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New bill aims to help North Carolina workers afford housing

New home construction in Knightdale. Carolina Journal file photo

On Wednesday, the North Carolina Senate introduced a creative solution to address critical workforce housing shortages for North Carolinians.

Specifically designed to create affordable housing for teachers, first responders, nurses, and first-time buyers, Senate Bill 317 would provide a new option for developers to bypass certain local regulations if the developer agrees to sell at least one-fifth of the lots at what would likely be a loss.

Despite taking a loss, developers would benefit by increasing profit margins on the other 80% of lots.

Under the bill, developers could pursue this option by (1) buying at least 10 acres, (2) using 20% of the lots for single-family “workforce housing,” and (3) selling at least half of those lots at a price affordable for prospective buyers who make 80% of the “area median income,” while the rest of the “workforce improved improved lots” can be priced for those earning up to 100% of the median area income.

“We have a workforce housing crisis in North Carolina,” said bill sponsor Sen. Paul Newton, R-Cabarrus. “Firefighters, teachers, and nurses across our state can’t afford to buy a home. As a result, many North Carolinians are missing out on the American Dream and the opportunity to build generational wealth.”

In Raleigh, seasonally adjusted median home values have gone up 31.6% to $423,838 since January 2021 and 109% since January 2013, when the median value was $203,000. In Charlotte, home values increased by 26.9% over the past year.

“Reasonably priced housing options are scarce in North Carolina cities due to the stranglehold local governments have on new building,” said Paige Terryberry, Senior Analyst for Fiscal Policy at the John Locke Foundation. “In North Carolina, the demand for housing units is up. Yet new home growth is stagnant or below its potential in many areas due to a handful of factors further explained below. As a result, prices are rising.”

According to a 2021 study from the National Association of Home Builders, about 24% of the price of a home stems from the cost of government regulations. About 10.5% of the final house price was attributed to regulation during the development of the lot, and the other 13.3% was due to regulation during the construction phase.

S.B. 317 is primarily aimed at decreasing that 10.5% regulation cost to developers.

“I think it’s a really creative solution to bring developers and local governments to the table to solve the problem of low housing supply in North Carolina,” said Jordan Roberts, director of Government Affairs for the John Locke Foundation. “We hosted a policy summit recently where we had speakers from the Left and the Right agreeing on these very reforms to make it easier to build more, and a different variety, of housing in North Carolina. I’m glad to see these bipartisan ideas come to fruition in this piece of legislation.”


Newton suggested that another benefit to homeowners under this bill would be that the 80% portion of the developments that aren’t subject to workforce housing requirements will have a natural incentive to help upkeep the other 20%.

“This bill is a targeted free market response to our housing crisis, and it is intended to ensure houses get built,” Newton said. “This bill minimizes regulatory burden to create a market incentive for builders to develop affordable housing units by constructing market-rate homes without heavy regulatory costs.”

Mike Carpenter, executive vice president of the North Carolina Home Builders Association, said this bill would help clear unnecessary regulations for developers.

“We’re calling on the market to solve a problem that, in many ways, is being created by overregulation,” said Mike Carpenter, Executive Vice President of the North Carolina Home Builders Association. “We can help fix this housing crisis by removing some of the regulation—what we would contend is unnecessary regulation—to allow the market to respond.”

Newton does not think S.B. 317 will stand in the way of local government oversight in critical areas.

“Local government units will still have authority to oversee building codes, environmental permits, and the implementation of income requirements for the workforce housing units,” Newton said.

“North Carolina has done an incredible job of attracting large numbers of job creators to our state,” said Newton. “Implicit in our promises to job creators is that their employees will have somewhere to live. This bill makes good on that promise and seeks to allow all North Carolinians to access the American Dream of homeownership.”

RO Editor’s Note: State Rep. Ben Moss, R-Richmond, introduced the Make North Carolina Home Act in February. Click here to read about that legislation.

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