North Carolina is facing an affordable housing crisis, and it’s become an issue in the race for governor. One Republican candidate is proposing a tax credit for first-time homebuyers.
Salisbury attorney Bill Graham is looking to stand out in the GOP primary, where he faces Lt. Gov. Mark Robinson and State Treasurer Dale Folwell. Graham has touted his plan to help homebuyers in social media posts and interviews.
"To get first-time homebuyers here in this state a leg up, we want to give them tax relief," he told Greenville radio station WTIB. "So that's the conservative message that we need to be pushing. That's what I'm going to be pushing. And, I know in politics, people say, 'Well, you need to go negative,' but you have to do something positive. What are you going to do for the people?"
Graham declined to be interviewed for this story, but his campaign provided more specifics about the plan. First-time homebuyers would get a $5,000 credit on their state income taxes over two years. Only people who have lived in North Carolina for at least three years would qualify.
"The policy is designed to allow North Carolina residents to achieve the American Dream of home ownership while ensuring responsible fiscal management," a spokesman for Graham said in an email.
Housing experts say tax credits and down payment assistance programs can be helpful. But the amount of money offered determines how successful a program will be.
"I think the challenge in this current housing market is $5,000 is not much of anything at all for the reality of housing costs and interest rates at the moment," said Samuel Gunter, executive director of the North Carolina Housing Coalition.
Graham’s tax credit plan would require the legislature to pass a bill changing the tax code — something Folwell was quick to point out when asked about the proposal.
"I hope that Bill Graham has read the North Carolina constitution," he said. "That would clearly point out that he would not have the ability as the governor to do such a thing."
Folwell said a tax credit wouldn’t fully solve a housing affordability problem that’s closely tied to other economic challenges, like inflation and the cost of childcare.
"The best, simplest and most efficient way to solve several problems at one time is to increase the pre-tax credit that people can deduct out of their paychecks to pay for childcare," he said, adding that such a program would include "the responsibility to educate people, especially middle-, lower- and fixed-income individuals, about how this saves them money in the long run."
Folwell pointed out that the typical cost of childcare is much larger than the maximum amount you can have withheld from your paycheck before taxes. Graham is also floating other proposals for economic issues, suggesting that North Carolina cut taxes on groceries and overtime pay.
"We've already got a bill with (House Majority Leader) John Bell pending in the legislature to get rid of the tax on overtime pay," he said.
A spokesman for Robinson said Graham’s homebuyer tax credit plan "ignores basic economics of supply and demand."
"The failures of Bidenomics have made just about everything more expensive, including new homes and mortgages," Robinson spokesman Mike Lonergan said in an email. "And as North Carolina’s economy continues to grow, demand for housing outpaces available supply. If elected governor, Mark Robinson will continue to work hand-in-hand with Republican lawmakers to cut taxes and streamline regulations for families and businesses — especially in construction and housing — so our economy can continue to grow and thrive."
On the Democratic side of the governor’s race, Attorney General Josh Stein is also talking about affordable housing. A campaign spokeswoman highlighted his work as attorney general to crack down on businesses that prey on homeowners. Former Supreme Court Justice Mike Morgan's campaign did not respond to an inquiry from WUNC.
“From his first job out of law school with the Self Help Credit Union working to make affordable single-family home ownership a reality for working families to taking on predatory mortgage lenders as Attorney General, Josh has a record of addressing folks’ housing challenges," Stein spokeswoman Kate Frauenfelder said.
"As governor, he will work to expand the full range of housing options across the state, so that a home is a source of stability, not stress. That means using incentives from the North Carolina Housing Finance Agency to increase workforce homeownership, expanding the supply of affordable rental housing, and reducing homelessness.”
That’s an agency where Folwell has also been involved as state treasurer.
"In terms of my interest in this topic, there's never been a candidate for governor who has approved more billions of dollars for affordable housing and housing in general than I have as the state treasurer," he said.
The Housing Finance Agency helps finance housing construction projects using tax-exempt bonds and federal tax credit programs. It’s one of about six state government agencies involved with housing projects, and Gunter said that’s where a governor can make a difference.
"That vision, that leadership in that push on state agency staff to coordinate — really can only come from the governor's office," he said. "And so I think what it takes from a gubernatorial standpoint, is a vision and leadership to push our state agencies to maximize the resources as much as possible."
He said the coordination can be a more feasible path for the next governor than trying to get a reluctant General Assembly to pass legislation.
