As a North Carolina native and proud descendant of multiple generations of local builders, I have witnessed firsthand how North Carolina’s explosive growth has created both incredible opportunity and unspeakable frustration to my family. Construction is booming, but for local, small builders, it has never been harder to contribute to growing their community.
Buildable lots are hard to find and expensive to obtain, zoning regulations are extremely difficult to navigate, and entitlements are more elusive than ever. Yet, large developers can often take these challenges and use them to their advantage. At a time when local and large developers alike are so vital to the solution, we cannot afford to leave behind vital contributors.
In many municipalities incentives and government contracts will be given to affordable or mixed-use development projects that meet certain standards. These incentives often include tax exemptions, expedited permitting, discounted land, and difficult-to-obtain rezoning permissions. However, the criteria to meet these requirements is burdensome and expensive, typically something out of reach for local builders.
Larger developers with greater financial and legal support can easily navigate these requirements, and in some cases even lobby for tighter restrictions that tilt the playing field further in their favor. As a result of this bureaucratic labyrinth, local builders often do not have the time or money required to keep up. While these developers do contribute significantly to the overall housing supply, these one-sided incentives limit natural competition in the building industry and suppress local support in meeting the demand.
Natural competition is important in the building industry because housing must serve a variety of markets, price ranges, and community needs. When only the largest players get to benefit from regulations, yes, more units are built. However, fewer homes are built that truly reflect the community and their needs. Real competition ensures a more diverse housing stock and options for families, seniors, first-time buyers, and everyone in between.
Do North Carolinians really want hundreds of cookie-cutter townhomes and a dozen monotonous apartment buildings with only a modicum of “affordability”? It’s possible. But why should a select few firms and local bureaucrats decide what you want? Give local builders a chance to fairly compete in the marketplace, without the bureaucratic barriers currently in place, and the entire housing market benefits.
The affordable housing shortage is not a result of large developers; in fact, they are absolutely a part of the solution. However, when regulations and fees prevent local competitors from helping meet demand too, the system fails to serve the full range of the housing market.
Consider permitting and inspection fees which can add anywhere from $10,000 to $20,000 to a home. Large developers are much more equipped to absorb and manage these costs through scale and volume. For small-scale homebuilders, these additional costs will eventually have to be passed on to their buyers and renters.
Over time, this dynamic essentially prevents them from being able to participate in subdivision development altogether because they cannot compete with large competitors’ prices. This further narrows the market that local builders can serve and reduces the diversity of housing options available to North Carolinians.
So, what can be done to encourage fair competition in North Carolina’s building industry? House Bill 765 offers a promising start. This bill, if passed, offers a chance to level the playing field and reduce the red tape for not just a few, but every builder striving to meet North Carolina’s growing housing demand.
It would streamline the permitting process by implementing clear time frames, significantly reducing costly and unpredictable delays that disproportionately affect small builders. It would also prevent local jurisdictions from imposing hidden fees or requirements that are not explicitly stated in state law, actions that can quietly derail smaller projects. Additionally, it supplies more opportunities for buildable land by altering outdated zoning restrictions that limit residential development. By making it easier to build efficiently, House Bill 765 helps restore balance to the NC housing market.
Local builders are fundamental to North Carolina, but relentless regulation certainly does not help them flourish. Large developers and local homebuilders alike should be able to compete in North Carolina. But, when the building process is made easier and more affordable for only one group, it inevitably puts others at a disadvantage. If we truly want diverse, affordable, and community-based housing solutions, we must allow all builders, big and small, to compete fairly.