North Carolina’s Surreal Housing Spring

With a divided and highly polarized state government, North Carolina hadn’t gotten much done on housing and land use policy in the past few years. That changed unexpectedly last fall, when S 382, a controversial bill that combined hurricane relief with measures to diminish the powers of the Democratic governor, passed with a little-noticed provision: a requirement that local governments obtain written consent from all affected property owners before passing any zoning change that would reduce allowed density or uses.

It’s too soon to say S 382’s downzoning ban is doomed, but it’s not looking good. A bipartisan group of legislators has signed on to cosponsor H 24 and its companion S 419, which would repeal the requirement entirely.

In a harder-to-interpret move, legislators also introduced a flurry of bills that would do the same thing but only applied to specific regions of the state. I am not an expert in North Carolina legislation, but this strikes me as unusual, especially when there seems to be broad support for repealing the requirement statewide. Adding to the mystery, H 24 appears to have been introduced prior to the introduction of many of these bills, and shares sponsors with some of them. My best guess is the region-specific bills are signals from legislators to local governments they represent. In the interest of giving the full picture, however, see the footnote for the list of those bills along with the areas where they would restore downzoning.*

North Carolina also has its own entry in the now-crowded field of state bills intended to restrict corporate owners from buying single-family homes: S 199/S 432/H 1010 would restrict any person or entity to owning a maximum of 100 single-family homes at a time.

But the news out of the Tar Heel State isn’t all bad for housing abundance advocates – far from it. North Carolina’s legislature is also considering a cornucopia of well-thought-out pro-housing bills this session, many with overlapping provisions, with bills coming from both sides of the aisle and in many cases with sponsors from both parties:

H 369, the Parking Lot Reform and Modernization Act, bans parking minimums and dimensional requirements for parking spaces.

H 626, the Housing Choice Act, offers municipalities a menu of pro-housing policies to enact in order to be given priority for a grant from the state’s wastewater and drinking water reserve.

H 627/S 495 legalizes a minimum of one ADU on any single-family residential lot, and preempts owner-occupancy restrictions, maximum ADU sizes below 800 square feet, parking minimums for ADUs, excessive permitting fees, and conditional zoning districts for ADUs.

H 876 allows local governments to engage third-party contractors to review permits, and allows developers to do so as well if local governments do not respond to their permit submission within 2 business days.

H 914 legalizes the construction of affordable housing (80% of units at 80% AMI) on land owned by religious or educational institutions (except on or near light industrial zones), with some context-aware preemption of local restrictions.

S 492 legalizes single-stair buildings up to 75 feet, given a sprinkler requirement among other fire safety stipulations.

S 497 requires localities to permit housing types up to sixplexes in all residential zones served by public water and sewer.

S 499 legalizes housing “to the same extent as allowed in areas and districts zoned for residential use” in all zones that permit office or retail use. This falls a bit short of embracing Here’s One Thing You Can Definitely Build Thought – the takeup on that for bills legalizing housing in commercial districts has not been as wide as for YIGBY bills, sadly.

S 587 provides protections for existing nonconformities, including extending vesting protections.

S 688 bans parking minimums, makes local governments liable for arbitrary zoning actions, bans length or width minimums for buildings, and requires cities of 150,000+ inhabitants to permit at least 5 units per acre in all residential zones and other cities to permit at least 4 units per acre.

S 736, the Foundation Act, permits one attached and one detached ADU in all zones which allow single-family homes, and developments of more than 20 units per acre within a half-mile of a transit stop; caps minimum lot sizes at one-quarter acre for all localities with a population of 10,000+, and caps density restrictions at 8 units per acre in residential zones in those localities, and requires a density bonus for affordable housing above that, as well as allocating funding to various housing construction and workforce development programs.

H 765, the Local Government Regulations Omnibus, combines similar (though not always identical) provisions to many of the other bills into one act. It would:

• abolish parking minimums and parking space design requirements; 
• cap density restrictions proportionally to county and city population (with the lowest allowed at 4 units per acre, in counties under 50,000 inhabitants and cities under 20,000 inhabitants) and require density caps to be in the form of density restrictions as such rather than minimum lot sizes; 
• legalize housing up to 60 feet in height in commercial and industrial areas in cities of 125,000+ inhabitants; 
• extend vesting of development rights from 2 to 5 years; 
• impose a 90-day shot clock on permitting processes; 
• require local governments to issue a fiscal impact statement when rezoning land; 
• require the signatures of 75% of affected homeowners to enact a historic preservation district; 
• tighten conflict-of-interest rules for local lawmakers; 
• impose a reasonableness nexus on impact fees; 
• require cities of 125,000+ inhabitants to permit all by-right uses administratively, and all local governments to approve platting and subdivision regulations administratively; 
• clarify the permitting authority for land that lies within multiple jurisdictions; 
• eliminate a process whereby otherwise prohibited zoning regulations could be enacted with the consent of all affected landowners; 
• ban minimum building lengths and widths; 
• prohibit setback and buffer yard requirements for developments of 15+ units per acre in cities of 125,000+ inhabitants; 
• require permitting of housing types up to quadplexes by right in cities of 125,000+ inhabitants;
• ban design restrictions and landscape buffer requirements in cities of 125,000+ inhabitants, except where required for flood safety;
• Set additional limits on conditional zoning agreements;
• Allow ADUs and tiny homes in cities of 125,000+ inhabitants;
• Prohibit local governments from requiring individual permits for each unit in a multifamily housing development;
• Extend liability for arbitrary and capricious government land use actions;
• Require local governments to respond promptly to clarify water and sewer availability for proposed developments, and not to deny permits on the grounds of holding the capacity for hypothetical future uses.

North Carolina last year also passed S 166, which curbed certain local requirements on permitting, especially for water and sewer service, and prohibited local fire code rules that are stricter than what the state requires.

The sheer number of bills at hand (let me know if I forgot any!), especially compared to previous years, constitute a unique and bizarre sudden eruption of housing legislation, the good and the discordant bursting forth like a springtime as rendered by Stravinsky. Ambitious bills with bipartisan sponsors in an infamously polarized state, alongside a similarly grand coalition (sponsored by some of the same legislators!) to repeal last year’s downzoning ban. It’s even possible that the push to restore downzoning ends up easing the path for some of the positive reforms.

However, if you squint, North Carolina’s spring of housing fits with a pattern I’m starting to see emerge in this year’s batch of state housing bills: legislators already predisposed towards ambition are getting more ambitious. There is real swing-for-the-fences legislation not only in North Carolina but in California, Texas, Montana, and Washington state; there are more proposals on the table in New York and Illinois than in years past; and in some less supply-constrained states, such as Oklahoma and Kentucky, lone legislators are introducing more bills than in the past. It’s too early to declare that the narrative of this year’s housing policy landscape, but in any event, if this year in North Carolina proves a historic one for housing legislation, it will be a case study worth examining.

* Bills to restore downzoning other than the primary such bill, along with the regions in which they apply:

• H 25: Stanly and Catawba Counties
• H 68: Granville and Vance Counties
• H 161: Randolph County
• H 170: Union County
• H 195: Chatham County
• H 204: Cabarrus County
• H 225: the towns of Wake Forest and Rolesville
• H 253: agricultural and floodplain land in Henderson County
• S 11/S 27: Bertie, Camden, Currituck, Dare, Gates, Hertford, Northampton, Pasquotank, Perquimans, and Tyrrell Counties
• S 65: Buncombe County
• S 136: Rutherford County
• S 137: Henderson County only for the purpose of farmland conservation
• S 138: Mecklenburg County
• S 165: Union and Iredell Counties
• S 185: Forsyth County
• S 212: Granville and Wake Counties