After the North Carolina General Assembly overrode Governor Cooper’s veto of Senate Bill 382, which became Session Law 2024-57 (the “New Law”), we published a client alert describing the state-wide effect of the New Law.

With the General Assembly’s 2024 Session concluded, some interested parties hope the General Assembly might repeal or amend the New Law in 2025. But regardless of the General Assembly’s future action, the New Law controls today.

Our first alert detailed the new limitations imposed on local government zoning authority, highlighting that the New Law applies to all zoning laws adopted after June 14, 2024 (the “Effective Date”).

This alert identifies practical New Year Resolutions for local governments and property owners to consider making because of the New Law.

Resolutions for Local Governments

Because the New Law invalidates all “down-zonings” adopted after the Effective Date and a down-zoning is a law which (1) reduces density, (2) reduces the number of permitted uses, or (3) creates a nonconformity on non-residential property, local governments should consider the following:

1. Review and Categorize: Consider identifying zoning regulations adopted after the Effective Date and divide them into three categories:  (A) laws that are down-zoning under the New Law, (B) laws that might be down-zoning under the New Law, and (C) laws that are not down-zoning under the New Law.  For laws falling into category (A), the local government should direct staff to not enforce these laws at this time.  For regulations falling within category (B), the answer is uncertain, but enforcement of these regulations may trigger litigation, including claims for attorney fees and monetary claims.

Simple. Right? Of course not!

Note the Distinctions: Some local land use regulations are authorized by the General Assembly as zoning regulations and as local police authority regulations. For example, the General Assembly adopted statutes enabling local floodplain regulations and water supply watershed regulations.  

Authorized by the General Assembly (N.C.G.S. §160D-103), many local governments have simplified and unified local land use regulations for citizen convenience through adopting and codifying all land use regulations together in a unified development ordinance. The New Law applies to “zoning regulations,” but does the New Law apply to zoning regulations when such regulations are separately authorized by the General Assembly? The New Law does not expressly answer this question.

2. Consider Moratoria: While waiting (and perhaps hoping) for action by the General Assembly, development moves forward.  Under the New Law, the right to develop is vested as permitted on the Effective Date.  Can the General Assembly later modify this right?  The answer is beyond the scope of this alert.

But let’s assume the General Assembly has authority to remove or modify this right by new legislation.  For projects where an applicant has submitted an application for a development permit or approval after the Effective Date, the applicant secures a separate, independent vested right via the permit choice statutes.

Is there anything a local government can do to, perhaps, minimize vesting under the New Law by permit choice while the General Assembly might be considering changes to the New Law? Local governments may consider adopting a targeted moratorium on issuing development approvals to lessen obvious adverse impacts to public health and safety.  

The possible advantage of adopting a moratorium would be to stay processing of applications for development approvals and issuing development approvals. As N.C.G.S. § 160D-107 is worded, permit choice may only apply to complete applications submitted before the moratorium became effective.

When, specifically, might a moratorium be appropriate?  When a local government adopted new FEMA flood maps after the Effective Date.  Local governments do not create these federal government maps but do adopt them so their citizens may purchase federal flood insurance.  A moratorium provides “breathing room” for local governments to adopt standalone flood hazard regulations outside the reach of the New Law while awaiting clarifying action by the General Assembly.

But even a moratorium doesn’t provide breathing room for all development within newly identified flood prone areas. Local governments lack authority to adopt a moratorium on “development regulations governing residential uses.”  N.C.G.S. § 160D-107.

Therefore, local governments have many potential New Year Resolutions but none of them restore the status quo existing before the New Law.  

Resolutions for Property Owners and Developers

Local governments have many New Year Resolutions to consider, but for property owners and developers, New Year Resolutions are fewer and simpler: 

1. Verify Zoning Laws: Property owners have a vested right in the zoning laws existing on the Effective Date.  Like a contract, these laws establish specific rights.  While most times, an electronic copy of zoning regulations is available on local government websites, frequently they are not completely current. Property owners should consider seeking a certified copy from the local government of all land use laws existing on the Effective Date.  These are the terms of the property owners’ contract.

2. Expedite Development Plans: Property owners and developers who started designing a development and who like the terms of their contract should consider expediting their design and planning activity to submit a complete application and vest their development rights via permit choice.  This will provide certainty that they can move forward under the version of zoning regulations existing on the Effective Date. 

Like most significant changes in law, the New Law adds to the “to do” list for a New Year and the New Year brings potential for changes to the New Law.  Stay tuned.

Jordan Love contributed to this article