2019 Session Review (Continued)
HOUSING NEGATIVE BILL
H. 4532 Sales Tax Reform

Sponsor: Repsersentatives Pope, Clemmons, Danning, Taylor, Bailey, Jordan, Kirby, Allison, Bennett, Brown, Chellis, and Norrell.

While we applaud the effort of the House to overhaul the SC tax code, this bill would require sales tax on the construction and real estate industries which would significantly raise the cost of housing at a time when we are struggling to provide enough low cost, entry level housing for the fastest growing areas of our state.

S. 488 / H. 3091-S. C. Inclusionary Zoning Act

Sponsor: Senator Marlon Kimpson and Representatives Pendarvis, Cobb-Hunter, and Cogswell.

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 moderateincome 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 aside 15 percent of the total for “moderately-priced” (less than 80% of median market value) dwellings.

By mandating the construction of these units, cities or 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.

Status: Neither bill received a committee hearing in 2019. SCBJ