Developers of residential properties that are subject to North Carolina’s Coastal Area Management Act (CAMA) could find it easier to obtain insurance and rebuild after changes to the rule were proposed last week, according to local real estate authorities.
The change adopted by the Coastal Resources Commission will allow developers to include larger residential properties such as condominiums along with single-family homes and duplexes in CAMA rules that govern how structures can be rebuilt after damage. The CRC will conduct public hearings and go through the full rule making process before voting on the proposed changes, said Michele Walker, North Carolina Department of Environmental Quality spokeswoman.
The rules had allowed single-family homes and duplexes larger than 5,000 square feet that were built before current land-development regulations were enacted to be grandfathered in and be rebuilt to their previous development plans if the structures suffered greater than 50 percent damage.
But multi-unit residential structures weren’t part of the grandfather rules, said Shane Johnson, chief operating officer of the Wilmington Regional Association of Realtors (WRAR).
The WRAR, with the support of the North Carolina Association of Realtors, led a two-year effort to change the rules. The fight concluded last week when the CRC changed the rules to read “residential structures” instead of “single-family or duplex,” Johnson said.
The changes will have the greatest impact on insurance, Johnson said. The previous rules left many residential structures defined as “legal nonconforming,” which served as a red flag for insurance carriers, warning them that any rebuilding would likely come with greater costs.
“Those rules made it almost impossible for some residential structures to get financing,” Johnson said. “They were almost uninsurable.”
Additionally, the way the rules were applied, any larger, multifamily structure that was part of a homeowners association that wasn’t in compliance would subsequently take all properties in the HOA out of compliance, Johnson said.
“Every other property in the HOA would be tainted with the negative nonconforming label,” he said. “Ultimately, this is an issue of fairness.”
CAMA rules were enacted by the state to help protect coastal areas from overdevelopment and safeguard against erosion. The rules cover 20 North Carolina counties, including New Hanover. They include rules that require structures be placed back a certain distance from dunes and other setback requirements to give space to the oceanfront.
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