VI. Additional Pending Legislation

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HOUSING POSITIVE BILL S. 281 / H. 3786 -ROLL BACK TAXES

Sponsors: Senator Shane Massey and Representatives Long, Bales, Martin, Burns, Chumley, Daning, Magnuson, Loftis, G. R. Smith, Simrill, B. Newton, Fry, Jordan, Elliott, Pope, Atkinson, Yow, Anthony, Williams, Bannister, Bedingfield, Forrester, Henderson, Herbkersman, Hill, Hixon, Lowe, V. S. Moss, Putnam, Sandifer, Toole and Tallon.

Status: This bill is currently being held up as we wait for the court’s decision in a pending case dealing with this issue.

Currently land classified for agriculture use receives special tax breaks but when this land is converted to residential or commercial usage the new owner is forced to pay roll-back taxes. The newly acquired or reclassified property is then taxed based upon the full value previously determined by the county, and five years of “roll-back” taxes are due. Rep. Steven Long (R-Spartanburg) and Senator Shane Massey (R-Aiken, Edgefield, Lexington, Saluda and McCormick) have introduced legislation that would limit the roll-back tax penalty to one year instead of the last five years when converting agriculture property to residential or commercial use.

HOUSING NEGATIVE BILL

S. 346 / H. 4162-S. C. INCLUSIONARY ZONING ACT Sponsor: Senator Marlon Kimpson and Representatives Mack, Whipper, Gilliard and Brown.

Status: S. 346 was carried over (being held in place) in the Senate Judiciary Committee and H. 4162 has not had a hearing.

The legislation would provide authority for counties and municipalities to use inclusionary zoning strategies to increase the development of affordable housing for low and moderate income families and/or charge a fee to the builder/developer in lieu of the zoning.

Meeting the demand for affordable housing has long been a hot button topic for homebuilders, public officials and of course, those looking to stake their claims as homeowners. After all, home ownership remains an almost sure-fire way for low-and moderate-income families to build equity and better their financial futures.

Inclusionary zoning occurs when local governments attempt to promote affordable home ownership through zoning that mandates homebuilders construct a certain number of affordable homes in a new development. For example, a developer building a subdivision of more than 50 single-family homes would have to set aside15 percent of the total for “moderately-priced” (less than 80% of median market value) dwellings.

By mandating the construction of these units, counties would be directly impacting the value of land and restricting the rights of landowners to get the greatest return possible on their property. Another dilemma for property owners and builders is extra time and fees associated with the zoning. Are builders expected to pass the extra financial burden along to homebuyers? Does a higher-priced home not defeat the purpose of the regulations? Will prices then also be higher for the majority of homeowners to help offset the additional costs of these undervalued homes?

A published Reason Institute policy study, “Housing Supply and Affordability: Do Affordable Housing Mandates Work,” found that after passing an inclusionary ordinance the average city produced less than 15 affordable units per year. The study of 45 cities also found that new construction decreased by 31 percent following the adoption of inclusionary zoning and the price of new homes in the median city increased by $22,000 to $44,000.