If passed, HB 488 will increase the cost of homeowners insurance, threaten public safety, and limit federal grant opportunities. Now, officials are asking to reverse the building code ban.
HB 488 Poses Certain Risks
Public officials are urging the repeal of a state ban on building code updates before the hurricane season. They argue that the current policy jeopardizes public safety, reduces federal grant funding, and raises homeowner insurance costs.
Governor Roy Cooper vetoed HB 488, a bill that delays proposed energy efficiency updates for residential homes until 2031. However, the General Assembly overrode his veto last August. Now, Cooper says the negative effects of this decision are becoming evident.
“Legislative Republicans moved North Carolina backward by recklessly blocking new building codes that would require new homes to be more resilient and efficient,” Cooper said in a Thursday press release. “As a result, it will become harder to find home insurance, and we’re missing out on tens of millions of dollars in federal recovery funds. That’s a lose-lose for our state, particularly when storms hit.”
The governor’s office claims the bill has disqualified North Carolina from federal grants, including an Inflation Reduction Act program to help states update their building codes.
Homeowners Insurance Concerns
In 2023, North Carolina received $102 million in federal funding from FEMA’s Building Resilient Infrastructure and Communities program. The state is expected to receive around $30 million in 2024. The governor’s office stated that this figure will continue to decline because the state can no longer meet FEMA’s residential code requirements.
Insurance Commissioner Mike Causey also voiced concerns about the bill’s impact on homeowner insurance rates.
“If it’s not immediate, it will be soon,” he told Port City Daily. “And it will impact the entire state, not just the coastal areas.”
Earlier this year, the North Carolina Rate Bureau, representing the state’s insurance industry, cited storm risk and climate change in requesting an insurance rate hike of up to 99% for coastal areas. Causey rejected this proposal and plans to negotiate it in court this October.
An April 2024 report by the Insurance Institute for Business & Home Safety identified North Carolina’s new restrictions on building code updates as “the most concerning negative action” among 18 hurricane-prone states assessed since 2021.
Causey believes North Carolina should take measures similar to Alabama, which implemented a building code-mandated fortified roof program to address the threat of major storms and rising insurance rates. HB 488, however, includes a provision that bans local governments from requiring roof sheathing inspections unless exposed to winds over 140 miles per hour.
“A few years ago, we were on the right track,” Causey said. But, for whatever reason, over the last two or three years, we’ve slipped down in building codes standings.”
Federal Grant Limitations
The North Carolina Fire Marshals’ Association and the State Firefighters Association also warned that HB 488 would hinder North Carolina’s ability to recover from natural disasters and limit federal grants to fire departments.
“Anytime you weaken codes instead of strengthening them, the fire service gets concerned,” Causey told PCD. “They’ve seen it too many times.”
The Department of Insurance had overseen the Fire Marshals’ Association for 80 years until the General Assembly made it an independent agency last year. Causey said he was “blindsided” by this initiative and did not understand lawmakers’ motives.
“Nobody’s ever told me why,” he said. “Nobody’s ever discussed it with me.”
HB 488 also stripped authority from the governor-appointed Building Code Council, which had approved new proposed efficiency standards after two years of study. The law allowed for the creation of a separate legal body to determine residential code updates after the moratorium. 2026 the General Assembly will appoint six of the Residential Code Council’s 13 members.
The North Carolina Fire Marshals’ Association urged everyone to consider the consequences of a second building code reform bill, SB 166, which Cooper vetoed earlier this month. The North Carolina Home Builders Association (NCHBA), the main lobbyist behind HB 488 last year, has designated it as the top legislative priority for 2024.
“Proposed changes in SB 166 give way to a disturbing trend where code protections are being mandated in general statutes by legislators who lack the expertise in these areas,” the fire marshals wrote.
One of the group’s concerns is a proposed reorganization of the Building Code Council that would remove expert positions, including architects and fire code officials. It would shift the 17-member governor-appointed body to 13 members, six of whom would be appointed by the General Assembly.
“When things like this come up, we need the legislators to listen to all sides,” Causey said. “They certainly need to listen to the fire chiefs and fire marshals around the state and the insurance industry, in addition to the home builders. But my fear is they don’t listen to all sides.”
Lobbyists Wrote the Bill
Emails obtained by the Energy and Policy Institute reveal that the NCHBA wrote the 2023 bill with Rep. Mark Brody (R-Anson) and legislative aides. The General Assembly exempted themselves from public records requests later that year.
Brody, a member of the NCHBA, owns Clayton Ryan Homes LLC, and chairs the Local Government Land Use, Planning, and Development Committee. He donated $1,000 to NCHBA in 2022 and has received $28,750 in campaign contributions from its PAC throughout his career.
“He has served as the sponsor for NCHBA’s Building Code Regulatory Reform bills,” NCHBA wrote in a 2021 blog post. “Thank you, Representative Mark Brody, for your dedication!”
On Saturday, NCHBA executive vice president Tim Minton told PCD that NCHBA supported building code updates to promote safety in HB 488 but advocated delaying proposed energy efficiency updates to maintain housing affordability.
“The energy code updates were going to increase the cost of the average home in North Carolina by over $20,000 while only achieving a maximum of $400 per year in energy savings,” he said.
Minton also stated that SB 166 would still include fire representatives on the new residential and commercial building code councils. He said the NC Fire Marshal’s Office spoke in favor of the bill as it progressed through the legislature; PCD reached out to the NCFMA to ask if their views had changed since raising concerns in May but did not receive a response by press time.
Minton addressed concerns regarding Brody’s membership in a lobbying organization and co-writing legislation with that group on their behalf. He said lobbyists traditionally work with elected officials on legislation and amendments but did not confirm if the NCHBA wrote SB 166 or other recent legislation.
“Representative Brody always works with full transparency in being a housing expert and it takes 170 members of the legislature to determine if a policy recommendation is good for North Carolina,” he said. “Representative Brody should be applauded for his efforts to help keep housing affordable.”
He attributed the state’s decrease in FEMA grants to a broader decline in national FEMA spending rather than HB 488, which he argued did not negatively impact safety, grant opportunities, or insurance rates.
Cooper, Causey, and groups including the North Carolina Sustainable Energy Association (NCSEA) countered this argument. NCSEA cited a National Renewable Energy Laboratory study showing inefficient buildings drive up electricity bills and carbon emissions. The group also noted a 2022 Department of Energy study finding that the proposed update by the North Carolina Building Code Council would have added around $5,000 to the cost of a home but save $400 in annual energy bills.
Profit as a Motive
Natural Resources Defense Council attorney Joel Scata argued NCHBA’s real motive is profit.
“Affordable homes shouldn’t mean something that’s built cheaply in an unsafe location,” he told PCD last month. “Affordable homes really should be homes that someone can live in long-term without having to worry about repeatedly being damaged because they were set up poorly.”
According to Secretary of State records, NCHBA spent $346,458 lobbying in 2023. Local lawmakers who voted for the building code reform bills have also received significant donations from NCHBA, including:
– Sen. Bill Rabon (R-Brunswick) — $42,300
– Sen. Brent Jackson (R-Pender) — $24,900
– Sen. Michael Lee (R-New Hanover) — $14,400
– Rep. Charles Miller (R-Brunswick) — $2,625
– Rep. Carson Smith (R-Pender) — $2,600
– Rep. Frank Iler (R-Brunswick) — $7,500
– Rep. Ted Davis Jr. (R-New Hanover) — $9,825
Rep. Deb Butler (R-New Hanover) criticized NCHBA’s building code agenda and argued it particularly damaged coastal communities like Wilmington.
Butler cited industry support for HB 819, a 2012 bill that banned state agencies from using sea-level rise data in coastal development policy until 2016. Minton could not confirm if NCHBA supported the bill since he did not work at the organization at the time, but he said he could not find NCHBA policy papers related to HB 819 from 2012, which usually indicates the group did not take a position.
NC-20, the now-dissolved lobby group behind the legislation, included several members of NCHBA chapter organizations. Wilmington-Cape Fear Home Builders Association staff members Cameron Moore and Tyler Newman are former lobbyists for NC-20.
