AN ACT to provide affordable housing options by allowing for the siting of small housing in areas zoned for residential use.

The General Assembly of North Carolina enacts:

SECTION 1.  Article 7 of Chapter 160D of the General Statutes is amended by adding a new section to read:

§ 160D‑707.  Small housing in residential areas.

(a)        Definitions. – As used in this section, the term small housing means a detached single‑family dwelling unit that is no greater than 800 square feet, built to standards applicable to the North Carolina Residential Code for One‑ and Two‑Family Dwellings, and is either constructed or mounted on a foundation and is connected to utilities. The term also includes tiny house, cottage home, accessory dwelling unit, or similar residential structure. The term does not include a recreational vehicle or manufactured home that has not been affixed to real property.

(b)        Small Housing in Residential Zones. – A local government shall allow small housing in areas zoned for residential or mixed‑use residential, including those that allow for the development of detached single‑family dwellings.

(c)        Regulation and Scope. – Nothing in this section affects the validity or enforceability of private covenants or other contractual agreements among property owners relating to dwelling type restrictions. Any regulation adopted pursuant to this section shall not apply to an area designated as a local historic district (i) pursuant to Part 4 of Article 9 of this Chapter or (ii) on the National Register of Historic Places, unless approved by the local historic preservation authority. A local government shall allow for attachment to existing water and sewer systems and shall not require additional fees, meters, or approvals for connection. For septic systems, a local government may require a new system or an upgrade to an existing system if it is determined that the existing system is incapable of handling extra capacity.

SECTION 2.  This act is effective when it becomes law.