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House rules: Legislature eliminates municipal authority to regulate home design

BigGarageHouseTowns around Charlotte and the state would have to reassess development ordinances and design standards for single-family housing should a bill passed by the legislature this week become law.

The N.C. House of Representatives on Tuesday passed Senate Bill 25, which limits the authority of municipalities to regulate aesthetic elements of home construction. It now awaits the signature or veto of Gov. Pat McCrory.

“We’re going to go through the ordinance meticulously and make any adjustments we need to make … to comply,” said Jack Simoeau, Huntersville planning director.

The 98-17 vote on the bill’s second reading followed about 45 minutes of debate Tuesday afternoon. It passed the third and final reading on a voice vote.

“Let me just say, in summary, that we do believe this bill is a balanced approach,” said Rep. Nelson Dollar, a Wake County Republican who sponsored a House version of the bill. “This bill helps … homeowners have the homes that they want and helps make those homes more affordable for working people.”

Senate Bill 25 prohibits local governments from dictating single-family and townhome colors, exterior materials and architectural ornamentation, roofs and porch materials and styles, window and door placement and style, and room layout, including the number and types of rooms. Those requirements also can make homes more expensive.

Exceptions are provided for homes in historic districts, manufactured homes, and construction elements required to meet safety codes and flood insurance conditions. Private homeowners association covenants also can continue to dictate design standards.

Craig Culberson, Mooresville’s senior planner, said the town has not yet discussed contingencies should the bill become law.

“We’ll need to just look at: What tools do we still have at our disposal to use to try to keep quality development?” he said. Compared with other communities, he said, Mooresville has very few requirements, but that it has focused on reducing the visual dominance of garages that was popular in the 1990s.

Rep. Paul Luebke, a Durham Democrat, defended such requirements during the debate, saying, “This is about design standards in cities and counties where cities and counties have made a conscious decision to put these ordinances on the books. They have concluded that their cities and towns need this kind of help” to keep neighborhoods compatible and “make their cities better places to live.”

He said that if voters don’t like those decisions, they will vote out the people who make them.

“We should not, at the level of the General Assembly – big government – be telling local governments what to do.”

Proponents of the pending legislation, including the N.C. Home Builders Association and the N.C. Association of Realtors, say regulating matters such as garage-door size and paint color on homes is beyond the zoning authority granted to local governments by the state’s constitution, general statutes and legal precedents. They say such rules needlessly hurt their businesses and the local economy by raising prices beyond what some buyers can afford.

Several speakers cited a 2012 North Carolina Supreme Court decision in Lanvale Properties v. Cabarrus County, in which Justice Barbara Jackson wrote that a local government’s zoning authority “cannot be exercised in a manner contrary to the express provisions of the zoning enabling authority.” That case involved the county’s requiring developers to pay school impact fees under its adequate public facilities ordinance.

While the court differentiated between the powers that counties have versus incorporated municipalities, it also indicated that the ability to assess zoning-related fees needed to be explicitly and unambiguously granted by the state legislature.

North Carolina municipalities derive their authority to regulate through general statutes and local acts, and the interpretation of those laws by the courts. The difficulty for North Carolina towns and cities lies in interpreting the specificity and ambiguity of enabling legislation passed by the state.

In recent years, state Supreme Court decisions seem to be interpreting grants of authority more narrowly than in the past, according to attorneys who follow such decisions.

Regarding municipalities regulating home design, Rep. Jonathan Jordan, a Republican from Ashe County, said during the floor debate that “they didn’t have the authority in the first place to do these things.” He said that municipalities seeking such controls can ask legislators to pass a local bill granting the authority.

Those against the proposed measure, including the N.C. League of Municipalities and local governments across the state, say regulating the aesthetics and design of new-home construction protects existing homeowners by preserving the character of neighborhoods. The League of Municipalities offered an amendment, which failed, that would allow municipalities to continue regulating design for infill development and existing neighborhoods.

Dollar said that communities can still meet those design standards voluntarily, but that the bottom line was that municipalities don’t have the authority to require them.

“The abuses that we have seen have been from … towns small, medium and large,” Dollar said on the House floor.

The bill, along with another that would eliminate rezoning protest petitions, has been the highest priority of the Real Estate and Building Industry Coalition during this legislative session, said Executive Public Policy Director Joe Padilla.

“Our argument has been that the state law doesn’t give local government any control” over such design elements, Padilla said. “The reality is that the market dictates what sells. If the builder builds an ugly home, it’s not going to sell.”

But both on the House floor and among municipalities, concerns were raised over the effect the bill may have on neighboring properties and possible unintended consequences.

“The end result is that if you live in a neighborhood, you could get pretty much anything next door as long as it meets the building code,” said Mooresville’s Culberson. “A lot of the things that homebuilders brought us that they wanted to put in their communities fit with our regulations. It may not be as impactful here, if they continue to offer those house plans.”

However, the bill stipulates that such regulations may be applied if the developers consent to those conditions as part of the development approval process.

And the question of how that consent might be obtained has stirred conversations among planners, architects and builders.

One possible consequence would be that communities that have implemented design standards in exchange for allowing denser development would revise ordinance language governing small-lot development, and instead allow it only as conditional use – then use such aesthetic controls as a negotiating tool.

“I predict that we may see a lot of zoning regulations change to only permit large lot housing to bypass the negative impacts of unregulated small lot housing permitted by this bill,” wrote Craig Lewis, an architect with Stantec’s Urban Places Group in Charlotte, in an email. “For folks that want greater density, they would have to go through the conditional district process and volunteer these conditions to gain their approval. Seems like this bill might just increase process rather than relieve regulation.”

Others during the floor debate argued that tourist towns that rely on their character to draw visitors would be limited in what they could require of home design.

Many towns around Charlotte, but not the city itself, have some aesthetic controls on single-family and townhome development. Mint Hill has requirements for the amount of brick used in conservation subdivisions; Cornelius and Huntersville require that garages be set back from the home’s front plane; Davidson has requirements for front porches and the use of brick.

Simoneau said some of the garage setbacks may still be regulated based on their distance from the roads. He said development is also required to integrate buildings into the historic character of downtown, and that the town may have to revise some of that language. But generally, he said, the town has found that developers “want to comply with the town’s vision. The development community’s been very responsive.”

In Indian Trail, the Town Council last year endorsed a letter from Patti Cowan, chairwoman of the town’s Planning Board, to several N.C. legislators explaining the town’s opposition.

“Standards are in place now that promote quality within our town and any builder that wishes to expand here (is) aware of our standards,” the letter said. “Control of these issues needs to stay in the hands of local departments and committees.”

It said imposing limits to the town’s powers would be a gateway to the use of lesser-quality building materials, which in turn would reduce residential growth, property values and taxes revenue.

Similar proposals to Senate Bill 25 have passed one chamber in each of the last two General Assembly sessions, but never made it to a full vote by the other chamber. The first such bill was introduced in 2011, and drafted by then-senator and current Charlotte Mayor Dan Clodfelter.

—     Staff writer Roberta Fuchs contributed to this report


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