Raleigh -- June 16, 2026: The North Carolina Senate Judiciary Committee has advanced a rewritten piece of legislation that would institute a sweeping, statewide ban on public homeless encampments, placing the logistical and financial strain directly onto municipal governments.
The modified version of House Bill 437 combines strict anti-camping regulations with heightened criminal penalties for drug offenses near shelters. Under the new provisions, local cities and counties across North Carolina would be entirely barred from authorizing or allowing individuals to regularly sleep or camp on any public property.
While the bill creates clear, strict mandates for local governments to enforce, committee discussions highlighted a glaring point of contention: the piece of legislation comes with zero state funding for local infrastructure, rehabilitation, or preventative care.
Strict Local Mandates and Legal Vulnerabilities
If passed into law, House Bill 437 shifts the entire operational burden of addressing unsheltered populations to local jurisdictions. To comply with the law, municipalities would be restricted by the following boundaries:
Temporary Designated Areas: A city or county governing board may vote to designate specific public property to be used for public camping or sleeping, but only for a continuous period of up to one year.
Mandatory Operational Standards: Local governments choosing to establish these temporary areas are legally required to fund and maintain strict minimum standards. These include providing continuous security, running water, functional toilets for sanitation, and coordinating directly with county health departments for behavioral health resources.
Private Lawsuits Against Cities: In a move that local officials worry could expose local governments to major financial strain, the bill explicitly permits local residents, business owners, or the state Attorney General to bring civil lawsuits against any municipality that fails to properly enforce the camping ban or maintain the required standards.
The Debate Over Federal Grants
During testimony, Republican State Senator Brian Biggs, who presented the sweeping amendment, defended the measure by pointing to federal resources rather than state allocations. Biggs argued that local governments could tap into $4.4 billion in existing U.S. Department of Housing and Urban Development (HUD) homeless assistance grants available on a national scale.
Biggs noted that the HUD secretary requires clear local "guardrails" and a defined plan of action to move unhoused populations forward before granting access to federal funds. When asked how areas without existing shelter beds should immediately manage unsheltered residents before federal grants clear, Biggs stated that municipalities would have to rely on the temporary designated areas.
"Most cities, large cities... they have homeless shelters, and a lot of those, hopefully they are housed," Biggs testified. "But if they don't have homeless shelters, that's when they would do the designated area."
The push mirrors a broader national shift. An executive order directed federal agencies to reward local jurisdictions that actively dismantle street encampments and transition individuals into managed spaces, a policy shift that is now directly influencing state-level legislative drafts.
A Glaring Gap in Prevention, Rehab, and Employment
The proposal has drawn sharp criticism from opponents who argue that the bill creates an impossible, unfunded mandate by focusing entirely on restriction while omitting any state funding to address the root causes of housing instability or substance abuse.
Specifically, the legislation allocates zero state funds for:
Substance Abuse Treatment: While the bill creates a Class E felony for manufacturing, selling, or delivering controlled substances within 100 feet of a marked homeless shelter, it provides no increased assistance or funding for drug rehabilitation or recovery programs.
Workforce Transition: For unhoused individuals who are not struggling with addiction, the bill offers no financial aid or state-backed resources to secure a temporary place to stay while seeking employment.
Homelessness Prevention: The bill leaves local communities without state assistance to fund critical preventative services that can keep families in their homes, such as job training, emergency child care, or immediate transportation assistance (like bus passes or fuel vouchers) to help people get to interviews or commute before their first paycheck arrives.
Local Infrastructure Gaps Trigger Alarm
In many rural regions of North Carolina, dedicated emergency shelters do not exist. Meanwhile, metropolitan shelters routinely operate at or near maximum capacity, leaving local officials with few places to lawfully move people.
Opponents emphasize that without direct state dollars to build infrastructure or create affordable housing, the law simply penalizes poverty. Senator Lisa Grafstein (D-Wake) voiced concern during the hearing, arguing that the policy shifts focus away from proactive solutions.
"It’s sending the signal: We sort of give up," Grafstein said. "We sort of give up trying to figure out how we’re going to develop more housing, and we give up on the kinds of outreach that are happening."
The practical realities of the infrastructure gap are stark across the state. In the Wilmington area, for instance, the most recent Point-in-Time count revealed that 53% of the region's unhoused population was completely unsheltered.
Current Status and Next Steps
Beyond the public camping bans, the updated version of House Bill 437 maintains its focus on creating "Drug-Free Homeless Service Zones," including a Class H felony for shelter operators who intentionally permit drug distribution within their facilities.
House Bill 437 has been re-referred to the Senate Committee on Rules and Operations for further review before it can head to the Senate floor. If fully enacted, the Department of Labor would be tasked with implementing the final rules, with the public camping provisions currently projected to take effect on June 30, 2027.