Chapter 160D and Other Zoning Legislation

The General Assembly has enacted significant legislation affecting planning and development regulations in North Carolina. A newly released legislative bulletin summarizes the changes already enacted. The most significant land use legislation is the adoption of Chapter 160D, a new chapter of the General Statutes that consolidates the prior city- and county-enabling authority and implements a range of consensus clarifications and reforms. These changes will require updates to all local government development regulations by 2021. Chapter 160D legislation will be summarized in a forthcoming book and other resources, as well as covered in upcoming trainings. Read more »

Regulation of Short-Term Rentals and the Effect of S.L. 2019-73

Chris McLaughlin and I are excited to announce that our publication Regulation and Taxation of Short-Term Rentals is available for purchase through the SOG website. This publication is aimed at helping local governments decide how to address the growing issue of short-term rentals by analyzing the legal and practical aspects of local government regulation and taxation and by offering advice on best practices for regulation.

In addition, on January 9, 2020, we are offering a 1-day course that covers the basics of short-term rental regulation and the occupancy tax. You can register for the course here.

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Can Counties and Cities Close Roads During an Emergency?

Counties and cities are vested with broad authority to impose restrictions and prohibitions during a locally declared state of emergency (GS 166A-19.31; for more information on local state of emergency declarations, see this blog post). These restrictions and prohibitions must be included in county and city local emergency ordinances (for more discussion on the restrictions and prohibitions which may be authorized under a local emergency ordinance, see this blog post). Among the restrictions and prohibitions that may be included in a local emergency ordinance, and which may be triggered under a local state of emergency declaration, is placing limitations on “the movement of people in public places,” which includes imposing curfews, ordering evacuations, prescribing evacuation routes, and controlling ingress, egress, and movement within an emergency area (GS 166A-19.31(b)(1)). Does this authority extend to closing roads? Recent legislation enacted by the North Carolina General Assembly clarifies that the answer to this question is yes.

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Ordinance Report Requirement – Round Two

Last year the General Assembly enacted Session Law 2018-69 (An Act to Assist the Criminal Law Recodification Working Group).  The Act directed the State’s counties, municipalities, and metropolitan sewerage districts to submit lists of their criminally enforceable ordinances to two joint legislative committees by 1 December 2018. It further directed every reporting jurisdiction to include a description of the conduct prohibited by each ordinance.  I wrote about the Act in the blog post available here.

Earlier this month the General Assembly enacted legislation that (1) extends the ordinance list deadline to 1 November 2019 and (2) exempts some counties and municipalities from the reporting requirement.  S.L. 2019-198.  The legislation also imposes a consequence on non-exempt local government units that fail to meet the new deadline.

This blog post answers questions raised by the legislation amending the Act. Read more »

Gentrification and Property Tax Relief

Downtown Durham is hot.  Millions of square feet of new and renovated residential and commercial properties hit the market this year, including luxury condos atop the city’s new tallest building. By mid-2020, the number of downtown apartments will have more than doubled and downtown hotel rooms will have more than tripled since 2016.

Further proof of downtown Durham’s resurgence is found in the county’s 2019 property tax reappraisal. Real property tax values in the city rose more than 20%, with some downtown neighborhoods seeing increases as high as 60%. That growth is on top of the 12% increase produced by the county’s 2016 reappraisal.

Charlotte is experiencing a similarly strong real estate market.  Real property values increased an average of 53% after Mecklenburg County’s 2019 reappraisal, its first since 2011.  A large number of properties in downtown Charlotte saw their tax appraisals more than double this year.

While these increases are good news for the cities’ financial coffers, they may be problematic for some long-time downtown homeowners.  Lower-income residents of the neighborhoods that are experiencing gentrification and rising property values could find it difficult to keep up with their rising tax bills.     Read more »

New Law Modifies Construction Indemnification and Prohibits Duty-to-Defend in Design Professional Contracts

For those not familiar with Chapter 22B of the North Carolina General Statutes, this Chapter prohibits certain contract provisions by making those provisions void and unenforceable as a matter of public policy. The restrictions in Chapter 22B apply to all contracts, including those with a governmental entity as well as those between private parties. Within Chapter 22B is a statute that prohibits what can be described as “self-indemnification” in construction contracts. GS 22B-1 prohibits any provision in a construction contract that requires one party to indemnify another party against the other party’s negligence. Simply put, this means that a contractor cannot require a local government to indemnify the contractor, for the contractor’s own negligence and vice versa. This does not mean that the local government cannot require the contractor to indemnify it for the contractor’s negligence and vice versa, which can be described as “cross-indemnification” (as opposed to self-indemnification). Cross-indemnification provisions are permissible and common in contracts, including those entered into by local governments.

GS 22B-1 was amended by House Bill 871 (S.L. 2019-92) to add five new subsections (b)-(f) that (1) revise the scope of cross-indemnification provisions in construction and design services contracts; (2) prohibit duty-to-defend provisions in design services contracts; (3) preserve certain indemnification obligations; (4) exempt certain agreements from the requirements of the statute; and (5) define terms used in the statute. These changes became effective August 1, 2019, and apply to all contracts entered into, amended, or renewed on or after that date. This blog post describes these new statutory provisions.

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Interest(ing) Questions

Pardon the pun, but I couldn’t resist that title for a blog post on the subject of property tax interest.  Usually when we think of interest we think of the additional amount owed by taxpayers who fail to pay their taxes by January 6, the delinquency date. But today I’m writing about interest that might be owed by a local government to a taxpayer on a refund.

Confusingly, there is no one firm interest rate that applies to all property tax refunds.  Some refunds accrue 10% interest per year, some 5% per year, and some must not accrue any interest at all.  Here are the details: Read more »