Our state is growing; it’s all around us. Legislators, businessmen, and neighbors are grappling with the growth in different ways. However, one thing is certain: the regulatory framework of our state is not well-suited for the growth we are facing.
The thing is, for a state facing unprecedented growth, single-family home construction is down. All while apartment construction is booming. Yes, prices are high. But it’s not just that there’s less interest; it’s also the slow process of applying for permits for subdivision plans. What has resulted is inequity between single-family housing development and apartment development. For a state with large suburban development belts that sustain its core cities and economic zones, rather than centralized and sprawling downtowns, this is not a sign of health. This is the result of two actions.
First, local and state bureaucracy, when it comes to permit acquisition and rezoning, is causing construction delays, such as those seen in Raleigh. These delays disproportionately affect single-family homes because, in a development, each house needs its own permit approved. While the permit process for an apartment complex is more complicated, permit delays tend to affect single-family home developments more than apartment complexes, simply because of the number of permits required for a development.
What has resulted is that rents are falling, while home prices are skyrocketing. In fast-growing areas like Raleigh, this presents a huge problem. This imbalance tilts the growth scale, from focusing on families to focusing on young professionals. The issue? The state is staring down an economic plateau, which has caused panic during the state budget process. If the state’s economy were to be less advantageous, young professionals with short-term apartment leases are prone to move away, while families are more fit to stick it through.
This leads us to the second reason for the apartment-housing inequity: cities across our state are promoting apartments as “affordable housing.” The issue? Apartments are too transitory; they aren’t stable enough to be considered permanent housing. That being said, it’s easy for cities to push for affordable housing by building more apartments, but that doesn’t significantly drive housing prices down, because they are two different markets. Moreover, these markets aren’t interchangeable; flooding one with supply doesn’t fix shortages in the other. So, while apartments are great to attract younger and different crowds to our state, we still need a strong single-family housing market to be the foundation of our state.
All things considered, North Carolina remains a seller’s market, where there are more buyers than available homes. The NC supply of homes is at four months — under the six-month threshold for a buyers market — one of the many factors contributing to rising home prices. By increasing the housing supply quickly, we can not only cool the housing-cost crisis but also create a more stable economic base for the state.
But how do we do this? Well, it’s quite simple; we establish an expedited review application for residential developments. We can do this by following what states like Florida have done. Florida has required counties with over 75,000 residents and municipalities with over 10,000 residents to establish building permits for expedited review. These permits are specifically for residential developments, allowing them to acquire up to 50% of building permits for a subdivision.
Four months after the authorization of this program, the number of private housing units authorized by building permits for the state of Florida had hit its highest point since March of 2023. As a result, the Florida market is beginning to cool, prices are beginning to drop, and buyers are gaining the upper hand.
This is the roadmap for defeating the housing crisis and for sustaining healthy statewide growth for years to come. Removing excessive red tape from North Carolina homebuilding is essential. With expedited permits for single-family housing developments, the market will be able to self-regulate without government delays. When demand falls, prices will drop, and building will slow. And when demand builds back up, the industry will be able to meet that demand more expediently. This will stabilize the market, preventing price fluctuations.
Senate Bill 205 takes major steps to fix this problem, establishing pro-development zoning reform, legal recourse, and reducing local bureaucracy. However, if we want our state to be prosperous in the long term, we need to balance our apartment and housing markets and push for specific expedited permits for single-family housing developments.
