Annexation is the process of adding new territory to an existing city. Until the mid-20^th Century, North Carolina law only allowed annexation by an act of the state legislature. Since then, municipal annexation authority has evolved significantly. Today most annexations begin with a petition from property owners. This blog post reviews the several methods by which a municipality can annex territory in response to a petition.

A Brief History of the Forms of Annexation in North Carolina

The oldest method of annexation in North Carolina is legislative annexation, which requires a local bill in the North Carolina General Assembly. The North Carolina Constitution, Article VII, Section 1, declares that “[t]he General Assembly shall provide for … the fixing of boundaries of counties, cities and towns, and … may give such powers and duties to counties, cities and towns … as it may deem advisable.” This language gives the General Assembly the authority to set local government boundaries, which necessarily includes the power to adjust those boundaries as well. For many decades, an act of the General Assembly was the only method by which property could be added to a municipality.

Shortly after World War II, the North Carolina General Assembly declared that, since it “devote[d] a large portion of its time in consideration of a multitude of local bills seeking” to add property to municipalities, it would be best to provide a procedure “through which the corporate limits of municipalities may be enlarged without resorting to” state legislation. S.L. 1947-725. As a result, it delegated to municipalities some authority to add territory by ordinance. Id. That form of municipal annexation, later called “involuntary annexation” because the municipality did not need to obtain permission from landowners in the area to be annexed, was a source of consistent controversy for decades to follow. In 2011, further legislation (specifically S.L. 2011-396) added many procedural hurdles and even a referendum requirement to municipality-initiated annexations, such that one can hardly consider them “involuntary” any longer. These annexations are now exceptionally rare, with perhaps only one occurring since 2011.

A little over a decade after introducing municipality-initiated annexation, in S.L. 1959-713, the General Assembly added statewide authority for municipalities to annex property upon petition from the owners of adjacent land. This authority has likewise grown and changed in the decades since its introduction.

The introduction of municipality-initiated and petition-initiated annexation processes has greatly reduced the number of legislative annexations, to where there are no more than a handful of legislative annexations each year. In fact, some years going by with no legislative annexations. This, combined with the changes to municipality-initiated annexation that have all but stopped it completely, means that most annexations today occur as a result of property owner petition.

Basic Process for Petition Annexation

An annexation by petition can take any one of the following three forms:

• Contiguous annexation, for property adjacent to the municipality;
• Distressed area annexation, which is a subset of contiguous annexations for lower-income areas that have certain special rules; and
• Satellite annexation, for property that is not adjacent to the municipality.

The process for all three forms of petition annexation—contiguous, distressed, or satellite—is generally the same and involves the following three steps:

1. Property owners (or in one particular case discussed below, residents) submit a petition to the municipality with their signatures, addresses, and property information.
2. The municipal clerk reviews the petition and certifies whether it meets the statutory requirements.
3. The municipal governing board sets a date for public hearing and provides 10 days’ published notice.
4. At the public hearing, the municipal governing board determines whether the petition meets the statutory requirements, and if it does, whether to approve the petition and annex the property or not.

When a municipal governing board decides to approve an annexation petition, the effective date of the annexation will vary by the kind of petition annexation used.

Annexation of Contiguous Property

G.S. 160A-31 describes the process for annexation by petition of contiguous property and requires that the petition must be signed by the owners of all property in the area to be annexed. Further, the property as a whole must be contiguous to the municipality. Property is considered “contiguous” if it abuts the municipal border or if it is separated from the municipal boundary by the width of a street or street right‑of‑way, a creek or river, the right‑of‑way of a railroad or other public service corporation, or land owned by state or local government. If approved, the annexation by petition of contiguous property can be made effective immediately, as of the next June 30, or as of June 30 of the following year.

Annexation of Property in Distressed Areas

There are slightly different rules for annexations of contiguous property in an area that is considered a “distressed area.” For annexation purposes, an area is “distressed” if at least 51% of the resident households have incomes at or below 200% of the federal Census Bureau poverty thresholds. For these areas, the statutes describe two special processes, either of which may be used to petition for annexation.

The first method is described in G.S. 160A-31(b1) and only requires the annexation petition to include the signatures of owners of 75% of the parcels in the area to be annexed instead of the 100% normally required. To qualify for annexation under G.S. 160A-31(b1), the area to be annexed also must have a population of no more than 10% of the municipality’s and one-eighth of its total boundary must be contiguous to the municipality. If the board finds the petition is sufficient and the area meets the statutory criteria, the board in most cases must approve the petition and annex the area.

There are two exceptions to this requirement: a municipality cannot be obligated to annex more than one area using this process in a 36-month period. It can also avoid having to annex the area if it can demonstrate to the Local Government Commission that the estimated capital cost of extending water and sewer lines to all parcels in the distressed area is less than five percent of the municipality’s annual water and sewer systems revenue.

This is the only petition annexation method where, if the area and the petition qualify, the governing board cannot deny the petition for annexation. Instead, once the board finds that the statutory standards are met, it must proceed to selecting an effective date that is within 24 months of the annexation’s adoption.

The other special process for annexing a distressed area involves a petition signed by residents who might not be property owners. Under this procedure, described in G.S. 160A-31(j), the petition must be signed by at least one adult resident (who may or may not be a property owner) of at least two-thirds of the resident households. Unlike petitions from distressed areas submitted under G.S. 160A-31(b1) and like most other petitions for annexation, the municipal governing board can choose to deny a valid petition. If the petition is approved, the annexation ordinance must be effective within 24 months of adoption.

Annexation of Non-contiguous (Satellite) Property

The process of annexing satellite (noncontiguous) areas, outlined in G.S. 160A-58.1, is the same as that of the process for annexation by petition of contiguous areas, with two exceptions. First, there are no special rules for satellite annexation of distressed areas. Second, in order for a municipality to annex a satellite area, the satellite area must meet all of the following criteria:

• The closest point on the proposed satellite area must be within three miles of the primary corporate limits of the annexing municipality. In other words, all satellites must be within three miles of the main area of the municipality, and a municipality cannot add satellites based on proximity to other satellite areas within its jurisdiction.
• No point on the proposed satellite area can be closer to the primary corporate limits of another municipality (unless an annexation agreement between the municipalities provides otherwise).
• The satellite area must be situated so that the annexing city can provide the same services to the proposed satellite area that it provides within its primary corporate limits, even if it must charge higher rates.
• If some or all of the area to be annexed is “subject to subdivision regulation,” then all of the subdivision must be included in the annexation. I discuss this potentially confusing criterion in this blog post.
• The proposed satellite area, when combined with all other satellite areas of the municipality, cannot be more than 10% of the area within the municipality’s primary corporate limits. It should be noted that there are dozens of municipalities, from Archdale to Zebulon, that are listed in G.S. 160A-58.1(b)(5) as exempt from this provision.

Frequently Asked Questions

Why do property owners seek annexation?

As with any question of why property owners make certain land use decisions, the reasons may vary. Often property owners seek annexation to obtain municipal services such as water, sewer, police, and road maintenance. They may also find the municipality’s rules match their vision and intention better than county regulations, such as when a commercial property owner in a “dry” county seeks annexation to be able to sell beer and wine.

Can a municipality require a property owner to petition for annexation as a condition of receiving services?

In general, yes. For many services, a municipality may not have authority to provide services outside of its territorial jurisdiction. This practice is discussed further in the book North Carolina Annexation Law, by Frayda Bluestein and David Lawrence, recently published by the School of Government.

Can a municipality agree to rezone property in exchange for the property owner’s petition for annexation?

Probably not. Municipalities are not allowed to contract away their legislative discretion; in other words, they cannot agree to something in a contract that would require a formal legislative approval by itself. This is different from the situation immediately above because, in the case of services, the municipality does not agree to annex the property. It requires the property owner to pursue annexation. 

Can a municipality consider applications for subdivisions, zoning map amendments, or other land use approvals before the annexation is complete?

Yes. General Statute 160D-204 allows a local government to receive and process proposals for zoning changes or for development approvals once a change in jurisdiction has been proposed. A decision on the proposed zoning amendment or development application cannot be final before the change in jurisdiction is final, but the decisions can be made concurrently with the change in jurisdiction and can have the same effective date. This concept is discussed further in this blog post.

Can Municipality A annex property from the extraterritorial jurisdiction (ETJ) of Municipality B?

Yes. The annexation statutes do not require any additional permission or process for a municipality that seeks to annex property from a different municipality’s ETJ.

For More About Annexation

For more detailed explanations of key annexation laws, see the School of Government publication North Carolina Annexation Law, by David Lawrence and Frayda Bluestein.