In a world filled with strife and pandemic challenges, it could be easy to overlook a recent change in South Carolina law that will provide hope to people who need it the most. In September, despite all the challenges created by COVID-19, our state leaders and governor approved a change in state law that will stimulate the development of additional affordable housing across South Carolina.
If you’ve never needed affordable housing, you might not initially see the significance of this change. But for all those who struggle to find quality affordable housing for their families, this is a story of good government at work.
A bill introduced by Sen. Paul Campbell, and eventually signed by Gov. Henry McMaster, gives local governments an additional tool to allow private developers to build affordable housing in areas of need across our state.
In what some insiders say should be a model for other states, South Carolina will allow tax increment financing revenue to be used to help construct private affordable housing. A TIF district essentially reallocates funds from property taxes to encourage investment within the established district. So in some of our cities, where jobs are located but quality affordable housing is not, local governments can now incentivize private developers to invest and build quality affordable housing.
The local taxing authorities — city, county and school district — must approve all TIFs before they go into effect. They then have the discretion to allow for new TIF revenue to be spent on affordable housing.
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This change has been supported by well-known private developers who would like to help make meaningful change in some of our inner-city areas. For instance, in the Charleston region, it’s been reported that more than 30% of people cannot afford to live where they work. This means long, costly commutes to work each day. And oftentimes, a challenge for existing companies and businesses looking to locate in an area. Similar affordable housing stories are replicated across our state.
This new TIF development tool, plus an additional change in law providing a state low-income housing credit for firms that qualify for the federal credit, couldn’t come at a better time. COVID-19 has injured our economy and the individual households that make up our country. Families who needed affordable housing prior to the pandemic are now at an even bigger disadvantage.
But together, state leaders took a bold step to help these families address this statewide affordable housing need that has been difficult, if not impossible, to tackle. We salute the nonprofits and other organizations that have been working to develop affordable housing for decades. Your task has been tall. We welcome the anticipated private developers who may now build their first affordable housing project. Your efforts are needed.
May we all look for ways to support each other as we navigate these challenging times.
George Bullwinkel is a commercial real estate lawyer with Nexsen Pruet. Burnie Maybank is a two-time former director of the South Carolina Department of Revenue and a tax/economic development lawyer at Nexsen Pruet.