When the General Assembly overrode former Gov. Roy Cooper’s veto and passed Senate Bill 382, legislation primarily focused on hurricane recovery and executive powers, it also strengthened state law safeguarding landowners against local government overreach.
Now, any local zoning change that would reduce allowed land uses or density will require property owners’ written consent. In addition to enhancing property rights protections, the amendment makes zoning more predictable for homeowners, businesses, and developers.
Zoning regulations are an obstacle to housing affordability and business dynamism, so the new restraint is good news for North Carolinians. Some state and local officials are concerned that it will impede local governance, but the experience of other states should provide reassurance.
Zoning and down-zoning
North Carolina delegates zoning power to municipalities and most counties. Zoning divides a jurisdiction into districts, each subject to different regulations. Every district has a unique list of allowed and prohibited uses and limits on building dimensions.
Localities regularly rezone to allow or restrict new developments in specific areas. A rezoning that allows new uses, relaxes dimensional restrictions, or increases the allowed density is called an up-zoning. A rezoning in the opposite direction is called a down-zoning. But some rezonings do both at once. For example, rezoning land from a residential district to an industrial one both down-zones (by banning housing) and up-zones (by legalizing factories).
Zoning changes may leave some property owners out of conformity with zoning. For example, properties in a rural area with a mix of farming, homes, and small businesses may find themselves out of conformity if rezoned for suburban growth that bans agriculture and segregates homes from businesses. Nonconforming uses are generally allowed to continue as they are, but owners face bureaucratic hurdles if they wish to expand, adjust, or even renovate their property.
The down-zoning amendment
The new amendment expands North Carolina’s protections against nonconsensual down-zoning, which previously covered only down-zonings requested by members of the public. Now, consent is required even when a local government initiates the down-zoning. It defines down-zoning as any “zoning ordinance that affects an area of land in one of the following ways:
- By decreasing the development density …
- By reducing the permitted uses of the land … to fewer uses …
- By creating any type of nonconformity on land not in a residential zoning district … ”
Under this definition, a nonconsensual, city-initiated rezoning that reduces residential density from eight units per acre to six units is now illegal. So is a nonconsensual rezoning that imposes a height limit of two stories in a commercial district where one building is three stories tall.
Finally, the law is retroactive for 180 days, and would therefore reverse some rezonings enacted since June 14, 2024.
How zoning will change
The day-to-day practice of zoning may change only marginally. Arizona, Florida, and Oregon have had decades of experience working under similar laws, and their practice of zoning does not differ radically from other states.
Most obviously, the law prevents egregious down-zonings. For example, the Town of Nags Head, in response to a proposal to build workforce housing, instead banned multifamily housing from the only district where it had previously been allowed. Such exclusionary hardball is no longer legal.
But most of the regular business of rezonings, planning, and development will continue as usual.
North Carolina planners may now be more cautious, taking care to avoid accidental down-zonings that would void their work. They might also be hesitant to grant development rights that they cannot later rescind or revise.
Objections and potential hard cases
Skeptics may reasonably point to administrative difficulties or cases where downzoning seems to be firmly in the public interest. Let’s give some of these objections careful consideration.
Separating noxious uses from homes. One of the best arguments for zoning is that it creates a limited place for land uses that pollute or create safety hazards. But what if a locality has allowed a noxious industrial use adjacent to a neighborhood and now wishes to prohibit it? The locality, recognizing its past error, will now need to compensate the owner to obtain down-zoning consent. The compensation might be cash, but it might involve up-zoning the land to allow some more valuable (but less offensive) use or a swap for city-owned land in a more appropriate location.
Making space for industry. A more common problem might be how to set aside land for industrial growth if existing rights to residential uses cannot be extinguished nearby. Planners will have to work through consent-based models, identifying landowners who see value in shifting to industrial use and appropriate buffer zones.
Protecting agricultural or rural land. Many planners and citizens want to keep rural areas rural. Zoning is one way to do so, but it has always been an unfair way, creating a public benefit at the expense of rural landowners who lose land value. Conservationists have fairer options, including purchasing long-term conservation easements (although the state ought not allow these in perpetuity). And planners can do what they ought to have done long ago: reduce regulation in high-demand cities and suburbs to accommodate growth there rather than pushing it into far-flung rural areas.
Adopting form-based codes. Some localities have adopted aspects of form-based zoning, which regulates the shape and placement of buildings to achieve a desired urban design. Form-based zoning might require that a new building have a pitched roof and rear parking, for example. Switching to a form-based code often makes some existing structures nonconforming, a cost proponents have considered too lightly. The amended law likely blocks the non-consensual adoption of form-based codes in non-residential areas. Planners can instead offer optional form-based overlays.
Good faith compliance and universal written consent. The strongest objection to the amendment may be its operational difficulty. First, it is unrealistic to imagine cities getting written consent from all property owners in a broad area subject to rezoning. Second, any complex zoning change, even one undertaken in good faith with due diligence, might accidentally introduce a nonconformity. To ensure that major rezoning efforts are not reversed by minor flaws, planners should specify that the rezoning does not apply where it creates a nonconformity.
Potential modifications
As the General Assembly weighs these objections and other public feedback on the new law, it may wish to consider some modifications:
Clarifications. Some terms in the law’s definition of down-zoning, like “residential zoning district,” could be interpreted in several ways. Most importantly, the second point should be rewritten to clearly protect all currently allowed uses.
Limited look-back. If down-zonings are banned, then up-zonings are irreversible. To help local officials overcome their reasonable caution, the General Assembly could allow localities to reverse or revise a rezoning within a probationary period, perhaps five or ten years. This would allow bold up-zoning with subsequent refinement, as in Charlotte.
Allow Arizona-style buyouts and/or exceptions. In Arizona, a locality may down-zone unless a property owner can show that this has diminished her property value. In that case, the locality must either waive the down-zoning for the owner or compensate her. In practice, localities have chosen waivers on a property-by-property basis as owners raise objections. Arizona’s law also has several exceptions, such as allowing uncompensated down-zonings to restrict heavy industry and adult-oriented businesses.
Conclusion
North Carolina took a bold step to protect property rights from local restrictions. Although the change is powerful, it will restrict few legitimate, desirable local regulations while forcing planners to take more permissive, affirmative approaches to land use. It’s a small start toward reducing the thicket of land-use restrictions which prevent North Carolinians from providing homes, jobs, and services to their neighbors.