Senate committee hears bill to let owners rebuild nonconforming homes after major loss

Representative Ben Koppelman, sponsor of House Bill 1500, told the Senate Industry and Business Committee the bill is intended to ensure homeowners can rebuild after a catastrophic loss even when local zoning has made their property "nonconforming." "This bill is designed to give people the peace of mind that if they have a catastrophe, major loss, that they do have the ability to rebuild their home," Koppelman said.

The bill, which the committee heard at a public hearing, would apply only to residential structures. Under the draft language described by Koppelman, a nonconforming residential structure that is damaged more than 50% in value may be repaired, replaced, improved, maintained, restored or rebuilt if the owner: applies for a building permit within six months; begins restoration within one year; keeps the rebuilt structure within the original footprint, height and number of off-street parking spaces; and complies with applicable building, fire, sanitary and health codes.

Supporters told the committee the measure addresses problems that can follow rezoning or ordinance changes that leave older houses legally nonconforming. Real estate appraiser Jessica Cassidy said the change would make affected properties financeable and would help "hundreds of North Dakota property owners" who might otherwise be unable to rebuild or refinance. Cassidy described cases in West Fargo where residents learned of nonconforming status only after a fire and faced lengthy or failed variance processes that left them homeless or unable to close real-estate transactions.

Representative Vetter, who gave supportive testimony after Koppelman, and Cassidy both emphasized two timing triggers in the bill: a permit application within six months and visible restoration activity within one year. Vetter said, "the restoration part... it's as soon as they start restoring. So they dig the hole, they start doing the work. That's what has to be done in that year timeframe." Koppelman elaborated that pulling a building permit and having a contractor begin work would typically mark the start of restoration.

The bill contains a floodplain provision intended to preserve eligibility for the National Flood Insurance Program: reconstruction in flood-prone areas must meet floodplain-management requirements and not increase flood damage potential or obstruction to flows. Natalie Pierce, a certified floodplain manager speaking for the North Dakota Planning Association, warned that elevation alone does not remove a property from a flood zone and urged careful language so local floodplain and zoning authorities are not inadvertently limited. "Just because you elevate a structure does not mean it takes it out of the flood zone," Pierce said.

Opponents included the North Dakota League of Cities, represented by Bill Woken. Woken said the League opposes a state mandate that restricts local government decision-making and urged that local remedies—variances, ordinance changes, developer agreements—are sufficient in many cases. "The League of Cities is opposed to any mandate from the state or federal government that restricts decisions and options available to local government and its citizens," he testified.

Committee members questioned the bill's reach and the balance between statewide protection and local control. Some members said zoning and flood conditions vary widely across the state and asked whether a state-level rule is appropriate; supporters replied the bill includes allowances for local jurisdictions to adopt less restrictive standards and noted the measure has been revised repeatedly since its introduction in 2017.

Koppelman and other supporters also noted a practical financing consequence: lenders generally require that a legally nonconforming property be rebuildable after a catastrophic loss to remain financeable. Cassidy and Vetter described delays and closings held up for months while variance or zoning questions were resolved.

The hearing produced no committee action or formal vote. Committee members closed testimony after receiving pro, con and neutral remarks and acknowledged the bill has been considered in prior sessions and continues to generate questions about wording and local implementation.