Solution or deterrent? Horry County moves step closer to enacting impact fees

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HORRY COUNTY, S.C. (WBTW) — Horry County Council moved one step closer to enacting an impact fee ordinance at Tuesday night’s council meeting.

The impact fees would apply to any new development in the county to offset the strain new developments put on county infrastructure. Not everyone is on board with the new proposed fees. After heated discussion about the ordinance, council ultimately passed its second reading, but one councilman said this story is far from over.

“This story is nothing like over yet because a lot of us are still unhappy with the details,” Councilman Johnny Vaught said. “Some of the details include the cost to small businesses to open up a new business.”

The proposed ordinance applies to all new construction in the county, whether it be residential, industrial, or commercial. Vaught said this wasn’t the original intention of the ordinance, and he worries it would drive small businesses out of the unincorporated parts of the county.

“We think there is too much of a burden on small businesses,” Vaught said. “We originally envisioned doing an impact fee basically for new homes. Pure and simple.”

Vaught said currently, the impact fee ordinance is ‘convoluted’.

“I think impact fees are necessary and new development should pay for new development, but we’ve got this thing so convoluted now that I don’t think anybody understands it.”

When asked if there’s a strain on Horry County’s infrastructure, Vaught said there absolutely is.

“Drive down Highway 90 and just look at all the new developments,” he said. “There are already 3,000 new homes permitted and I already have more on the drawing board to go out there. Highway 90 is a single-lane road about 20 miles long that’s going to take half a billion dollars to improve. That’s just one of the things happening all over Horry County.”

Vaught said the housing developments are causing a strain on the infrastructure, not businesses. He said the burden should fall on those purchasing the new construction rather than the developer, and that small businesses should be excluded.

“Somebody opening up a carpenter shop or a retail shop in a strip mall is not causing a lot of heat on our infrastructure,” he said. “It’s these 200-home housing developments and 1,000-home developments.”

Vaught said another concern is which point in the development process the money would be collected.

“We discussed that at length [Tuesday night] and right now the consensus is that it’s best done when the permit is pulled,” Vaught said.

News13’s Taylor Hernandez spoke with developers last week who are against the fee. Several developers said the fees could stifle growth in a booming market. One developer said the county is finally rebounding from the pandemic and imposing a fee could stop buyers from coming into the market.

Another developer argued that the fee should be the burden of the homebuyer, not the developer, because in the end, the fee would drive up the price of the build anyways.

“A lot of developers don’t like that because if you’re doing a 200-home track at $5,000 per home and you pull all those permits at once, that’s a lot of money to have to front until you actually sell the house,” Vaught said.

Steve Powell, the president of Venture Engineering said the current proposed impact fee for homes is too high.

“The multi-family unit impact fee is so high that the clients I’ve started talking to about this — you know I’ve got one client who’s got two, hundred unit townhome projects and today, since I talked to him this morning, he’s putting his seller on notice that this could kill the deal,” Powell said.

Powell said the impact fee could cost one of his developers $1 million for one project and $600,000 for another project.

“If you can’t sell affordable housing to his customers because they can’t afford it anymore, then you’re just looking at rentals and if you can’t make any money in rental housing, or rental housing goes up, there is nowhere for them to live in Horry County,” Powell said.

Here are the latest proposed impact fees on construction:

  • $7,439 per 1,000 square feet of a retail building
  • $5,728 per 1,000 square feet of an “institutional” building
  • $4,838 per single-family home
  • $3,274 per multi-family unit
  • $2,857 per 1,000 square feet of an office building
  • $2,587 per hotel room
  • $1,155 per 1,000 square feet of an industrial building

“Tanger Outlets is about 553,000 square feet of retail space,” Powell said. “If you had to buy a building permit for that today under this new ordinance, your impact fee would be $4.6 million. Do you think anyone is going to invest in Horry County and build a shopping center if they have to pay close to $5 million just in development impact fees that doesn’t get them any revenue?”

One woman in favor of the fees said it could help flooding issues, and mentioned how a majority of Horry County voters were in favor of the fee.

A portion of the impact fees collected would go toward storm water infrastructure, which April O’Leary with Horry County Rising said is long overdue.

“70% of constituents in your district voted to support impact fees,” O’Leary said. “As you know, most of our storm water infrastructure was designed 80 to 100 years ago. It’s really not helping us with current flooding impacts and it’s certainly not helping us with future flooding.”

Vaught said the money from the impact fee could only be spent on buildings, roads, and other similar things. He said it can’t be used to pay anyone’s salaries.

“Say that on Highway 90, which is a good example — you have a new development going in and you need to add turn lanes or fix the intersection, that’s fine, but if Highway 90 needs repaving, you can’t do it,” Vaught said.

The ordinance must pass a third reading before becoming finalized.

“Nobody is really happy with it like it is and a lot of people will not vote for it in the form it is right now for third reading unless we make some changes to it,” Vaught said.

Owner of Raybon Home Center, Seth Raybon said the Georgetown County model is a good one to follow because it is affordable.

“We just want it to be affordable and fair. For everyone,” he said.

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