North Carolina’s SB 518 Housing Reform Bill

 

The North Carolina Mobile Home Park Act, introduced in March 2025, proposes major reforms to restructure housing manufacturing statewide. It aims to balance investor priorities with residents’ housing needs amid rising demand for affordable housing.

 

The Mobile Home Act reforms park oversight, offering tenants stronger protections while clarifying responsibilities for landlords and park owners.

 

All mobile home parks will need to register with the North Carolina Human Rights Commission. Noncompliant parks or those violating health and safety codes face penalties and risk losing the ability to raise rents. Landlords will also be required to give tenants at least 60 days’ written notice before any rent increase.

 

A key provision for tenant protection is the right of first refusal, allowing residents or associations to buy the park before outside buyers. This shift empowers residents with the option to take ownership and a real stake in their housing future.

 

Outside of ownership rights, tenants will have enhanced legal protections, which will tighten the standards and grounds for challenging unjust evictions. Landlords must clearly define renewal rights, lease terms, and tenant responsibilities in every lease agreement.

 

The proposed regulated landscape creates a new standard of operational accountability. Owners must comply with health, safety, and registration rules to maintain rent flexibility and continue operating without restrictions. Adhering to new standards limits rent growth, impacting value-add investment strategies under SB 518. If a park fails to comply, the state caps rent increases and imposes operational restrictions and delays tied to notice requirements. The bill adds friction to asset performance and exits by capping rent, altering underwriting, and enabling tenant purchase rights.

 

Backed by tenant advocates and housing groups, the bill is scheduled to take effect in early 2026. A phase-in period allows park owners time to meet legal changes and gives residents time to prepare for ownership opportunities. Landlord and investor groups push back, claiming the restrictions discourage private investment amid market uncertainty.

 

Investors who understand the implications must adapt accordingly in order to remain above water in a new age of housing. Policymakers should avoid limiting investment that plays a key role in preserving and expanding affordable housing across North Carolina.

 

“As someone working closely with both owners and investors, I believe it’s critical for policymakers to strike a balance that protects residents while also encouraging the private investment needed to maintain and grow affordable housing stock. Otherwise, we risk creating a regulatory environment that discourages the very partnerships needed to solve our housing challenges.”

 

– Arthur Varela