In effort to boost housing supply, lawmakers propose loosening rules for builders

State lawmakers advanced three bills Thursday aimed at speeding up construction of homes, apartments and commercial developments across the state — an attempt to address a housing shortage that is driving up the cost of living.

The housing issue is shaping up to become a theme of this year’s legislative session. Lawmakers seem to mostly agree something needs to be done, even if they disagree on some details.

“We know we’ve got a problem,” said Rep. Cynthia Ball, a Raleigh Democrat. “Anybody who lives in North Carolina knows you’ve got a problem with this kind of thing.”

All three of the bills deal with different ways to address the same basic issue: Delays in getting permits from local governments. They focus on issues like untangling zoning rules and speeding up inspections, in part by loosening the rules.

Some lawmakers on both sides of the aisle at Thursday’s committee were skeptical of whether the proposals would give away too much to developers at the expense of city and county officials who have an interest in regulating development in their communities. Ball raised some of those concerns, as did other Democratic and Republican representatives.

In the end all the bills passed with bipartisan support. They received a mixed reaction from the groups that represent city and county government officials, which support some but not all of the changes.

And Thursday’s bills aren’t the extent of it: Another key bill to watch on the housing front will be SB 317, sponsored by Senate Republican Majority Leader Paul Newton as well as a host of top Democrats. It would let home builders ignore some local regulations — like tree buffers and open space requirements — if they agreed to sell at least 20% of the homes in new subdivisions at more affordable, below-market rates.

A main goal, Newton recently wrote on Twitter, is to help teachers, cops, nurses, firefighters and others in similar jobs be able to afford to live in the cities where they work. He said it’s a win for developers and a win for the middle class, and also shouldn’t run the risk of opposition from existing homeowners who might fear the deregulated neighborhoods harming the property value of existing, carefully zoned subdivisions.

“Due to the 10 acre minimum requirement, this bill will pose no threat to established neighborhoods,” he wrote. “These developments will mostly be built far outside [the] city center.”

That bill has yet to get a committee hearing. The three bills that moved forward Thursday are less sweeping in their potential to override local government authority.

Make government work faster

While the focus of the three bills Thursday was on speeding up home construction, one lawmaker said it applies to just about anything a permit is required for.

“Recently, we applied for a sign permit in the City of Raleigh for a small bike shop,” said Rep. Kevin Crutchfield, a Republican from Concord who works in the sign industry. “It took them eight weeks to process the permit. Eight weeks. Concord, they’ll do it in two days. It’s just not even reasonable.”

Republican Rep. Jeff Zenger, a developer from Forsyth County, is one of several sponsors behind the bills.

He said many cities and counties let jobs in their permitting and inspections departments stay vacant after the Great Recession, since there was so little construction happening. But North Carolina turned around quickly and is now booming, he said, and local governments haven’t caught up.

One of his bills, HB 332, would let overworked local governments contract out their home inspection work to private companies when dealing with multifamily complexes like apartment buildings and townhouses. It’s already allowed for commercial development, he said, and could shave months off the waiting time for new housing to get built.

Zenger said in some cases, permit delays have shut down entire projects because the cost of materials rose so much while the builders were waiting for approval.

“It’s gotten a whole lot more traction, this time, because of inflation,” he said of the bill, and how it passed the House last year but failed to advance in the Senate.

Rep. Allison Dahle, a Cary Democrat, was initially skeptical. She wondered if privately contracted inspectors could be trusted to thoroughly inspect a home the same way a city inspector might: “How do we make sure that Company X is doing their job without any undue influence?” she asked.

Zenger said it would be the city, not the developer, paying those third-party inspectors. And only rarely would the developer even pick the inspector, he said; usually that would be up to the city too.

And while local governments would be the ones paying, Zenger said, he believes it would actually result in governments making more money because permit fees can easily reach many thousands of dollars. So the more permits cities issue, even if it means outsourcing the work, the more fees they can collect.

The League of Municipalities, which lobbies on behalf of city governments, isn’t totally convinced the bill is a good idea. Nor is the Association of County Commissioners.

Representatives from both groups said Thursday they’re not entirely opposed to the bill but want to continue working with state legislators to address concerns about unintended consequences.

“Speed is important to our members,” said Derrick Applewhite, for the League of Municipalities. “But health and safety are also paramount.”

More changes approved

The other two bills advancing Thursday were less controversial.

HB 320 is aimed at streamlining code inspectors and building inspectors so that two different people don’t always need to inspect the same property.

HB 252 addresses situations in which a large development would be built in multiple different city and county boundaries. Instead of the current headache of dealing with all those different and potentially contradictory rules from the various cities and counties, this bill would have the developers pick one and go with it.

Some lawmakers were skeptical that that would mean developers always picking whoever had the least strict rules, but Zenger said oftentimes the places with stricter rules also have more water and sewer capacity, allowing developers to build more homes on the same piece of land.

The groups for cities and counties said they didn’t oppose the change and it passed without much debate.