House Bill 626, titled the Housing Choice Act, would create a new set of municipal land-use strategies intended to encourage more housing production and make local governments eligible for priority consideration for certain water infrastructure funding. For smaller municipalities, the bill would allow or encourage policies such as by-right multifamily housing in residential districts, accessory dwelling units, fee waivers for low- and moderate-income housing, preservation programs for existing affordable housing, and first-time homebuyer education. For larger municipalities, it would tie priority consideration to additional housing-supply measures such as minimum density standards, elimination of parking requirements, duplexes and triplexes in single-family zones, transit-oriented multifamily development, height flexibility, and other affordability and housing-preservation tools.
The bill also amends the State’s water infrastructure priority statute, G.S. 159G-23, to add a new priority factor for municipalities that adopt specified housing-related land-use reforms. In practice, this means local governments that adopt a qualifying number of the bill’s housing policies could receive favorable consideration for loans or grants from the Wastewater Reserve or Drinking Water Reserve. The bill directs the State Water Infrastructure Authority to create a form for municipalities to document compliance and certify eligibility, and it limits municipalities to annual submissions based on new data or new policy adoption.
Beyond the funding-related changes, HB626 requires the Legislative Research Commission to study statewide housing needs, including methods for estimating regional housing demand, housing shortages, and the number of units needed through 2050. The study is to be conducted with municipalities, counties, and regional councils of government, and the LRC must report findings and any legislative proposals by the start of the 2026 Regular Session.
The bill’s impact on state law would be significant for local land-use regulation and infrastructure funding administration. It does not directly mandate that municipalities adopt the listed housing policies, but it creates a state incentive structure that links those policies to priority treatment for water and wastewater funding. It also expands the criteria the Division of Water Infrastructure must consider when evaluating reserve funding applications, and it adds a new administrative role for the State Water Infrastructure Authority in verifying municipal compliance.
The available context shows no recorded votes or committee debate, so there is no documented floor or committee sentiment to assess. Based on the bill text alone, the measure appears generally pro-housing and pro-development, with a strong emphasis on increasing housing supply, affordability, and local zoning flexibility. Potential points of contention are likely to include state influence over local zoning decisions, the use of water infrastructure funding as leverage for land-use reform, parking and density requirements, accessory dwelling units, and the extent to which municipalities should be encouraged or pressured to change zoning rules to qualify for state priority funding.
HB626 would amend Chapter 160D to add a new municipal land-use strategy framework and would revise G.S. 159G-23 to make adoption of specified housing policies a factor in priority consideration for Wastewater Reserve and Drinking Water Reserve funding. It would also require the State Water Infrastructure Authority to administer a compliance form and would direct the Legislative Research Commission to study statewide housing needs and report recommendations. The bill affects municipalities, the State Water Infrastructure Authority, the Division of Water Infrastructure, and applicants for state water infrastructure loans and grants.
No committee transcripts or votes are available, so there is no recorded legislative sentiment in the provided materials. The bill itself reflects a policy direction favoring housing supply expansion, affordability, and zoning reform, suggesting support from advocates of land-use liberalization and housing production. At the same time, the structure of the bill implies likely concern from local governments or zoning opponents who may view the measure as state pressure on municipal land-use authority.
The main points of contention are likely to be the bill’s use of state water and wastewater funding as an incentive for zoning changes, the degree of local control over land-use decisions, and the specific reforms encouraged by the bill. Likely disputed provisions include by-right multifamily housing in single-family areas, accessory dwelling units, minimum density standards, elimination of parking requirements, reduced height limits, and transit-oriented development allowances. The bill also creates different thresholds for smaller and larger municipalities, which may raise questions about fairness, feasibility, and whether the state should condition infrastructure funding on housing policy adoption.