A bipartisan bill in North Carolina is aimed at closing a loophole in affordable housing property tax breaks, which cities like Raleigh say is costing millions and contributing to budget shortfalls. The bill, named House Bill 1042, aims to address the "Blue Ridge loophole" which allows developers to avoid property taxes by partnering with an affordable housing nonprofit. Currently, developers can qualify for full property tax exemptions even if the nonprofit owns only a small portion of the project. The legislation would change this by tightening the rules around who qualifies and creating a structure to scale tax exemptions based on how much affordable housing is included in a project. It also adopts the federal definition of affordable housing, which means housing costs no more than 30% of a household's income.