Making the housing market meet demand

In a 2026 survey by the National Association of Realtors of 2,000 people in the 50 largest American metro areas, 89% said sidewalks and places to walk were important when deciding where to live, and 82% said the same for close access to shops and parks. About two thirds of all respondents were even willing to pay more for a “walkable” area. Other recent polls have similarly shown a strong desire for this kind of environment.

But if you’ve visited many of these urban regions of our country, including North Carolina’s growing Charlotte and Triangle metro areas, these high-demand “walkable” neighborhoods are in short supply. Building where the shops and sidewalks are is not as easy, so the homes are built farther and farther out.

In an article by Public Square, which highlighted the NAR survey, they also cited a recent survey of American neighborhoods showing, despite what they may want, only 11% of Americans live in a “very walkable” neighborhood. SafeStreets research of 220,000 census blocks across the country found that these walkable areas hold a 76% premium over similar non-walkable properties price-wise. So you would think builders would jump at the chance to build them.

It’s clear that, at least in the metro areas surveyed, which include suburban and exurban areas, many people would live in more walkable neighborhoods if they could. But they are often stuck further out in sprawl, without many amenities directly around them. Think of “sprawl” as what happens when you take that walkable neighborhood — with markets, parks, housing, churches, and offices all artfully weaved together — and forcefully segregate each use to its own zone, far away from the others. Each time you want to transition from one mode of life to another, like from the office to the market or home to church, you need to hop in the car and cross to a different zone. Now, if someone prefers this way, which about 11% of residents of metro areas do, according to the NAR survey, then they should be free to spend their time driving between far-flung areas.

But it appears most do not prefer that. And yet, that’s where they live. In a true market, if there is demand for something, and people are willing to even pay a premium for it, the supply of that good or service will rise to take advantage of that demand. But not only do we have a shortage of housing in North Carolina of 764,000 homes, we especially have a shortage of places to live in these urban areas, where amenities are more available and people are pouring in from out of state for jobs.

Whenever there is a clear market demand not being met, you can be assured that the government is interfering somehow. The homebuilders would be more than happy to build homes however people prefer, whether walkable, suburban sprawl, or rural. But there have been a lot of regulations preventing this.

Thankfully, North Carolina’s leaders have made major strides to make it easier to build in cities where people want to, but have been unable to, find affordable options.

One recent victory is the passing of the regulatory reform conference report by both chambers, which will also likely be signed by the governor. The bill has two provisions that will improve these dynamics.

For one, it will require cities with over 50,000 residents, outside coastal areas, to allow at least at least one accessory dwelling unit on property zoned for single-family homes, with some minor limitations. These “backyard cottages” can be rented out or used for space for family members or friends. This will bring many more units of rental housing onto the market in these areas.

It would also require cities of over 80,000 in counties of over 1 million to allow redevelopment of commercial or industrial properties into housing.

The ADU requirement would take effect Jan. 15, 2027. Affected cities would have until July 1, 2027, to adopt local regulations.

There have been many other provisions recently, some that made it into law, others that haven’t, to make building easier in cities without totally stripping away reasonable local control.

Another statute that could use a look along these lines is the 10-acre exemption from local planning regulations. It’s a great idea to have that exemption in statute, so farmers can subdivide and sell land without regulators complicating things. But it’s also led to sprawl and destruction of farmland, as farmers who don’t want to deal with planning boards chop up 80-acre farms into eight 10-acre “estate lots,” each with one house, a lot of grass to mow, and a really long driveway.

Allowing cluster development on these 10-acre parcels, or for them to be split into two or three-acre parcels without trigger the planning board, could open up a lot of buildable land around cities as well.

But North Carolina is focusing on the right problem — and appears to be slowly walking towards the right solutions.

“Making the housing market meet demand” was originally published on www.carolinajournal.com.