Real Deals

Real Deals: Homebuilder bills would limit local control

dbracken@newsobserver.comMarch 13, 2013 

  • Proposed homebuilder legislation • House Bill 120 would prevent local governments from requiring inspections for one- and two-family houses other than the eight types delineated in the state building code. Any additions would require approval from the N.C. Building Code Council. The bill also postpones any updates to the state’s homebuilding code to every six years – twice as long as the current revisions that occur on three-year cycles to match national standards. The bill was approved by the House on Tuesday and now heads to the Senate. • House Bill 150 would prohibit local governments from adopting regulations related to building design and aesthetic issues in one- and two-family dwellings. Structures in historic districts would be except from law, as would manufacturing and modular housing. The bill would also not limit the covenants that homeowners associations could place on communities. The bill was approved by the House’s Regulatory Reform Committee on Wednesday and now heads to the full House.

— If you were at the General Assembly this week, you heard a lot about how local governments have become a kind of Big Brother to the homebuilding industry.

The argument goes like this: Through the adoption of extra inspections and arbitrary design and aesthetic guidelines, local governments have both overstepped their legal authority and added all sorts of delays and unnecessary costs to the construction process.

In an effort to rein in such overreach, legislators have introduced two bills this session that are making their way through the House and Senate. The bills are worth a closer look, in large part because they are the latest example of how the growth issues that dominated the conversation in the Triangle and elsewhere before the housing boom are resurfacing.

One piece of legislation – House Bill 120 – would prevent local governments from requiring inspections for one- and two-family houses other than the eight types delineated in the state building code. Any additions would require approval from the N.C. Building Code Council. The bill also postpones any updates to the state’s homebuilding code to every six years – twice as long as the current revisions that occur on three-year cycles to match national standards.

The second – House Bill 150 – would limit the ability of local governments to adopt design and aesthetic controls over one- and two-family houses.

The bills are being pushed by the N.C. Homebuilders Association and opposed, not surprisingly, by most cities and towns in the Triangle. Few regions in the state are expected to experience the volume of new home construction in coming years as this region, and thus many officials here are wary of changes that might limit their ability to shape how that development occurs.

Shades of beige

But at a legislative hearing Wednesday, Rep. Nelson Dollar, one of sponsors of House Bill 150, said local governments are regulating such things as “what shade of beige the cornice is on your house.” Dollar, it should be noted, is from Cary, a town that is legendary for regulating aesthetics, which means he’s probably more familiar than most with the various shades of beige.

Other supporters of the bill cited rules dictating the number and types and rooms; where garages entrances must be; and what materials can be used on the exterior of a house.

“When local governments dictate these types of design requirements, they displace the important role the free market plays in building appropriate housing stock,” said Mark Zimmerman, a Chapel Hill real estate agent who is the legislative chairman for the N.C. Association of Realtors. “Homeowners lose the ability, and quite frankly their right, to choose the design elements of their home as it fits their individual needs and desires.”

Effect on housing costs

Opponents, while acknowledging that some design rules may cross the line, say the vast majority are used to establish and retain a community’s character and are adopted after extensive dialogue with their residents.

“Our concern is that you are passing a bill that will really take the entire state to the lowest common denominator just for the actions of a few,” Raleigh Mayor Nancy McFarlane said. “This bill is in direct conflict with what we hear from our electorate.”

The issue of affordability has been raised in discussions about both pieces of legislation, with supporters saying the bills would lower prices by eliminating unnecessary costs. At least one affordable housing advocate, the N.C. Housing Coalition, says its members agree design and aesthetic requirements increase the overall costs of housing.

Affordability has not really been the housing market’s problem in recent years, particularly with interest rates hovering at historic lows. Homebuilders, after suffering a near-death experience with the bust, have become remarkably efficient at delivering more house for less money.

But they would welcome any changes that resulted in more regulatory consistency across municipalities and improved their profit margins.

The question is what the cost would be for communities in the Triangle, many of which are not struggling to attract interest from homebuilders. As more development occurs here, the battle over what it should look like will escalate and play out in heated town and city council meetings.

As anyone who has attended such meetings will attest, there are often widely differing opinions on whether a regulation is unnecessary or integral to protecting a community’s property values.

Bracken: 919-829-4548

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