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While the current legislative session of the North Carolina General Assembly is still technically ongoing, much of the major work has been accomplished for the year, including the approval of the State Budget. Our partners at the North Carolina Realtors® and the North Carolina Home Builders Association worked on and obtained the passage of several key pieces of legislation that are aimed at curbing the ever-increasing cost of housing.
Parking Reforms and Stormwater Controls – Session Law 2026-39
The new law eliminates parking minimums for new developments but exempts 20 coastal counties from this provision. The bill also makes significant changes to stormwater regulations. It now prevents local stormwater management programs from requiring private property owners to install new or increased stormwater controls for existing built upon area, previously referred to as preexisting development, as well as for other specified redevelopment activities. When development or redevelopment occurs on a site that already has existing built upon area, that area is excluded from density calculations used for additional stormwater control requirements, and it is not subject to additional stormwater control requirements regardless of whether it is demolished, relocated, replaced, or left in place during the development process. In determining the size of the area for which stormwater control measures are required, any built upon area that existed before the development or redevelopment is applied on a square foot for square foot basis to reduce that required area. Stormwater control requirements also cannot be applied retroactively to existing built upon area unless federal law requires it.
Permit Choice – Session Law 2026-41
Ambiguity existed as to whether prior approvals for conditional zoning and stormwater permits would qualify for permit choice. This language amends the statutory definitions of “development permit” and “land development regulation” to expressly include conditional zoning, rezoning, and stormwater permits, thereby eliminating the ambiguity that previously existed. This provision provides protection when local rules change mid project.
Building Codes within NC Department of Labor – Session Law 2026-41
The new law creates a new Building Codes and Interpretations Division within the North Carolina Department of Labor, with both the Building Code Council and the Residential Code Council, along with their staff and code interpretation functions, transferred from the Office of State Fire Marshal to that new division under the Commissioner of Labor. This move is considered good policy for several reasons. It aligns building code administration with a department that can focus solely on life and safety without competing pressure to protect insurance industry interests. It also creates a single point of contact for builders seeking code guidance, simplifying an otherwise fragmented process. The Labor Commissioner and the North Carolina Department of Labor have a natural alignment with the construction workforce and building trades, making the Department of Labor a more fitting and logical home for building code administration going forward.
Associational Standing – Session Law 2026-41
This provision, which is narrowly crafted, grants associational standing, allowing trade associations to bring civil actions on behalf of their members against local governments that violate state statutes or act beyond their legal authority in the building and development process. When a local government is found to have violated state law or acted beyond its authority, the court shall award reasonable attorneys’ fees and costs to the prevailing party.
This is good policy because it is narrowly drafted, limited to associations whose members have a direct legal stake in the development decision being challenged, and confined to clear legal violations, not policy disagreements.
Performance Guarantee Choice – Session Law 2026-46
Currently, the choice of security instrument that a developer may use to satisfy performance guarantee requirements (such as surety bonds, letters of credit, cash, or other equivalent forms) is not applied consistently across North Carolina Department of Transportation (NCDOT) projects. Local governments already allow developers flexibility in selecting the form of security that best suits their needs, but this same flexibility is not consistently extended under NCDOT driveway and encroachment permit statutes. This provision amends the relevant NCDOT encroachment permit statutes so that developers can choose their preferred form of security, in a manner consistent with what state law already permits for local government permits.
Incentive Districts – Session Law 2026-12
This legislation establishes a specialized framework for financing and building in targeted communities. Developers front the cash for vital local infrastructure and site improvements instead of local governments draining their general funds. Qualified new developments built by a builder and held for sale within an approved incentive district receive a 90% property tax exclusion on appraised value for up to 10 years. After the 10-year period (or upon property sale), the local government begins collecting 100% of the standard property taxes on the improved, higher-value asset.
My Take: Measuring advocacy impact is not often obvious. And the work we do is often misinterpreted. Instead of checking a box, and assuming a timeline of wins, I would like our audience to view our impact by imagining what our region would be like WITHOUT our voice of reasonability, representation, and persuasion. Politics is a slow machine. But it’s the machine that makes the rules. Often without the perspective of experience, or industry knowledge. The above examples of progress should be celebrated in context. Think about doing business without the benefit of our relentless voice that is pushing back on regulatory quick-sand decisions.
I’ve said it before. If you want to help, become engaged not just in our events, but by reading the information we offer, sharing the facts and metrics of positive growth with others, and being a voice that insists advocacy matters. Make internal education a pivot point for your business success. And, as always, if you have a question, please reach out to me.
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The data center controversy continues to make the rounds. Last night (August 10 Statesville City Council Meeting – 56:06) the Statesville City Council held a hearing on a proposed 150-day Data Center Moratorium. City leaders chose to hold a hearing after it determined its current code is outdated and inadequate in addressing current conditions.
During the course of the hearing, several residents came forward seeking a longer-term pause on activity and the Council moved to extend the time period for consideration to 180 days.
Following lengthy testimony, the Council passed the ordinance on first reading and will hold a subsequent vote on September 14th. On that date, we expect the institution of the 180-day moratorium to pass.
My Take: Similar hearings and discussions have happened throughout our region and around the country as many municipalities realize their codes and regulations need to be updated. Concern is natural when our understanding of a technology is limited causing us to pause and pull back. Having said that, I am hopeful that staff and stakeholders will use the time wisely and develop a regulatory framework that allows the data center to move forward. In my opinion, we need to work fast to create a good framework for vetting approvals. If we don’t decide how we’re going to control our own data, it will be controlled elsewhere by others. Our hope is the big picture stays in focus for our leaders.
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