REBIC – NC General Assembly Update

The North Carolina General Assembly is currently winding down its work for the year and there are several positive developments to report. Specifically, two major pieces of legislation have been signed into law that significantly reduce development costs and incentivize new building projects across the state.

House Bill 162 – Parking Lot Reform and Stormwater Control

Signed into law yesterday, July 6, 2026, Session Law 2026-39, represents a landmark victory for builders, developers, and housing affordability advocates. Representative Donnie Loftis (R-Gaston) was the primary sponsor of the legislation.

• Bans Parking Minimums Statewide: The law prohibits cities and counties (excluding 20 coastal counties) from forcing developers to build a mandatory minimum number of off-street parking spaces. This removes a rigid, expensive barrier, lowering per-unit construction costs by allowing builders to design parking based on actual market demand.
• Caps Parking Space Dimensions: Local governments are barred from mandating off-street parking space sizes that exceed standard 90-degree dimensions (9 feet wide by 20 feet long), freeing up valuable land for actual residential or commercial buildings.
• Protects Redevelopment Projects: Properties undergoing redevelopment (demolished, replaced, or relocated) cannot be forced to implement new or stricter stormwater controls for existing built-upon areas, removing unpredictable regulatory hurdles.
• Encourages Runoff Incentives: It grants local governments explicit authority to offer voluntary zoning or density incentives to developers who proactively incorporate advanced stormwater controls.

Senate Bill 695 – Incentive District Financing

Senator Todd Johnson (R-Union) and Senator Michael Lazzara (R-Onslow) were the primary sponsors of Session Law 2026-12, and it introduces a powerful new economic tool that is explicitly designed to spark new construction by partnering local governments with private developers.

• Property Tax Relief: Local governments are granted the authority to create specialized development finance districts where municipalities can offer builders up to a 90% property tax exclusion on the value of new improvements.
• Long-Term Financial Incentive: This tax mechanism can be locked in for up to 10 years, dramatically improving the financial feasibility of building projects.
• Targeted Growth: The tool is primarily geared toward expanding housing availability, adding to the property tax base, and revitalizing underdeveloped areas.

While we track other priorities, and the additional details that are still being finalized, we will report back in the coming weeks. The General Assembly is scheduled to return to Raleigh on July 27th to deal with any remaining matters.

Rob’s Take: These two measures that emerged from a successful session, are clear examples of success for those engaged in developing, building, and selling real estate. House Bill 162 will be a huge cost saver for those seeking housing opportunities. Some parking spots can add as much as $50,000 to the overall cost of a unit due to materials and regulatory hurdles. — The stormwater portion of the law also settles a long-term issue with the City of Charlotte that we’ve been dealing with that misinterprets the state statute by imposing additional regulatory burdens on redevelopment projects. We believe the language is now very clear that existing Build Upon Area (BUA) is, in fact, grandfathered and additional stormwater controls cannot be mandated for those areas. — This is a big win for redevelopers and those providing infill housing. Senate Bill 695 could be a game changer and represents a new opportunity for increased collaboration between industry and local government.