New NC Housing Law Could Put New Builds At Risk

North Carolina’s recently approved House Bill 488 will impact street regulations, building inspections, energy conservation codes, and stormwater control regulations. Passed August 2023, many locals in the housing industry worry that this bill will undo the two years’ work the North Carolina’s Building Code Council has put into aligning the state’s current energy conservation code–last updated in 2009–with international energy conservation codes. 

What is House Bill 488?

House Bill 488 is “an act to reorganize the Building Code Council and create the Residential Code Council, to amend various provisions of the North Carolina State Building Code and land development regulations, and to increase the project cost minimum for applicability of general contractor licensing requirements.”

Not only will the bill prevent North Carolina’s Building Code Council from making revisions to the state building code until 2031, but it also proposes a completely separate panel, the Residential Code Council, that would give developers more influence and control while restricting the authority of the existing council. 

The new council would be made up of six members chosen by the General Assembly and seven appointed by the Governor. Under this bill, the existing 17-member Building Code Council will have authority over less controversial issues, such as fire safety, accessibility, structural soundness, and overall construction practices.

Other important features in this bill include: 

• Increasing and conforming permitting and General Contractor license thresholds to $40,000 would prohibit a local government from requiring more than one Residential building permit for multiple projects happening at the same time at the same address.
• Various provisions related to land development regulations and General Contractor licensing laws. 
• Changes to street regulations, building inspections, energy conservation codes, and stormwater control regulations. 

Opinions on the bill

The controversial bill has left developers, lawmakers, and homeowners with a lot to think about. Governor Roy Cooper tried to veto the bill, stating, “This bill stops important work to make home construction safer from disaster and more energy efficient, and ultimately will cost homeowners and renters more money.”

Those who agree with Governor Cooper worry that the bill will disqualify North Carolina from federal funding like FEMA’s Building Resilient Infrastructure and Communities program. This program gives grants to address future disasters, such as flooding and hurricanes, which North Carolina experiences yearly somewhere in the state. This is especially concerning for those who own property along the North Carolina coast, where high winds and heavy rains have been known to cause significant damage. 

The sheathing dilemma 

One feature of this new bill pertains to homes along North Carolina’s coastlines that are susceptible to storm damage. The law requires homes along the coast, where wind speeds could reach up to 140 mph in a major hurricane event, to undergo a sheathing inspection. However, it prevents local governments from requiring it in other areas. Many home builders and experts feel that all homes should need this critical inspection. A failure to do so makes homes “less resilient and less safe,” says Roy Wright, the president and CEO of the Insurance Institute for Business and Home Safety.  

A failure to check and inspect the materials used to create a home’s frame can leave it susceptible to damage during a storm. It also means that homeowners won’t have accurate data about how much wind their homes can withstand. The existing building code did not require an inspection of these materials. Still, it does require builders to inspect these elements and assume responsibility for their integrity. 

Waiting for a sheathing inspection can slow the building process and expose the frame to the elements. This causes a whole new set of problems for builders, which is why many builders do not support the bill. Not waiting for a sheathing inspection would allow them to move through the building process faster, add house to the frame, and protect it more effectively throughout the build.

But there are two sides to every debate. One of the strongest supporters of the new bill is the North Carolina Builders Association. Steven Webb, the Director of Legislative Affairs for the group, discussed House Bill 488 in a video shared on Facebook, saying the bill “overcame objections from over 50 outside special interest groups and the governor.” 

The Building Association believes the bill will keep home construction expenses low and provide a solution for more affordable housing. It will also allow them to set their costs and, in turn, increase their profits. 

The impact on energy efficiency

One of the goals of the existing Building Code Council is to bring North Carolina’s energy efficiency codes up to 2021 international standards, which would cut energy costs and reduce pollution. Stricter insulation, windows, and AC system rules would only apply to new homes. Still, builders worry it would significantly hike the price of construction. 

The lead sponsor of the bill, Rep. Mark Brody, explained that tighter energy standards would add an average of $24,000 to the price of a typical single-family residence in North Carolina, which could make owning a home even harder for typical North Carolina families. 

However, an independent analysis by the US Department of Energy’s Pacific Northwest National Laboratory said the cost passed on to homeowners would be far less, predicting the new energy standards will only add $4,000-$6,000 to the average new home build price. 

This is not the last homeowners and builders will hear of House Bill 488. A second update to the bill will reduce the fees builders have to pay to review their erosion and sediment control plans.