On Dec. 8 at Raleigh’s City Club, panelists from both the left and right sides of the aisle were largely in agreement that North Carolina’s booming urban areas are not seeing enough homes being built for how quickly populations are growing, and that this was increasingly spiking the price of homes to a place outside the reach of too many residents.
The summit, billed as “Keeping Housing Affordable in North Carolina,” was co-organized by the CATO Institute and the John Locke Foundation.
The event began with CATO Institute senior fellow Michael Tanner presenting a report on what went wrong in California’s housing market and how other states can avoid their fate.
“They stopped building housing, and the result is what you see today,” Tanner said. “And you’re seeing that in places like North Carolina now.”
He said, like California, North Carolina is drawing people quickly because of good economics, a great climate, good universities, and other attractive qualities. But, also like California, the state isn’t building enough homes to house all of these new residents.
He said that “the situation is actually growing worse,” because while a decade ago the state was only slightly behind in building housing, that gap between the number of people arriving and the number of houses being built has expanded. And as a simple supply-and-demand equation, this has made those houses much more expensive as everyone competes to buy them.
“More and more we find out that this one is not [a complicated equation]; this is a problem of Economics 101,” Tanner said.
After sharing some of the impacts of these spiking housing prices — including lost jobs, poverty, racial segregation, homelessness, and putting native North Carolinians at a comparative disadvantage — he highlighted a few solutions that could increase the number of housing units coming onto the market.
Tanner said the main impediment was exclusionary zoning, which he said included overregulating things like setbacks, multi-family residences, parking spaces, lot-sizes, building height, and accessory dwelling units. He also said making building permits “by right” if they meet local regulations is important so that local zoning and planning boards don’t hold up projects unjustly.
Tanner said North Carolina’s legislature could intervene and pass state-wide legislation on this because the state is a quasi-Dillon’s Rule state, meaning that generally the state gets to decide what areas localities have jurisdiction over, as opposed to Home Rule states, where localities can rule on things unless the state has directly ruled they cannot.
After Tanner’s speech, there were two panels to discuss the issue further. The first — featuring Tim Minton of the North Carolina Home Builders Association, Brent Woodcox of YIMBY Raleigh, and Bill Rowe of the North Carolina Justice Center — discussed the problems; while the second panel — featuring state Sen. Paul Newton, state Rep. Tim Moffitt, and state Rep. Vernetta Alston — focused on solutions.
In the first panel, Minton discussed 25-30% of the cost of many housing projects that his membership builds is due to regulations like those discussed by Tanner. Sometimes there are many units ready to be built, but local planning and zoning boards insist that they cannot use vinyl siding or other perfectly safe, efficient materials.
In the second panel, Newton, who had been a sponsor of a bill last session to address affordable housing through making building easier across the state, recounted a story of a wedding venue he was involved in building.
“I cannot describe the torture chamber that planning and zoning is unless you’ve been there,” Newton said about building the venue in “the middle of nowhere” even after getting the approval of every neighbor. “They have no concept that time is money. It is horrific, and it is real that it adds time and cost to any building project.”
He said the planning board took the opportunity to delay the project again and again. They required the parking lot to be grass surrounded by trees, but then later delayed it further to make sure that the trees were doing a good-enough job blocking traffic on the lightly traveled two-lane rural road from seeing cars.
“I guarantee you that the private sector will fill this void if we unleash them, but they cannot do that with these planning and zoning laws.”
Newton, who was just selected to be the next Senate majority leader, said that local officials are under a lot of pressure not to relax zoning restrictions, so they should be grateful that General Assembly leaders are willing to take this issue off their plate.
“We’re trying to make things easy for you with this bill, and it’s going to come back up. Some form of it’s going to come back up this session.”