Fair & Affordable Housing Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 404

Short Title: Fair & Affordable Housing Act. (Public)
Sponsors: Representatives Lopez, G. Brown, Ager, and Buansi (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Rules, Calendar, and Operations of the House
March 17, 2025
*H404-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO DIRECT THE LEGISLATIVE RESEARC H COMMISSION TO STUD Y 2
AFFORDABLE HOUSING IN THE STATE, TO MAKE HOUSING DISCRIMINATION 3
ON THE BASIS OF "SOU RCE OF INCOME" A VIO LATION OF THE STATE FAIR 4
HOUSING ACT, TO EXPA ND WORKFORCE HOUSING BY PROVIDING CURRENT 5
AND ONGOING FUNDING FOR THE HOUSING TRUS T FUND, TO PROHIBIT 6
CREDIT REPORTING AGENCIES FROM REPORTING LAWSUITS FOR EJECTMENT 7
THAT DO NOT RESULT I N A JUDGMENT FOR THE LANDLORD, AND TO 8
ESTABLISH THE OPTIONAL CREDIT REPORTING FOR TENANTS OF SUBSIDIZED 9
HOUSING PROGRAM. 10
The General Assembly of North Carolina enacts: 11
SECTION 1.(a) The Legislative Research Commission (LRC) shall study the 12
availability of affordable housing in this State. 13
As part of its study, the LRC shall do all of the following: 14
(1) Examine the current availability of affordable housing in metropolitan and 15
rural areas of the State. 16
(2) Assess the availability of publicly owned land that could be developed into 17
affordable residential housing. 18
(3) Identify existing federa l, State, and local subsidies, grants, and other 19
incentives and programs available to increase the availability of affordable 20
housing, the extent to which the subsidies, grants, and other incentives and 21
programs are utilized, and the successfulness of thei r usage in increasing the 22
availability of affordable housing. 23
(4) Examine the challenges facing those in need of affordable housing, including 24
financial, social, and logistical challenges. 25
(5) Assess the ability of local governments to leverage existing la ws and 26
resources, including partnering with nonprofit and for -profit entities, to 27
increase the availability of affordable housing. 28
(6) Examine the best practices of other states in increasing the availability of 29
affordable housing. 30
(7) Examine any unique c hallenges faced by local governments across the State 31
resulting from differences in economic prosperity and considering the 32
differences between the metropolitan and rural areas of the State. 33
(8) Evaluate the potential benefits, cost-savings, and improved affordability from 34
utilizing energy efficiency standards in housing. 35
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(9) Assess the feasibility and cost -savings from partnerships between public 1
utilities, private businesses, and local governments in replacing aging housing 2
in existing programs with newer modular and mobile home units. 3
(10) Examine any costs that may be associated with government rules, regulations, 4
and ordinances. 5
(11) Any other matters the LRC deems relevant to its efforts. 6
SECTION 1.(b) The LRC shall report its findings, together with any proposed 7
legislation, to the 2026 Regular Session of the 2025 General Assembly upon its convening. 8
SECTION 2. Chapter 41A of the General Statutes reads as rewritten: 9
"Chapter 41A. 10
"State Fair Housing Act. 11
"§ 41A-1. Title. 12
This Chapter shall be known and may be cited as the State Fair Housing Act. 13
… 14
"§ 41A-3. Definitions. 15
For the purposes of this Chapter, the following definitions apply: 16
… 17
(9) "Source of income " means any lawful source of money paid directly, 18
indirectly, or on behalf of a renter or buyer of real property, including the 19
following: 20
a. Income derived from any lawful profession or occupation. 21
b. Income or rental payments derived from a grant, loan pr ogram, the 22
State or federal government or any local governmental unit, including 23
the HOPE program or a Section 8 voucher, or financial assistance from 24
a private source , including a nonprofit or other nongovernmental 25
entity. 26
"§ 41A-4. Unlawful discriminatory housing practices. 27
(a) It is an unlawful discriminatory housing practice for any person in a real estate 28
transaction, because of race, color, religion, sex, national origin, handicapping condition, source 29
of income, or familial status to: 30
… 31
(b1) It is an unlawful discriminatory housing practice for any person or other entity whose 32
business includes engaging in residential real estate related transactions to discriminate against 33
any person in making available such a transaction, or in the term s and conditions of such a 34
transaction, because of race, color, religion, sex, national origin, handicapping condition, source 35
of income, or familial status. As used in this subsection, "residential real estate related 36
transaction" means: 37
… 38
(c) It is an unlawful discriminatory housing practice for a person to induce or attempt to 39
induce another to enter into a real estate transaction from which such person may profit: 40
(1) By representing that a change has occurred, or may or will occur in the 41
composition of the residents of the block, neighborhood, or area in which the 42
real property is located with respect to race, color, religion, sex, national 43
origin, handicapping condition, source of income, or familial status of the 44
owners or occupants; 45
… 46
(d) It is an unlawful discriminatory housing practice to deny any person who is otherwise 47
qualified by State law access to or membership or participation in any real estate brokers' 48
organization, multiple listing service, or other service, organization, or facility relat ing to the 49
business of engaging in real estate transactions, or to discriminate in the terms or conditions of 50
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House Bill 404-First Edition Page 3
such access, membership, or participation because of race, color, religion, sex, national origin, 1
handicapping condition, source of income, or familial status. 2
… 3
(g) It is an unlawful discriminatory housing practice to discriminate in land-use decisions 4
or in the permitting of development based on race, color, religion, sex, national origin, 5
handicapping condition, source of income, familial status, or, except as otherwise provided by 6
law, the fact that a development or proposed development contains affordable housing units for 7
families or individuals with incomes below eighty percent (80%) of area median income. It is 8
not a violation of this Chapter if land-use decisions or permitting of development is based on 9
considerations of limiting high concentrations of affordable housing. 10
"§ 41A-5. Proof of violation. 11
(a) It is a violation of this Chapter if: 12
(1) A person by his act or failure to act intends to discriminate against a person. 13
A person intends to discriminate if, in committing an unlawful discriminatory 14
housing practice described in G.S. 41A-4 he was motivated in full, or in any 15
part at all, by race, color, religion, sex, national origin, handi capping 16
condition, source of income, or familial status. An intent to discriminate may 17
be established by direct or circumstantial evidence. 18
(2) A person's act or failure to act has the effect, regardless of intent, of 19
discriminating, as set forth in G.S. 41A-4, against a person of a particular race, 20
color, religion, sex, national origin, handicapping condition, source of income, 21
or familial status. However, it is not a violation of this Chapter if a person 22
whose action or inaction has an unintended discriminatory effect, proves that 23
his action or inaction was motivated and justified by business necessity. 24
… 25
"§ 41A-6. Exemptions. 26
(a) The provisions of G.S. 41A-4, except for subdivision (a)(6), do not apply to the 27
following: 28
… 29
(3) Religious institutions or or ganizations or charitable or educational 30
organizations operated, supervised, or controlled by religious institutions or 31
organizations which give preference to members of the same religion in a real 32
estate transaction, as long as membership in such religion is not restricted by 33
race, color, sex, national origin, handicapping condition, source of income, or 34
familial status; 35
…." 36
SECTION 3. There is appropriated from the General Fund to the North Carolina 37
Housing Trust Fund, established under G.S. 122E-3, the sum of forty -five million dollars 38
($45,000,000) in nonrecurring funds for the 2025-2026 fiscal year to be used in accordance with 39
the purposes provided in Chapter 122E of the General Statutes. 40
SECTION 4. G.S. 161-11.5 reads as rewritten: 41
"§ 161-11.5. Fees to be remitted to State Treasurer. 42
Six dollars and twenty cents ($6.20) of each fee collected by the register of deeds under 43
G.S. 161-10(a)(1) and (a)(1a) shall be remitted by the register of deeds to the county finance 44
officer, who shall remit the funds to the State Treasurer on a monthly basis to be credited as 45
follows: 46
(1) Fifty-five percent (55%) to the Floodplain Mapping Fund established under 47
G.S. 143-215.56A. 48
(2) Twenty Eighteen and one-half percent (20%) (18.5%) to the General Fund as 49
nontax revenue. 50
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(3) Twenty-five percent (25%) to the Department of Natural and Cultural 1
Resources to be used as provided in G.S. 121-5(e). 2
(4) One and one-half percent (1.5%) to the North Carolina Housing Trust Fund, 3
established under G.S. 122E-3." 4
SECTION 5. G.S. 105-228.30 reads as rewritten: 5
"§ 105-228.30. Imposition of excise tax; distribution of proceeds. 6
(a) An excise tax is levied on each instrument by which any interest in real property is 7
conveyed to another person. The tax rate is one dollar ($1.00 ) on each five hundred dollars 8
($500.00) or fractional part thereof of the consideration or value of the interest conveyed. The 9
transferor must pay the tax to the register of deeds of the county in which the real estate is located 10
before recording the instrument of conveyance. If the instrument transfers a parcel of real estate 11
lying in two or more counties, however, the tax must be paid to the register of deeds of the county 12
in which the greater part of the real estate with respect to value lies. 13
The excise tax on instruments imposed by this Article applies to timber deeds and contracts 14
for the sale of standing timber to the same extent as if these deeds and contracts conveyed an 15
interest in real property. 16
(b) The register of deeds of each county must remit the proceeds of the tax levied by this 17
section to the county finance officer. The finance officer of each county must credit one -half of 18
the proceeds to the county's general fund and remit the remaining one -half of the proceeds, less 19
taxes refunded and th e county's allowance for administrative expenses, to the Department of 20
Revenue on a monthly basis. A county may retain two percent (2%) of the amount of tax proceeds 21
allocated for remittance to the Department of Revenue as compensation for the county's cos t in 22
collecting and remitting the State's share of the tax. The Department of Revenue shall credit an 23
amount equal to thirty-three percent (33%) of the funds remitted to the Department of Revenue 24
under this subsection to the North Carolina Housing Trust Fund, established under G.S. 122E-3, 25
and shall credit the remaining funds to the General Fund." 26
SECTION 6. Chapter 75 of the General Statutes is amended by adding a new Article 27
to read: 28
"Article 2B. 29
"Fair Use of Credit Reports. 30
"§ 75-70.1. Definitions. 31
The following definitions apply in this Article: 32
(1) Consumer. – An individual. 33
(2) Credit report. – Any written, oral, or other communication of any information 34
by a credit reporting agency bearing on a consumer's creditworthiness, credit 35
standing, credit capacity, character, general reputation , personal 36
characteristics, or mode of living which is used or expected to be used or 37
collected in whole or in part for the purpose of serving as a factor in 38
establishing the consumer's eligibility for any of the following: 39
a. Employment. 40
b. Housing, including applications for lease or mortgage. 41
c. Credit to be used primarily for per sonal, family, or household 42
purposes. 43
d. Any other purpose authorized under 15 U.S.C. § 168(b). 44
(3) Credit reporting agency. – Any person who, for monetary fees, dues, or on a 45
cooperative nonprofit basis, regularly engages in whole or in part in the 46
practice of assembling or evaluating consumer credit information or other 47
information on consumers for the purpose of furnishing consumer repo rts to 48
third parties. 49
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(4) Person. – Any individual, partnership, corporation, trust, estate, cooperative, 1
association, government or governmental subdivision or agency, or other 2
entity. 3
"§ 75-70.2. Prohibited information. 4
Credit reporting agen cies are prohibited from collecting, storing, reporting , or using to 5
determine a composite-type score information regarding any lawsuit filed against the consumer 6
for ejectment or summary ejectment of the consumer by the consumer's landlord, unless there 7
has been a judgment entered in favor of the landlord." 8
SECTION 7.(a) Chapter 157 of the General Statutes is amended by adding a new 9
Article to read: 10
"Article 6. 11
"Optional Credit Reporting for Tenants of Subsidized Housing Program. 12
"§ 157-71. Definitions. 13
The following definitions apply in this Article: 14
(1) Credit reporting agency. – As defined in G.S. 75-70.1(3). 15
(2) Housing authority. – As defined in G.S. 157-3(1). 16
(3) Housing project. – As defined in G.S. 157-3(12). 17
(4) Landlord. – As defined in G.S. 42-59(7). 18
(5) Participating landlord. – A landlord who decides to participate in the Optional 19
Credit Rep orting Program for Tenants of Subsidized Housing created by 20
G.S. 157-72. Any housing authority engaged in the practice of directly leasing 21
residential accommodations to tenants shall automatically be considered a 22
participating landlord for the purposes of this Article. 23
(6) Persons of low income. – As defined in G.S. 157-3(15a). 24
(7) Persons of moderate income. – As defined in G.S. 157-3(15b). 25
(8) Rent payment information. – Information concerning a tenant 's timely 26
payment of rent, untimely paymen t of rent, or nonpayment of rent. "Rent 27
payment information " does not include information concerning a tenant's 28
payment or nonpayment of any fees other than rent. 29
(9) Residential accommodations. – Real property used for residential purposes by 30
an individual or family. 31
(10) Subsidized housing. – Residential accommodations that receive financial 32
assistance from federal, state, or local government programs aimed at 33
reducing housing costs for persons of low income and persons of moderate 34
income. This assistance may include direct subsidies, tax credits, grants, or 35
other financial mechanisms designed to make housing more affordable. 36
(11) Tenant. – As defined in G.S. 42-59(10). 37
"§ 157 -72. Establishment of the Optional Credit Reporting for Tenants of Subsidized 38
Housing Program. 39
(a) Any participating landlord of subsidized housing shall offer the tenant or tenants 40
obligated on the lease of each residence the option of having the tenant 's rent payment 41
information reported to at least one credit reporting agency. A tenant's election to have his or her 42
rent payment information reported under this section shall be in writing, as described in 43
subsection (c) of this section. 44
(b) For leases entered into on or after October 1, 2025, the offer to report rent payment 45
information shall be made at the time of the lease agreement and at least once annually thereafter. 46
(c) The offer to report rent payment information shall include a written election of rent 47
reporting that contains at least all of the following: 48
(1) A statement that reporting the tenant's rent payment information is optional. 49
(2) Identification of each credit reporting agency to which rental payment 50
information will be reported. 51
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(3) A statement that all of the tenant's rental payments will be reported, regardless 1
of whether the payments are timely, late, or missed. 2
(4) The amount of any fee charged pursuant to subsection (f) of this section. 3
(5) Instructions on how to submit the written election of rent reporting to the 4
landlord by mail. 5
(6) A statement that the tenant may opt into rent reporting at any time following 6
the initial offer by the participating landlord. 7
(7) A statement that the tenant may elect to stop rent reporting at any time, but 8
that they will not be able to resume rent reporting for at least six months after 9
their election to opt out. 10
(8) Instructions on how to opt out of reporting rental payment information. 11
(9) A signature block that the tenant shall date and sign in order to accept the offer 12
of rent reporting. 13
(d) When the offer of rent reporting is made, the participating landlord shall provide the 14
tenant with a self -addressed, stamped envelope to return the written election of rent reporting. 15
The participating landlord may also accept the written election of rent reporting from the tenant 16
in person. 17
(e) The written election to begin rent reporting shal l not be accepted from the tenant at 18
the time of the offer. A tenant may submit their completed written election of rent reporting at 19
any time after they receive the offer of rent reporting from the participating landlord. A tenant 20
may request and shall obtain additional copies of the written election of rent reporting form from 21
the participating landlord at any time. 22
(f) If a tenant elects to have that tenant 's rental payments reported to a credit reporting 23
agency under subsection (a) of this section, the participating landlord may require that tenant to 24
pay a fee not to exceed the lesser of the actual cost to the landlord to provide the service or ten 25
dollars ($10.00) per mon th. The payment or nonpayment of this fee by the tenant shall not be 26
reported to a credit reporting agency. 27
(g) If a tenant fails to pay any fee required by the participating landlord pursuant to 28
subsection (f) of this section, all of the following shall apply: 29
(1) The failure to pay the fee shall not be cause for termination of the tenancy. 30
(2) The landlord shall not deduct the unpaid fee from the tenant's security deposit. 31
(3) If the fee remains unpaid for 30 days or more, the landlord may stop reporting 32
the tenant 's rental payments and the tenant shall be unable to elect rent 33
reporting again for a period of six months from the date on which the fee first 34
became due. 35
(h) A tenant who elects to have rent payment information reported as described in 36
subsection (a) of this section may subsequently file a written request with their landlord to stop 37
that reporting with which the participating landlord shall comply. A tenant who elects to stop 38
reporting rent payment information shall not be allowed to elect rent reporting again for a period 39
of at least six months from the date of the tenant's written request to stop reporting. 40
(i) A tenant who elects to have rent reported does not forfeit any rights under G.S. 42-42. 41
Nothing in this section shall be construed to relieve a landlord of his or her obligation to provide 42
fit premises as required by G.S. 42-42." 43
SECTION 7.(b) There is appropriated from the General Fund to the North Carolina 44
Housing Finance Agency the sum of one million dollars ($1,000,000) in nonrecurring fund s for 45
the 2025 -2026 fiscal year to be used to provide grants to private landlords who decide to 46
participate in the Optional Credit Reporting for Tenants of Subsidized Housing Program created 47
by G.S. 157-72 as enacted by this act. The Housing Finance Agency may use an amount not 48
exceeding ten percent (10%) of the funds appropriated in this section for administrative costs. 49
The grants funded by this section shall be awarded on the express condition that the funds be 50
used by the receiving landlord to make improvements to the subsidized housing provided by the 51
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landlord. The Housing Finance Agency shall develop criteria and an application process for the 1
grants funded by this section. The grants funded by this section shall be awarded to eligible 2
applicants after October 1, 2026. The amount of each grant funded by this section shall be 3
determined by dividing the amount appropriated for the grants in this section, minus the funds 4
used by the Housing Finance Agency for administrative costs, divided by the number of eligible 5
applicants as determined by the Housing Finance Agency on October 1, 2026. Under no 6
circumstances shall a grant funded by this section be awarded to a housing authority as defined 7
in G.S. 157-3. 8
SECTION 8. Section 2 of this act becomes effective October 1, 2025. Sections 3, 4, 9
and 5 of this act become effective July 1, 2025. Section 6 of this act becomes effective October 10
1, 2025, and applies to credit information collected or reports disbursed on or after that date. 11
Section 7 of this act becomes effective October 1, 2025, and applies to leases entered into on or 12
after that date. The remainder of this act is effective when it becomes law. 13