JOHN HOOD COLUMN: Strike a better balance on housing

Published 2:30 pm Wednesday, May 3, 2023

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The North Carolina General Assembly is bustling with activity.

Lawmakers are considering a dramatic increase in parental control over the education of their children, major changes in school governance and the structure of state government, pro-consumer reforms of the state’s energy policies, an acceleration of pro-growth tax cuts, huge investments in public buildings and infrastructure, tighter restrictions on abortion and dozens of other high-profile measures.

Even if none of these passed, the current session would be notable for the passage of Medicaid expansion, which brought more than a decade of rancorous debate to a close. But many other consequential bills will pass.

Here’s hoping the 2023 session will be remembered in part as the “affordable housing session.” Because North Carolina is an attractive place to live and work, prices would be rising across many of our housing markets even if Washington policymakers hadn’t bungled their way into an inflation crisis. What’s making it much worse, however, is the extent to which local regulations unnecessarily raise the cost of building, selling, and renting homes to willing consumers.

Lawmakers have filed several bills to address the problem. One of them, House Bill 409, recently passed that chamber with a gigantic 106-7 margin and now awaits action in the North Carolina Senate. It confirms the right of North Carolinians to build accessory dwelling units (ADUs) on their property even if it’s currently zoned for single-family housing.

ADUs — sometimes called granny flats or tiny houses — are already allowed on single-family lots in many communities. And H.B. 409 doesn’t prevent a locality from regulating certain aspects of their construction or use. But it does prohibit localities from requiring that only family members may live in such units, for example, or from imposing minimum parking requirements.

Another measure, Senate Bill 317, would offer property-rights protection in a different situation: when developers purchase large parcels of land (at least 10 acres) and designate at least 20% of the homes they build as “workforce housing,” most of which must be sold to households of modest means. By meeting these conditions, developers would receive exceptions from some costly local regulations.

“This bill is a targeted free-market response to our housing crisis,” said one of the primary sponsors, Sen. Paul Newton, “and it is intended to ensure houses get built.”

I agree. Still, there are passionate critics of these bills, and of others that seek to curtail the regulatory power of counties and municipalities. They argue that localities possess the authority to impose housing and zoning codes for good reason — that people who already live in or near the affected communities ought to have a say in what’s built there.

Now, just to be clear: in North Carolina, at least, the relationship between local governments and the state isn’t comparable to the relationship between state governments and Washington.

In the latter case, delegates from already sovereign state governments met in 1787 to fashion a new federal constitution. It was then ratified through a state-by-state process.

Subsequent amendments, starting with the Bill of Rights, were also ratified by a process in which states were represented and after which a requisite number of state electorates had to approve.

By contrast, North Carolina localities have only the power granted to them by the legislature. I do think localities should retain some regulatory authority over land development, though primarily to ensure proper connections to adequately provided infrastructure. But they shouldn’t be able to use housing or zoning codes to enforce some residents’ preferences over others — including future residents who don’t yet live in a given jurisdiction and whose interests are represented by those who aspire to build and sell homes to them.

This distinction is simple to state but, admittedly, challenging to implement. I see legislation such as H.B. 409 and S.B. 317 as striking a better balance between the legitimate powers of local governments and the legitimate rights of property owners. The result is likely to be more-affordable housing for North Carolinians.

John Hood is a John Locke Foundation board member.