Horry County wants impact fees. And it wants your neighbors to pay for it

Horry County’s population is projected to increase by more than 100,000, and if you think the county needs more money to pay for the growth, you’re not alone.

At county council’s fall planning retreat Wednesday, the council voted to direct the administration to find a way to change South Carolina law to expand how counties can use impact fees.

Council Chairman Mark Lazarus said the current law won’t work to serve the county’s needs.

“It’s so limited and I believe it was kind of put together that way so we couldn’t use it,” he said.

Issues with the existing law

Right now, there are more than 53,000 single-family and multifamily residential units already zoned in unincorporated Horry County that have not been constructed, according to the planning and zoning department. The population is projected to climb from 322,000 in 2016 to 423,000 in 2040.

With new growth comes more traffic on roads, more infrastructure, and more people who need services. And state law prevents counties from using impact fees to pay for anything outside the development where the fee was assessed, even if growth in the development causes problems in another part of the county.

“Right now, you can only use that money for infrastructure in a particular development or area,” Lazarus said, adding that the county looks at problems from a regional perspective.

Under current state law, money from impact fees can only be used in the development where the fees were assessed, according to the planning and zoning department, and must be proportionate to the cost associated with the development. That means the fees can’t be used to expand roads leading into a development to handle the traffic increase, or to repair storm water pipes affected by a new neighborhood upstream.

The money can be used for water, solid waste, transportation, (excepting state roads) storm water, parks and recreation, libraries, fire, EMS and law enforcement, according to planning and zoning.

But the money can’t be used for capital investment of less than $100,000.

“I can’t even buy a police car with it because you can’t bundle the police cars, it’s per item,” Lazarus said. “And we also can’t hire any employees with it.”

Another problem Lazarus cited was the three-year spending slot.

State law mandates that the money must be collected from developers when they get a building permit, and the money must be spent within three years. The county must still maintain the same level of service in that area even after the impact fee money is gone.

A new law?

A new law could allow the county to use impact fees more broadly by getting rid of restrictions like the three-year spending slot and the geographical limits on where the money could be spent.

And if Lazarus has his way, the new law would pass impact fees on to your neighbors.

“The reason is because the developer is going to pass the cost on to the end user anyway, which is the homeowner,” he said. “If the developer goes in and gets permits for 30 houses, that’s a negative impact on the developer prior to selling the house while the person occupying the house will eventually be creating the need for the services.”

Lawrence Langdale, the legislative committee chairman for the Horry Georgetown Home Builders Association, said the association is generally supportive of impact fees under current law, but was skeptical of changes that would broaden the use of the impact fee.

“The current law requires the county or city have a specific plan on what they intend on using the impact fees for,” Langdale said. “We wouldn’t support anything that would give them free reign in the use of those funds. My guess is they would like to be able to collect a fee and utilize it for anything and anywhere they want to without any accountability.”

Langdale said the association would have to do more research on the idea of assessing the fee on homeowners.

“Ultimately, the homeowner is paying for it anyway regardless of when you collect,” he said. “I think all of our goals is to keep housing affordable every day.”

How do the impact fees work in neighboring states?

The South Carolina impact fee law is relatively expansive when compared to neighboring North Carolina, where fees are limited to paying for water and sewer service.

“Typically when a developer comes in and develops a subdivision, they will typically pay the cost of running the lines within a subdivision itself,” said Scott Mooneyham, Director of Public Affairs for the North Carolina League of Municipalities.

“The idea here is that these are fees that are about the overall capacity of the system and paying for the capital cost when a development increases the cost of the overall system,” Mooneyham said. “The legislature here has always taken a dim view of impact fees that are not specific to paying for the cost of development.”

But Georgia has a much different philosophy.

There, impact fees can be used to pay for infrastructure, parks, libraries, infrastructure including state and federal roads, wastewater collection and police and emergency facilities, according to the Georgia Department of Community Affairs.

And the fees must be used to benefit everyone, not just the development where the fee was assessed, said Amy Henderson, Director of Communication and Marketing for the Georgia Municipal Association.

She cited libraries as an example.

“The library may not be within that development, but if you’ve got a lot of houses where you’re going to have more people or children using the library, it can be used to expand or upgrade the library,” she said. “It has to be used to benefit the entire system, not just one neighborhood.”

This story was originally published November 30, 2017 at 6:00 PM with the headline "Horry County wants impact fees. And it wants your neighbors to pay for it."