A Home for Orphan Roads

North Carolina is one of a handful of states — others include Alaska, Delaware, Virginia, and West Virginia — where counties don’t have their own road departments. This means most roads outside of cities are either owned by the states or are private. However, some roads don’t have any clear owners and are effectively abandoned, leading them to be called orphan roads.

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This becomes a problem when people buy a home not realizing that the road that the home is on is orphaned. Eventually, the road wears out and homeowners face thousands of dollars of maintenance costs. They then typically demand that the state take over maintenance, which would force other taxpayers to subsidize the homeowners. North Carolina’s John Locke Foundation asked the Antiplanner to take a look at this issue.

This isn’t the kind of report I usually write; I’m most often asked to review at a long-range transportation plan or individual transportation projects. In fact, I was originally perplexed why this was an issue at all.

In my home state of Oregon and most other states, developers who build roads routinely deed them over to the cities or counties. But this doesn’t happen in rural areas of North Carolina and other states with no county road departments.

This orphaned street is heavily worn, yet it is in a subdivision whose homes are only six years old.

I used Google street view to look at two subdivisions in Charlotte suburbs, one of which had streets maintained by the state and the other had orphan roads. The subdivision with orphan roads was new — most homes were built in around 2017 — yet the streets were in terrible condition. The other subdivision was old — many homes were built in the 1980s — yet streets were in excellent condition.

This state-maintained street is in excellent condition even though it is in a 40-year-old subdivision.

There are two reasons why orphan roads may be in poor shape. First, counties that have their own road departments will only approve new developments if the roads will be built to county standards. In North Carolina, the counties don’t expect to take over roads, so they may approve developments with roads that won’t meet state standards.

Second, one of the North Carolina standards is a density standard of 20 homes per mile of road or street. If a development fails to sell enough homes to meet the density standard soon after the roads are built, the roads might deteriorate below state quality standards before the density standard is met.

This is a bigger issue in North Carolina than the other states because the state was rapidly growing in the 2000s and developers created a lot of subdivisions and built roads in anticipation of selling the lots. Then the crisis hit, growth slowed, and by the time enough lots were sold to meet the density standard, the roads had deteriorated below state standards. The roads in the first photo above may have been built in 2007 and allowed to deteriorate for ten years before the homes were built.

The state need for a density standard reflects the difference in funding mechanisms between counties and states. County roads are often funded out of property taxes, and new subdivisions greatly increase tax revenues, which will pay for road maintenance. States, including North Carolina, get most of their road monies from fuel taxes and vehicle registration fees, and a new subdivision doesn’t generate enough fees to pay for maintenance.

Worse, subdivision roads are typically paved with asphalt, which benefits from frequent use as the weight of vehicles keeps aggregate compressed. Lightly used local roads are more likely to deteriorate faster than arterial and collector roads. Thus, local roads cost more to maintain but generate less fuel taxes for the states than other roads. Asking states to take them over creates an equity issue as other drivers, mainly those in cities, end up having to subsidize rural or exurban homeowners.

This is also an issue in North Carolina due to inadequate real estate disclosure. Realtors typically offer potential homebuyers a disclosure form that provides information about the condition of the roof, septic tanks, and other key parts of the home. North Carolina disclosure forms answer only one or two vague questions about roads and didn’t reveal if the street the home was on was orphaned or how much the homeowner would have to pay to keep in maintained.

When confronted with this issue, the temptation is to place stiff regulatory requirements on the counties by, for example, forcing them to ensure that roads meet state standards before approving new subdivisions. However, there is no guarantee that counties will enforce those standards or even have the expertise to do so.

Instead, this report proposes to create new mechanisms to reduce the likelihood that roads become orphaned. First, the state real estate board should include more information about roads on disclosure forms.

Second, counties should be given the option of taking over roads, if they want to, and collecting property taxes to pay for those roads. That’s not likely to happen everywhere, but at least one county in Virginia has taken over local roads and streets.

Third, the state should give local homeowners in communities that have orphan roads a choice: either they write road maintenance agreements approved by at least 75 percent of property owners spelling out how the roads will be maintained and how the costs will be divided among the owners, or the state will take over the roads and assess property owners an annual fee sufficient to pay most of the costs of long-term maintenance — most, but not necessarily all as even in cities local streets are effectively cross-subsidized by fuel taxes paid to drive on arterials and collectors. Such a fee, which so far has not been a part of the debate over orphan roads, would allow the state to maintain local roads without imposing significant costs on other state drivers who don’t use those roads.

Living in a rural or exurban area can be wonderful, but it is a privilege, not a right. People who live in such areas shouldn’t expect other people to subsidize them. Urban planners have urged cities and counties to adopt urban-growth boundaries to keep people from living in distant areas at other people’s expense. A better way of handling this is a system of fees that makes sure that, wherever people live, they pay the costs of their own utilities and services.