Land at Risk: Heirs' Property in the Carolinas

Page Menu +

• Archives

In 2021, the Richmond Fed highlighted the issue of heirs' property (and its prevalence in Maryland and Virginia) in a Regional Matters post. Heirs' property occurs when land is transferred from one generation to the next without a clear will or definition of land ownership. Since multiple heirs can lay claim to a parcel of land, heirs' property can impede or complicate the sale of the land or the ability of owners to prove ownership, among other challenges.

Using the same methodology for North Carolina and South Carolina, this Regional Matters illustrates the prevalence of heirs' property across other Fifth District states. For example, North Carolina had a greater share of known heirs' property (1 percent of all parcels in the state) compared to South Carolina (0.2 percent of all parcels). But overall, both states had larger shares of known heirs' property than the 2021 analysis of Virginia or Maryland.

Heirs' property creates challenges for individuals and families regarding land and wealth retention. It can also present challenges to local, state, and federal government in terms of development costs and disaster recovery. Across the Carolinas, research and nonprofit organizations are studying and working to resolve heirs' property. While nonprofit organizations are helping families on a case-by-case basis, the Uniform Partition of Heirs' Property Act (UPHPA) remains a policy solution that can help ease the risks facing heirs' property owners. South Carolina passed the UPHPA in 2016, while North Carolina has introduced - but not yet passed - the legislation.

Heirs' Property Prevalence in the Carolinas

This post expands upon the geographic scope of analysis from the 2021 Regional Matters post to include heirs' property in the Carolinas. The map below was developed using a 2019-2023 CoreLogic Real Estate dataset. It shows the percentage of county parcels that are known to be heirs' property, but it does not capture heirs' property that has not been identified as such. Because of this, the map represents a low-end estimate of heirs' property prevalence. The greatest challenge of heirs' property continues to be estimating how much unresolved heirs' property exists. Identifying counties with high concentrations of known heirs' property may help identify areas with higher concentrations of unrecognized and unresolved heirs' property.

Counties in eastern North Carolina and eastern and southern South Carolina have the highest concentrations of known heirs' properties. (See map below.) Bamburg County, S.C., and Martin County, N.C., had the highest share of known heirs' property across both states at 7.9 percent, respectively. More counties in North Carolina have a higher share of known heirs' property compared to South Carolina. One trend that was true across both states: Rural counties had a larger average share of known heirs' property (1.6 percent) compared to urban counties (0.5 percent).

Source: 2019-2023 CoreLogic Real Estate Data, Property Basic and Historical Property Basic Dataset
Notes: This map counts a property (or parcel) as "heirs" if it was flagged as heirs' property by CoreLogic from the years 2019-2023. Each unique property was counted only once. This data only captures nonfarm, residential heirs' parcels that were not resolved before 2023.

Studies that estimate the amount of total heirs' property, like a recent report from the Housing Assistance Council, will often use demographic indicators to identify places that are likely to have heirs' property. These indicators often include race and ethnicity, educational attainment or income. The connection between race and heirs' property is well documented, and it is deeply rooted in the history and experience of enslaved people and their descendants in the South. Since the Civil War, cascading factors including lack of land records and purchase documentation, lack of full civil rights, discrimination from legal and lending institutions, and lack of access to legal services has resulted in higher proportions of fractional ownership and subsequent land loss for Black Americans. Counties in rural eastern North Carolina with especially high concentrations of heirs' property like Northampton, Bertie, Martin, and Washington, have a historically large Black or African American population, lower educational attainment, and lower income.

In addition to the maps, this post reviews some of the risks associated with heirs' property, which were informed by input from academic and nonprofit contacts in North Carolina. Some of those risks include loss of family wealth, loss of agriculture and forestry land, loss of affordable housing, and natural disasters.

Risk to Generational Wealth Building

Estimates from the Conservation Trust for North Carolina, a nonprofit organization advocating for land conservation and resilient communities, and Wake Forest Law value heirs' property in North Carolina between $1.86 and $2 billion. Therefore, if heirs' property owners in North Carolina were able to resolve title issues, it would likely represent a significant opportunity for wealth retention.

Risk to Agriculture and Forestry Land

Rural eastern North Carolina is also referred to as the "wood basket" of the state with 1.45 million acres of timber and a dominant industry presence of tree production, harvesting, milling, and forest products. Overall, agriculture and forestry is a $1.3 billion economy in North Carolina and after Texas, North Carolina has the second highest acreage of agricultural and forestry land lost through heirs' property. Researchers at North Carolina State University and the North Carolina State Agricultural Extension are partnering to host workshops for residents with vulnerable property ownership arrangements. The workshops highlight opportunities for land preservation and wealth building through agriculture and forestry land uses.

Risk to Development and Housing Supply

Heirs' property is not just complicated for families to navigate; it can present a challenge for communities and localities that are striving to grow or redevelop. For instance, when a coalition of 18 neighborhoods in western North Carolina set out to revitalize older homes with essential utility updates, they found that some residents were ineligible to tie into the metropolitan sewer system because there were no clear titled owner on their homes. If the localities enforce zoning code regulations to declare those properties blighted or derelict, it may also have the undesired consequence of displacing existing residents, many of whom are older. These kinds of infrastructure issues can be barriers for localities seeking to increase affordable housing supply because, for many communities, that means preserving and updating their existing housing stock.

Risk to Natural Disaster Resiliency

Natural disasters present additional compounding risks for heirs' property owners. In order for individuals to claim disaster relief funds, proof of property ownership and a clear title is often required. The same group of neighborhoods in western North Carolina that encountered title ownership issues when revitalizing properties were also some of the hardest hit by Hurricane Helene.

In April, Legal Aid of North Carolina reached a settlement with the U.S. Department of Housing and Urban Development after heirs' property owners were denied disaster recovery aid under the ReBuild NC Homeowner Recovery Program in the wake of hurricanes Mathew (2016) and Florence (2018). The case argued that the denial of aid constituted housing discrimination as the majority of heirs' property owners were Black or African American. It is not yet clear whether eligibility requirements will be different if public recovery funding for Hurricane Helene becomes available to property owners.

Resolving Heirs' Property

One of the specific goals of the UPHPA is to mitigate scenarios where entire parcels are sold at auction without giving a buyout opportunity to other interested family members (referred to as partition sales). Since our first post in 2021, the UPHPA has been introduced and passed in the District of Columbia but introduced without passage in West Virginia and North Carolina. Critics of the legislation argue that the bill does not provide equitable access to decision-making about communal property, pits family members against one another, is not uniformly enforced by judges, lengthens the time and cost of the partition process, and may make it harder for farmers to qualify for U.S. Department of Agriculture programs. However, the UPHPA remains one of the main policy levers that aims to reduce landowners' property loss though partition sales. A comparison of heirs' property prevalence in states that have passed UPHPA and those that have not may be useful additional research on the policy's impact.

Especially with pending legislation in North Carolina and recovery in the wake of natural disasters in the Carolinas, understanding the landscape of heirs' property concentration in both states may help families and individuals rightfully retain the wealth in their land.

Because of the legal complexity of resolving heirs' property, groups like the Heirs Property Practitioner Network (HPPN) are providing information and mitigation strategies to attorneys who specialize in generational real estate ownership. Nonprofit organizations also play a key role in preventing heirs' property cases from going to court by encouraging and providing support for succession planning.

Some of the advocacy organizations that raise awareness about heirs' property and assist families in the Carolinas include:

• Black Family Land Trust, Inc.
• The Conservation Trust for North Carolina
• Center for Heirs Property Preservation
• The Land Loss Prevention Project
• The Sustainable Forestry and African American Land Retention Network

Views expressed are those of the author(s) and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.