Supporting Accessory Dwelling Units (ADUs) in North Carolina

Overview:

As the housing crisis worsens across North Carolina, local regulations are standing in the way of building more housing choices and options. This session, the Legislature has a crucial opportunity to allow more homes by expanding property rights so owners can build Accessory Dwelling Units (ADUs) on their lots. Allowing ADUs provides more types of homes at a greater range of prices without substantial changes to neighborhood character. This legislation can help address housing affordability challenges while promoting property rights and economic opportunity for owners and renters alike.

Accessory dwelling units can take many forms - whether they are built above a garage, as a stand-alone, backyard cottage, or internal to the house.  Regardless of the type, they provide an additional housing option for an older adult to live near family, or an opportunity for extra rental income to help meet the mortgage payment. 

Key provisions of legislation to advance Accessory Dwelling Units

Legislation in 2025 will include several key provisions that facilitate the permitting and development of ADUs:

• Mandatory Allowance: The bill requires local governments to allow owners of single-family homes to build and rent out at least one ADU on their property. This expands property rights and helps address North Carolina’s housing shortage.

• Regulatory Relief: ADU development under this legislation is exempt from certain regulations that impede construction, including bans on using ADUs or their primary residences as rental housing, onerous parking mandates, unnecessary duplicative utility hookups, and complicated approval processes. These exemptions streamline the ADU permitting process and remove unnecessary barriers that undermine ADU construction.

• Fee Limitations: Legislation will restrict fees for ADUs to the cost of a building permit for a single family home in the jurisdiction. By capping fees at this level, the legislation ensures that ADU development remains financially feasible for property owners, encouraging the creation of new homes.

• Regulatory Flexibility: While local governments can still regulate ADUs under existing laws, the legislation stipulates that such regulations must not discourage ADU development through unreasonable costs or delays. This provision allows for oversight and prevents a local government from standing in the way of building new homes.

Urgency of Action

The housing crisis in North Carolina requires immediate action to expand housing options and improve affordability. The Legislature should allow accessory dwelling units as they provide a practical solution to address these challenges by prioritizing property rights and limiting unnecessary government intervention in housing decisions. 

By empowering property owners to use their land for ADU development, this legislation promotes economic self-sufficiency, increases housing options, and fosters community development. North Carolina can leverage existing residential properties to create new housing units, meeting the growing demand for more housing options.

The North Carolina Housing Table urges lawmakers to support legislation advancing this session to allow accessory dwelling units, and adopt policies that promote more homes while respecting property rights. By implementing these reforms, North Carolina can enhance housing accessibility, stimulate economic growth, and support the well-being of its residents.