Backyard Housing in the Tar Heel State: What North Carolina’s HB 627 Could Mean for ADUs and Housing Access

Accessory Dwelling Units, or ADUs, have steadily gained attention across the country as cities and states search for ways to increase housing supply without radically transforming the character of established neighborhoods. From California to Maine, state legislatures are stepping in to override local zoning codes that often restrict these modest, secondary homes. Now, North Carolina is joining the national conversation in a serious way.

House Bill 627 (HB 627), introduced in the 2025–2026 legislative session, is one of the most ambitious ADU bills ever seen in the state. It doesn’t just encourage ADUs — it would require every local government in North Carolina to allow them in single-family residential zones, overriding a patchwork of restrictive local rules that currently keep backyard housing off the table for many property owners.

Let’s break down what HB 627 does, what it means for homeowners, renters, and local governments, and why this bill could become a major turning point in how North Carolina grows its housing stock.

What Is HB 627?

North Carolina House Bill 627 is a proposed law that would require local governments across the state to permit the development of at least one ADU — attached or detached — on any lot zoned for single-family detached housing.

At its core, this bill is about streamlining and standardizing access to backyard housing. Currently, many towns and cities in North Carolina either don’t allow ADUs at all or impose significant barriers that discourage their construction. HB 627 aims to change that by setting clear, statewide rules and stripping away layers of red tape.

The Key Provisions of HB 627

The bill is structured around two major ideas: (1) removing barriers that prevent homeowners from building ADUs, and (2) ensuring that cities can still enforce basic standards around safety, design, and infrastructure. Here’s how that balance plays out:

1. ADUs Must Be Allowed on All Single-Family Residential Lots

If a local zoning ordinance permits a single-family detached home, that lot must also be allowed to host at least one ADU. That includes:

• Detached ADUs (a separate structure in the backyard),
• Attached ADUs (like basement apartments or additions), and
• Converted existing space (like a garage or attic).

This applies across the board — from Charlotte and Raleigh to small towns and unincorporated areas.

2. Limits on Local Regulations

HB 627 takes aim at some of the most common restrictions that have historically blocked ADU development:

• No conditional zoning required. Localities cannot force ADUs into a special review process or require rezoning.
• No parking mandates. Cities can’t require additional off-street parking for an ADU.
• No excessive size limits. Cities can’t set a maximum unit size below 800 square feet.
• No high fees. Cities may not charge higher impact or utility fees than what would be required for a single-family home.
• No utility roadblocks. If a property already has capacity, the ADU can be connected to water, sewer, and electricity without major hurdles.
• No rental restrictions. Long-term rentals in ADUs cannot be prohibited outright.

These provisions represent a serious effort to lower the cost, uncertainty, and delay often involved in building a small housing unit.

3. What Cities Can Still Regulate

HB 627 doesn’t completely handcuff local governments. Municipalities would retain the ability to impose:

• Setbacks of 10 feet or whatever is required in the zone (whichever is less),
• Rules on ADU placement, such as keeping them in the side or rear yard,
• Relative size limits, ensuring the ADU is smaller than the primary house.

That means cities can still maintain a degree of control over design and neighborhood character — but they can’t block ADUs outright or make them so difficult to build that they’re functionally impossible.

4. Exemptions

Some areas would be exempt from the bill, including:

• Properties in historic districts,
• National Historic Landmarks,
• Lots not connected to public water and sewer,
• Private covenants or HOA restrictions.

This means some parts of the state, especially in historic neighborhoods or rural areas with septic systems, may not be fully affected by the law.

5. Timeline

• Local governments must adopt compliant ADU rules by January 1, 2027.
• Starting October 1, 2025, ADUs will be permitted by state law regardless of local codes.

Why HB 627 Matters

North Carolina is experiencing a housing shortage that’s pricing out residents in cities and towns alike. Rents are rising, home prices have surged, and new construction can’t keep up. But unlike large apartment projects that often draw pushback, ADUs offer a way to add gentle density — one home at a time — on lots that already have infrastructure and housing.

HB 627 could unlock thousands of new housing opportunities by:

• Allowing aging homeowners to build a rental unit for income or to house a caregiver,
• Helping young families afford a home by offsetting mortgage costs with ADU rent,
• Giving multi-generational households the ability to live together while preserving privacy,
• Providing low-impact rentals in neighborhoods close to schools, transit, and jobs.

By preempting local bans and standardizing approval across the state, the bill removes guesswork and complexity. It makes backyard housing something homeowners can actually plan around.

Local Pushback and the Debate Ahead

As expected, HB 627 is drawing both praise and criticism.

Supporters see it as a pragmatic, homeowner-focused solution to the housing crunch. ADUs are less expensive to build than new single-family homes, require no new land, and tend to rent for below-market rates. And since they’re usually built by homeowners—not developers—they offer a grassroots path to expanding supply.

Critics, especially from local governments and homeowner groups, argue that the bill undermines local control and imposes a one-size-fits-all approach. They raise concerns about infrastructure strain, neighborhood compatibility, and the potential loss of parking or green space.

But the political winds are shifting. Legislators across the country are realizing that incremental zoning reform, like legalizing ADUs, is one of the few politically viable ways to address housing shortages without major public spending.

What Comes Next?

HB 627 is currently under consideration in the General Assembly. If it passes and becomes law, North Carolina would join a growing list of states—like California, Oregon, Washington, and Maine—that have legalized ADUs statewide.

Whether or not the bill passes in its current form, it’s clear that the conversation around backyard housing is accelerating. Cities like Asheville, Durham, and Wilmington have already begun adjusting local rules to allow ADUs. This bill would ensure the rest of the state catches up.

Final Thoughts: Small Homes, Big Potential

HB 627 may seem like a niche piece of legislation, but it has wide-reaching implications for housing in North Carolina. ADUs aren’t a silver bullet, but they are one of the few solutions that can be implemented quickly, affordably, and with broad benefit.

For homeowners, they represent flexibility and opportunity. For renters, they offer new access to high-opportunity neighborhoods. And for cities, they provide a way to grow without sprawl.

As the state considers this bold move, one thing is clear: the future of housing in North Carolina might just be built in the backyard.

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