Local governments in North Carolina are seeking changes to property tax exemptions for certain nonprofit-led housing developments during the state’s legislative short session, citing concerns about reduced local revenue.
The policy framework at issue stems from a 2013 decision by the North Carolina Court of Appeals, which addressed how nonprofit-owned properties may qualify for property tax exemptions.
A Republican-led General Assembly committee studying property tax policy said closing what is known as the “Blue Ridge” affordable housing loophole could increase local revenue,” reported The News & Observer.
The committee’s findings, which draw on analysis from the legislature’s Fiscal Research Division, indicate that localities lose about $60 million annually in property tax revenue tied to exemptions for charitable nonprofit low- and moderate-income housing. The report also said “local governments have been losing out on millions in tax revenue because of the loophole.”
The proposal under consideration would keep tax exemptions for developments with government support while limiting eligibility for certain joint ventures and reducing the tax deferral period for future affordable housing sites, the newspaper reported.
A 2025 impact report from Opportunity South Carolina said that nonprofit-partnered developments have preserved more than 20,000 affordable housing units and directed more than $2.5 million toward long-term affordability initiatives across multiple partnerships.
The report also states that such arrangements can expand housing supply without requiring the same level of direct public funding as fully government-financed developments.
The legislative discussion is ongoing, with lawmakers weighing proposals that could modify how property tax exemptions apply to nonprofit-partnered housing developments.
