding authority expansion:
- Allows the North Carolina Housing Finance Agency to issue bonds, notes, and related financing instruments (including bond anticipation notes and construction loan notes) with total outstanding limits set between $12 billion and $18 billion, subject to commission approval and revenue sources.
- Real property transfer tax provisions:
- Modifies state excise tax on real property conveyances (G.S. 105-228.30) and related distribution, with a mechanism to fund a Housing Innovation Office (see below).
- Housing Innovation Office funding:
- Adds a $5 million recurring appropriation (beginning 2026-27) to the Housing Finance Agency for an Innovation Office to support housing solutions, grants, loans, and research.
Part II – Housing Production and Affordability
- By-right development for affordable housing (new Part 1A of Article 9, Chapter 160D):
- For areas zoned for residential use, local governments must allow by-right:
1) At least one attached and one detached accessory dwelling unit (ADU) per single-family detached dwelling, conforming to NC Residential Code (including fire codes). ADUs may be built concurrently or after primary housing.
2) Developments in areas with at least 20 units per acre near transit or within transit-oriented districts.
- Administrative review for affordable housing (§ 160D-917.1):
- For qualifying affordable developments, local governments must complete administrative review within 30 days (or 60 days for certain projects) and provide a complete/deficiency notice with a detailed deficiency list and required corrections.
- Qualifying affordable development test: at least 20% of units reserved for households at 80% AMI or 10% at 60% AMI; 30-year deed restrictions; minimum 8 units; accept Housing Choice Vouchers; comply with habitability standards.
- Provisions for corrections, explanations, or appeals; written notice of completeness or remaining deficiencies within 10 business days after correction.
- Lot size and density for affordable housing (§ 160D-917.2):
- For towns with population >10,000: minimum lot size not less than 1/4 acre; minimum density not less than 8 units per acre.
- Density bonus: at least 35% density increase if at least 15% of units are reserved for low-income residents (defined as 60% or less of AMI).
Part III – Home Ownership and Accessibility
- Tax deductions for first-time home buyers:
- Adds a deduction for up to $15,000 deposited into a first-time home buyer savings account (account holder must be NC-based, up to $150k, with defined eligible expenses and residency requirements).
- Additions to gross income:
- Adds back to gross income any prior year withdrawal from a first-time home buyer savings account not rolled over.
- Funding and programs:
- $3 million recurring to NC 1st Home Advantage Down Payment Program (2026-27 onward).
- $10 million recurring to support community land trusts (CLTs) with terms favoring long-term affordability and allowable costs.
- Rural water extension program: $15 million recurring to support water and sanitation infrastructure.
- Rural affordable rental housing credit program (G.S. 105-153.13) offering up to $25,000 per unit or 30% of construction costs (whichever is lower) for rural affordable rentals; requirements include AMI targeting, permanence of affordability, and 5-18 units per building.
- Manufactured home replacement/repair: $10 million recurring for a program to aid replacement/repair of manufactured homes, with caps (up to $25,000 per home).
Part IV – Hurricane Recovery and Resilience
- Emergency housing response fund (NCORR): $100M to respond after major disasters; expedited permitting and code flexibility for like-for-like rebuilding.
- Voluntary buyout fund: $50M for buyouts in flood-prone areas; purchases up to 110% of pre-disaster FMV.
- Reporting requirements on fund use, permitting times, and clawbacks.
Part V – Housing Affordability and Financing Mechanisms
- Housing Innovation Office studies on incentives, financing, partnerships; reporting by Jan 1, 2027.
- State Auditor to audit all housing programs with annual budgets of $10M+ beginning biennially, starting 2026.
Part VI – Adaptive Reuse and Conversion
- Short-term rental conversion credit (G.S. 105-153.14):
- Hotel/motel with 30+ rooms converting to affordable rental units may claim a credit: 30% of conversion costs or $40,000 per unit, whichever is less; applies to the year of completion.
- Expedited permitting and code flexibility for conversions (station within hotel/motel footprint) with safety standards preserved.
- Funding for conversion assistance: $2 million nonrecurring for 2026-27 to offset conversion costs (architectural, feasibility, etc.).
Part VII – Tenant Protections and Rental Affordability
- Emergency Rental Assistance Fund: $30 million recurring to provide short-term rental/housing assistance for low-income households and the homeless; includes reporting to credit agencies on timely payments.
- Expanded tenant protection provisions (effective 7/1/2026).
Part VIII – Homelessness Prevention and Solutions
- Rental and wraparound services funding: $35 million recurring for homelessness services starting 2026-27.
- Rapid Rehousing Program: $20 million nonrecurring for temporary housing and case management; coordinated entry opportunities for fair access.
- Funds may be allocated to local housing authorities to support fair access.
Part IX – Construction Workforce Development
- Housing Advancement (new Part 21A in 143B-472.124):
- Workforce development grants for higher-ed institutions to expand home construction trades training.
- Apprenticeship subsidies for qualifying employers; up to $2,500 per apprentice; emphasis on industry partnerships and direct-to-hire pathways.
- Innovation grants for research into cost-reducing building methods and materials.
- $50 million General Fund appropriation in 2026-27 for these programs, allocated across workforce development, innovation, and apprenticeship.
Part X – Fair Housing and Equity
- NC Human Relations Commission: $3 million recurring to investigate housing discrimination under the Fair Housing Act.
- Equitable Development Account: $25 million to fund infrastructure improvements in persistently poor areas or high-cost housing areas, to be allocated by the Department of Commerce.
Part XI – Effective Date
- Most provisions become law upon enactment; several parts specify July 1, 2026 or January 1, 2026 effective dates for taxable-year-related provisions and credits.
Potential Impacts
- Significantly expands by-right and accelerated approvals for affordable housing, potentially speeding up development.
- Introduces new or enhanced financing mechanisms and credits to stimulate private investment, CLTs, and rural affordable housing.
- Allocates substantial funding for homelessness prevention, emergency rental assistance, and rapid rehousing.
- Emphasizes workforce development in construction trades to support housing production.
- Creates resilience funding for disasters, and programs to support hurricane recovery and mitigation.
- Introduces new administrative processes for housing data, equity, and fair housing enforcement.
Note: This summary reflects the bill’s stated provisions as filed and the associated effective dates. For implementation details, see the full text and any amendments adopted during committee or floor action.
Compiled from official sources — confirm details with the bill’s official record.
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