The NC zoning law no one saw coming (including many who voted for it)
I’m Brian Gordon, tech reporter for The News & Observer, and this is Open Source, a weekly newsletter on business, labor and technology in North Carolina.
Senate Bill 382 was controversial well before its second-to-last page. North Carolina Republicans passed this legislation in late 2024 over the veto of then-Gov. Roy Cooper, who called it “a sham.”
It directed $227 million to post-Hurricane Helene disaster relief but was most significant for stripping power from the executive branch, which Democrats have more often controlled. The bill shifted the authority to appoint State Board of Elections members from the governor to the Republican state auditor, who subsequently flipped the political composition of all 100 county election boards. It also sought to limit incoming Attorney General Jeff Jackson, a Democrat, from filing lawsuits that went against the will of the Republican-run General Assembly.
SB382 was drafted in secret and fast-tracked, N&O political reporters wrote at the time, without committee hearings. House debates on the bill began within an hour of it being made public.
It therefore isn’t outlandish to think some lawmakers who voted for this overall law didn’t fully consider the rather esoteric zoning provision tucked into Page 131 of 132. What has happened since only supports this theory.
“Clearly, it was something that was kind of written in by someone who’s like, ‘Hey, let’s try this,’” said Salim Furth, a senior research fellow at George Mason University’s Mercatus Center. “And it got through.”
The provision in question restricts municipalities from initiating downzonings, like reducing the density or number of uses of a property, without getting written permission from all affected owners. It also broadened the definition of downzoning in nonresidential areas to any policy that creates “nonconformity.” For example, if a building characteristic (like blue exteriors) or building use (like a data center) is currently permitted in a zone, new regulations can’t limit future blue buildings or data centers in that area while grandfathering in existing ones — unless property owners agree.
Grassroot groups aren’t organizing across North Carolina to combat an influx of blue buildings. But they certainly are for data centers. And the downzoning restriction has already complicated some local governments’ ability to regulate them.
Furth, to be clear, is a free-market advocate who believes property owners should have more say over zoning. He co-authored a piece applauding the SB382 zoning change shortly after it passed. But he now thinks North Carolina’s new downzoning restriction — which he called the nation’s strictest — goes too far in taking authority away from local governments. Mayors and county commissioners statewide agree.
The implications of the downzoning restriction extend beyond data centers. In Moore County, the town of Southern Pines stopped amending its unified development ordinance due to the new law. “It’s overly restrictive on zoning,” Taylor Clement, the town mayor, told me this week. Southern Pines isn’t alone.
“Important planning initiatives in cities and towns big and small across our state have come to a screeching halt,” Durham council member Nate Baker wrote in a statement Thursday. The next day, the Durham city council and county board of commissioners canceled an upcoming public meeting to address its development ordinance, blaming the state zoning law.
Can the zoning limit be lifted? And how did it get into SB382?
Perhaps realizing the severity of the zoning change they had approved five months earlier, North Carolina Senate Republicans sponsored a bill in May that would return downzoning authorities to local governments. The Senate approved it unanimously. The bill then moved to the House, which has it in committee. The General Assembly is expected to convene for its short session in April.
Many municipal leaders expect the zoning restriction will ultimately be relaxed, in part because they can’t imagine managing their communities if it remains.
But it does raise the question: How did the change get into SB382 in the first place?
Some point to the North Carolina Home Builders Association as a powerful lobbying force, but the law specifically adjusted zoning nonconformities in nonresidential areas. And the North Carolina Home Builders Association told me it “played no role in developing or advocating for the down-zoning provision”. There are other theories, which I’ll share with you if I ever get them substantiated.
For now, I have an email statement from Demi Dowdy, spokesperson for Republican House Speaker Destin Hall, who said the zoning provision was negotiated under former-House Speaker Tim Moore, also a Republican.
“Our understanding is this legislation was enacted in response to abuses of downzoning authority by local governments,” Dowdy wrote. “This legislation hasn’t been examined by a House committee yet, but the Speaker believes any reform to this provision must protect the rights of property owners.”
Clearing my cache
- Lowe’s will lay off more than 200 workers in the Charlotte area, including at the home improvement corporation’s Mooresville headquarters, as part of broader job reductions. The North Carolina company said the cuts won’t impact in-store workers.
- Siemens is launching a new career-training program called Careers Electric, which it expects will ready 25,000 North Carolina residents for careers in energy and infrastructure over the next decade.
National Tech Happenings
- After the Ring Super Bowl commercial featuring a lost dog sparked fierce privacy concerns, the Amazon-owned company has ended its collaboration with the surveillance tech firm Flock Safety.
- AI hiring humans: The new, viral site RentAHuman connects people to paid gigs on behalf of artificial intelligence bots. Tasks include singing, giving feedback, and holding signs at events. “ai can’t touch grass,” the website states. “you can. get paid when agents need someone in the real world.”
- Meta CEO Mark Zuckerberg answered questions in a landmark case over youth social media addiction. The outcome of this jury trial in Los Angeles could set a precedent for thousands of other social media charges filed against Big Tech companies.
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This story was originally published February 20, 2026 at 9:49 AM with the headline "The NC zoning law no one saw coming (including many who voted for it)."
