RALEIGH — If early feedback is any indication of broader interest, North Carolina homeowners will want to take note of proposed legislation that was filed on March 25, 2021, as House Bill 401 and Senate Bill 349, according to local officials.
In their introductory language, HB 401 and SB 349 advertise that the legislation’s primary goal is to provide affordable housing options in all residential zones in North Carolina. The proposed legislation achieves this by mandating that every local government in North Carolina must allow all “middle housing” types in areas zoned for residential use, including those residential zoning areas currently defined as for single-family homes.
Middle housing types are defined as duplexes, triplexes, quadplexes and townhouses in the proposed legislation.
There are other proposed changes to the General Statutes governing development of real estate in North Carolina that are included in HB 401 and SB349, and the legalese is difficult to wade through, but the consequences and implications of allowing all types of middle housing in all zones defined as residential has raised concerns.
“Especially in a tight real estate market with low inventory and home prices and rental rates rising, the idea of promoting the concept of affordable housing is laudable. I’m just not sure this is the right way to go about it,” said Blowing Rock commissioner Albert Yount, questioning the proposed legislation’s dilution of local control.
“I don’t think one size fits all,” said Yount. “It is not for me to say that this is good or not good for other municipalities, especially larger cities like Charlotte or Raleigh, but to impose this sort of thing on Blowing Rock and similar small towns threatens the way we have lived and done business for decades. Most notably, I think it threatens property values, which may very well result in reduced property tax revenue to the town. If that happens, then the only fiscally responsible thing for a governing body to do if we are to keep the same level of services is to increase property tax rates. I don’t know anyone with whom that would sit well.”
As an example, Yount offered a hypothetical scenario. Based on his interpretation of what HB 401 and SB 349 propose, he explained that if the town were to find another way of supplying water to the residents and businesses currently served so that the water storage tank in the middle of Green Hill Circle was no longer needed, then the town could conceivably sell that property to a developer. Once the storage tank was removed and the land remediated, under the proposed legislation the developer would be allowed to build middle housing units — duplexes, triplexes, quadplexes or townhouses — on that repurposed property. Currently zoned R-15, multi-family housing units are not permitted now, only single-family homes.
“Increasing the density in the middle of the neighborhood changes the character of the neighborhood, and probably not in a good way,” Yount said. “Traffic, congestion, and noise are all likely to increase with greater density. In the end, those changing conditions might adversely affect the surrounding property values, even if they do have million-dollar views. Maybe they actually decline or maybe they just don’t appreciate in value at the same rate as comparable properties without the middle housing.”
Is affordable housing the real goal?
Subsection 42A-3 of this Chapter offers hints at what might be behind the proposed legislation. Paragraph (a) says, “The provisions of this Chapter shall apply to any person, partnership, corporation, limited liability company, association, or other business entity who acts as a landlord or real estate broker engaged in the rental or management of residential property for vacation rental as defined in this Chapter. Paragraph (b) stipulates to what the Chapter provisions do not apply, and that is just about everything except vacation rentals.
“You have to wonder if this legislation is not being pushed by vacation rental agencies such as Airbnb and VRBO, as well as building associations,” Yount said. “It is not clear as to whether the application and exemptions language refers only to the second proposed change about accessory housing units, or also to the middle housing provisions near the top of the proposed statute, but that language suggests this is more about vacation rentals than about creating affordable housing opportunities.”
Tim Gupton, president of the Blowing Rock Civic Association, expressed concerns about the potential impact of this legislation, if passed, on single-family home neighborhoods.
“We have classic, even iconic neighborhoods all across North Carolina with wonderful, single-family home characteristics,” said Gupton. “We made a choice to live in a quiet, low-density Blowing Rock neighborhood when we chose Mayview. Whether in Charlotte’s Myers Park, or Raleigh’s Six Forks, people make those choices to live in low density, single-family neighborhoods in which to raise their children or retire in relative solitude. So many of those neighborhoods in North Carolina are not subject to homeowners associations and they are not in historic districts, so could be adversely impacted by this legislation. In Blowing Rock, we have some iconic single-family neighborhoods. It is not just Mayview, but Laurel Park, Green Hill Circle, Hillwinds, Morningside Drive, Mockingbird Lane, Heather Ridge, and Sunset Drive, east of Valley Boulevard, to name a few. With this legislation, every single one of those neighborhoods are vulnerable.”
Current Blowing Rock resident and former planning director for Cleveland County, Bill McCarter agrees.
“When I first heard about this legislation, my immediate thought was of the many old single-family neighborhoods throughout the state that were developed well before the creation of homeowners and property owners associations,” said McCarter. “This legislation appears to leave them vulnerable to undesirable change.”
Gupton emphasized that Blowing Rock is not unique in having classic single-family neighborhoods in which people choose to live and are willing to pay for that kind of investment.
“From that perspective alone, this legislation doesn’t make any sense and is offensive to taxpayers who invest in residential living for specific reasons, like safety, quiet, and relative solitude,” said Gupton. “I get it that developers are in business to make money and the economics of being able to subdivide what are now single-family lots might drive them to convert properties to middle housing developments if they could, but people don’t invest in property ownership just to make money when it comes to the homes they choose to live in.
‘This legislation would change the character of many neighborhoods and make them less than desirable,” said Gupton. “Analytically, increasing density in a neighborhood puts additional stresses on town infrastructure, like water and sewer. It also puts stresses on other town services, like law enforcement and fire protection. But emotionally, when you make a choice to live in a quiet, single-family neighborhood, that’s how you want to keep it. Why would I want a triplex or quadplex next door when I chose to live in a quiet neighborhood of single-family homes? That’s insane.”
“This legislation has the potential to undermine the uniquely American concept of home ownership and single-family neighborhoods,” said Gupton. “From my personal perspective and from the Blowing Rock Civic Association’s perspective, it is why we buy here, in single-family neighborhoods. I think this legislation undermines the real estate market in Blowing Rock.”
Yount also pointed out that the proposed revisions to this Chapter of the General Statutes result in contradictory provisions.
“On the one hand, the proposed legislation says that local governments have to allow middle housing units in all residential zones,” Yount said. “But you read further down and in Section 2.2, under ‘Grant of Power,’ and the language remains that a local government may adopt zoning regulations and may regulate such things as building height, open spaces, size of structures and density.
“So, what is this legislation really achieving,” said Yount. “If a local government allows a quadplex because it is mandated by this proposed legislation, but if that local government can then impose a density limitation, for example, of one housing unit per acre because it has that power, that means the quadplex has to sit on no less than four acres!”
Yount completed his thoughts by suggesting that this kind of legislation hints at the worst kind of state control over local and individual interests.
“In my opinion, somebody has not thought through the unintended consequences of this legislation. People have managed to live here in Blowing Rock since 1889 without this legislation. I suggest we can make it at least a few more years without it now. Upwardly mobile people work for years to be able to afford living in a nice home in a quiet neighborhood. This legislation attacks my individual right to choose the type of neighborhood where I want to live.”
The sponsors of HB 401 are Rep. William Richardson (Democrat, Cumberland County) of Fayetteville, Rep. Destin Hall (Republican, Caldwell County) of Lenoir; Rep. Timothy Moffitt (Republican, Henderson County) of Hendersonville; Rep. Mark Brody (Republican, Anson and Union counties) of Monroe; Rep. Jake Johnson (Republican, Henderson, Polk, and Transylvania counties); and Rep. Michael Wray (Democrat, Halifax, Northampton counties) of Gaston.
According to the North Carolina General Assembly website, Richardson is identified as an attorney and business owner, Hall as an attorney, Moffitt as a management consultant, Brody as a contractor. Johnson as in real estate, and Wray as a small business owner.
The sponsors of SB 349 are Sen. Milton “Toby” Fitch, Jr. (Democrat, representing Edgecombe, Halifax and Wilson counties), Sen. Chuck Edwards (Republican, representing Buncombe, Henderson, and Transylvania counties), Sen. Paul Newton (Republican, representing Cabarrus and Union counties), and Sen. Valerie Foushee (Democrat, representing Chatham and Orange counties).
EDITOR’S NOTE: We are currently waiting to hear back from one or more of the bill sponsors for their comments and perspectives.