NORTH CAROLINA — A group of lawmakers is pushing a bill to enact changes to local development regulations, including allowing developers to sue local officials under certain circumstances for land-use decisions and creating new minimum density requirements for by-right development.
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Rep. Jeff Zenger (R-Forsyth), Rep. Mark Brody (R-Union), Rep. Carla Cunningham (D-Mecklenburg), and Rep. Matthew Winslow (R-Franklin) introduced House Bill 765 last week.
The 22-page legislation — titled “Local Gov. Development Regulations Omnibus” — includes broad-ranging changes to North Carolina’s zoning and land-use laws. It would create minimum density requirements based on population size, restrict local governments’ ability to negotiate conditions in zoning decisions, mandate zoning and site plan decisions within 90 days of application, and limit municipalities’ authority to enact parking, street design, setback, and other standards.
“The bill, if it becomes law, would provide a sweeping overhaul diminishing local control over land use and impose significant burdens on local government,” New Hanover County intergovernmental affairs manager Tim Buckland and other local officials wrote in a legislative analysis.
In a recent legislative report, the North Carolina League of Municipalities argued the bill “represents a radical approach” removing residents and local officials’ ability to pursue unique community visions, attract economic development and maintain quality of life.
The league noted a provision exposing locally elected officials to personal legal liability during regular land-use planning decisions. H.B. 765 gives property owners, rezoning applicants, and contracted buyers the right to pursue civil litigation against any member of a local decision-making board under certain circumstances, including for considering evidence or material gained outside of an evidentiary hearing when making a quasi-judicial decision.
Developers could sue local officials for rejecting their applications in a capricious, arbitrary, malicious or unlawful manner. H.B. 765 also expands eligibility for civil action against local governments for local land development regulations or decisions if deemed an abuse of discretion or made in excess of statutory authority.
The League also criticized a provision barring board members from voting if they have a fixed opinion prior to land use hearings.
“[H.B. 765] would set a very dangerous precedent and potentially inhibit elected local officials from being able to fairly represent their constituents,” New Hanover County Commissioner Rob Zapple said. “The difficult work of sorting out how, what, and where residents and businesses can safely build their lives is hard enough without the threat of lawsuits and punitive damages from lawyers, lobbyists and lawmakers in Raleigh.”
Zapple argued the bill would create a “chilling effect” on zoning decisions that factor in safety issues in coastal areas subject to hurricanes, rising oceans and increased flooding.
H.B. 765 enacts new minimum density requirements for residential zoning based on population size. In counties with a population between 50,000 and 274,999 — such as New Hanover County, which has a population of 238,852 — five units per acre would be developable by right. The full parcel acreage would be included in density calculations without reductions for non-developable areas.
Kayne Darrell, founder of the Save Sledge Forest community activist group, similarly raised the importance of considering community-wide flood and safety impacts in development decisions.
“H.B. 765 is a direct assault on local democracy and the ability of residents to protect their quality of life,” she said. “It would severely undermine our efforts to preserve the unique character and environmental integrity of areas such as Sledge Forest, prioritizing unregulated development over responsible planning.”
Alternatively, groups including the NC Home Builders Association, the NC Realtors Association, and progressive nonprofit Carolina Forward, expressed support for H.B. 765.
“We introduced House Bill 765,” NC Home Builders Association legislative director Steve Webb said in a Monday video. “These are the most sweeping land-use changes that this state has seen in some time. The hope is with the changes in this legislation, we can deliver more houses to a market where it is desperately needed.”
Advocates argue the bill would increase the availability of affordable housing throughout North Carolina. For instance, Carolina Forward argued the bill would promote needed medium-density housing and accessory dwelling units; the bill would require cities to allow one ADU for every single family dwelling greater than 600 feet.
The bill would require the General Assembly’s fiscal research division to prepare an analysis of any new bill or resolution’s impact on the cost of constructing, purchasing, owning, or selling a single-family residence. Buckland raised concerns the fiscal impact analysis requirement would apply to local government ordinances and allow municipalities to be sued if they do not complete a fiscal note.
“For years, local governments have publicly emphasized the importance of increasing the availability of affordable housing to ensure that those who serve the community — teachers, police officers, firefighters, and others — can also afford to live in the communities they support,” Webb told Port City Daily. “However, in practice, many of these same local governments have enacted policies that directly undermine that goal.”
The NCHBA legislative director contended H.B. 765 would increase housing supply by preventing local governments from imposing costly architectural and design standards, as well as density and open space requirements, during the rezoning negotiation process.
“There is nothing truly ‘voluntary’ about the conditional rezoning process,” Webb said. “In these proceedings, local governments wield unilateral authority to approve or deny a development proposal. The property owner is left with little recourse and must either consent to the government’s demands or risk complete denial. These demands are often excessive, unrelated to the legitimate impacts of the project, and often include aesthetic conditions or other conditions that are otherwise prohibited by law.”
PCD asked Webb if the NC Home Builders Association helped craft or write the legislation; the lobby group was heavily involved in writing several building code reform bills in recent years. He said the group was invited to provide input on housing affordability issues early in the legislative process, helped identify specific barriers to housing production, and provided technical recommendations.
Webb noted the NCHBA did not specifically request H.B. 765’s provision expanding civil liability for local officials, but believes it raises important accountability questions.
Leland council member Bill McHugh told Port City Daily he views H.B. 765 as part of a broader pattern. He and other city officials have raised concerns in recent months about Leland’s ability to implement a revised flood ordinance after several bills last year imposed limitations on local government authority.
“This bill is another attempt by some members of the General Assembly and the lobbyists at the NC Home Builders Association to further restrict the rights of municipalities to self-govern and protect their citizens from the worst effects of rapid and unchecked growth,” McHugh said. “It contains provisions that target local elected officials in a manner that could have a chilling effect on their ability to serve their communities.”
The NC Home Builders Association has donated significant sums to H.B .765’s primary sponsors, including:
- Brody — $31,900
- Winslow — $12,150
- Zenger — $12,000
- Cunningham — $9,400
The NC Realtors Association has similarly contributed to campaigns H.B. 765 primary sponsors:
- Cunningham — $20,500
- Zenger — $19,000
- Brody — $14,000
- Winslow — $13,000
“NC Realtors believes this bill sends a strong signal that North Carolina is serious about making housing more attainable for all,” an NC Realtors spokesperson told PCD. “By reducing unnecessary hurdles at the local level, we’re allowing for more housing options at all price points and building stronger communities. We commend the bill sponsors for their commitment to much-needed reform and look forward to continued efforts to ensure North Carolinians have access to a place to call home.”
[Update: This article was updated to include statements from the NC Realtors Association and New Hanover County.]
Tips or comments? Email journalist Peter Castagno at peter@localdailymedia.com.
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