Horry County could make it a lot more expensive to build even as taxes rise. Here’s why.

Less than two years after setting impact fees for new construction, Horry County leaders are being asked to double them — a decision that builders say could cripple the region’s real estate sector.

Since July 2021, fees have set between $738 and $1,797 for commercial construction, and between $1,031 and $1,236 for residential — a policy that’s generated nearly $55 million worth of revenue to help pay for new growth: And that doesn’t include additional costs for emergency management, recreation, storm water and transportation.

Taking those into account, impact fees could top $10,000 in some cases but add $200 million in fresh money to the general fund.

Next week, the County Council will open talks on whether to boost those rates.

“We need to discuss it. I’m not saying it’s going to pass,” chairman Johnny Gardner said. “We have to talk about something of this monumental magnitude.”

The General Assembly has permitted local governments to assess impacted fees since 1976.

Madison Cooper, who heads governmental affairs at the Coastal Carolina Association of Realtors, said putting higher costs on developers looking to invest in the region likely will backfire.

“Demand to move to Horry County has remained resilient as compared to the rest of the country, but an increase in impact fees will slow the growth of the tax base,” she said.

Cooper pointed to a recent Partnership Grand Strand focus group held with Coastal Carolina University students. She said 80 percent of those surveyed said housing affordability and cost would play a role in whether they remain in the region after graduation.

An October 2021 presentation by the state’s American Planning Association chapter found them in use across 18 jurisdictions including Charleston, Georgetown County and Hilton Head Island.

Jason Repak, chairman of the Horry Georgetown Homebuilders’ Association board, said members weren’t aware of the possible price hikes until the issue showed up on a county council subcommittee agenda late last week.

“People who live here and work here cannot afford to buy a home here,” he said. “This potential increase in impact fees that have come out of county council over the last two years that is only making the affordable housing issue in this area worse.”

State population forecasts suggest Horry County will be South Carolina’s second largest in a decade, with much of that growth pouring into unincorporated areas where infrastructure is scant and in some cases nonexistent.

“There’s definitely a shortage of large acreage parcels in the area. There are a lot of folks out there that are seeking relatively larger acres to build a house on rather than being packed into a subdivision. I think there’s opportunity for both markets to exist simultaneously, and I don’t forsee there being any slowdown in the future,” said Jack Izard, a vice president at Domain Timber Advisors — which manages more than 5,500 acres across the county.

A September 2022 report by Maryland-based consulting firm TischlerBise is the foundation for the suggested impact fee increases.

If approved later this summer, they would follow a tax increase built into next year’s budget.

“For me, it’s making sure that money spent by the county is being spent in the most effective way possible, and I don’t believe that increasing taxes on just those that are new to the area is the right path,” Repak said.