Granny-flat bill stokes power struggle over zoning between state and NC cities

Republicans in the North Carolina Senate next week are expected to advance a bill that would make it easier for homeowners to build backyard cottages and other small secondary homes — a move that is stoking debate over whether the state should have power over local zoning.  

Senate Bill 445, a bill that seeks changes to a wide variety of regulations, combines dozens of policy changes affecting housing, permitting and state regulatory authority, with a central focus on shifting control of certain land-use decisions from local governments to the state.

Supporters say the bill reduces red tape that can slow development and drive up the cost of housing. Local governments and advocacy groups say it strips municipalities of key tools used to manage growth.

In recent years, GOP lawmakers have advanced proposals to standardize housing and development rules statewide, arguing that a patchwork of local regulations has contributed to rising costs, slowed construction, and a spike in property tax reevaluations. That effort has increasingly focused on reducing cities’ authority over density limits, land use and building approvals.

Local government leaders say those decisions are essential to managing growth, transportation needs and community services. They warn that state mandates could force rapid changes without local infrastructure planning.

Local governments typically write the zoning and planning rules that determine what property owners are allowed to build throughout the jurisdiction. The rules typically guide things such as the height and density of buildings, setbacks and how much of a lot can be built upon. It’s an effort to manage things such as environmental impact, infrastructure needs, noise and traffic concerns. 

The bill would require cities with at least 50,000 residents to allow homeowners to build accessory dwelling units, or ADUs — often known as “granny flats.” Structures can include things such as garage apartments or backyard cottages on residential lots.

Under the bill, local governments would be allowed to regulate size and design but wouldn’t be allowed to prohibit ADUs in qualifying areas.

Senate leader Phil Berger, R-Rockingham, told reporters that he favors more flexibility in zoning, including in areas currently restricted by local rules.

“I’m generally in favor of us opening up the ability of people to utilize existing properties for additional housing,” Berger said. “The idea of allowing folks to have accessory dwelling units on their property is something that should be encouraged, not discouraged.”

Local government groups say those decisions are best left to cities and towns that have to manage the impacts of growth.

“Every community is different,” said Erin Wynia, legislative counsel for the North Carolina League of Municipalities. “Local governments want the authority to develop in a way that works best for their communities.”

Wynia said zoning decisions often involve balancing competing land uses and infrastructure needs, including traffic, parking, water and sewer capacity, and emergency services.

Democratic state Sen. Sydney Batch said urban and rural communities face housing shortages, and she argued that policymakers must balance affordability with local concerns about growth.

Batch said she is generally in support of ADUs, but is opposed to taking zoning power away from local governments — a scenario that she said could create additional affordability problems. 

ADUs could increase the value of a home, in turn causing property values to rise. That would mean bigger tax bills for some homeowners and possibly put a class of properties out of reach for some buyers. 

“We have to start pushing back on the narrative that density automatically lowers value,” Batch said.

The measure also reduces local government control over long-term planning decisions by extending development "vesting" protections from two years to five years in some cases.

That change would allow developers to move forward under existing zoning and regulatory rules even if cities update land-use policies in response to growth, infrastructure strain or community concerns.

“We have concerns about the ability for local governments to enforce current laws and respond to changes in development patterns in a timely way,” Wynia said.

Local governments say the provision weakens their ability to respond to rapid population growth, changing infrastructure needs and neighborhood impacts over time.

Housing affordability has become a major focus of the 2026 legislative session, with lawmakers from both major parties advancing approaches to increase supply and reduce development barriers.

Gov. Josh Stein has also called for a statewide housing strategy, warning that demand continues to outpace construction and that middle-income workers are increasingly priced out in many communities.

Republican lawmakers have advanced additional housing-related measures aimed at limiting local zoning authority and encouraging higher-density development, including proposals to expand accessory dwelling units statewide and reduce municipal restrictions on smaller housing types.

That includes House Bill 1042, which would change tax treatment for certain affordable housing projects, and House Bill 1192, the “Energy and Housing Affordability Act,” which focuses on reducing development costs tied to energy and construction standards.

Democrats have also filed housing legislation that would loosen local zoning restrictions to allow more “missing middle” housing such as duplexes and townhomes.