Horry County closed a zoning loophole to slow development. How hard will developers fight back?
Here’s something that Horry County developers know that average residents may not: The zoning code — the rules that say what can be built where — contains loopholes.
One of those loopholes, prior to a change just before Christmas, allowed developers in the county to pack more homes and apartments onto a piece of land than zoning rules technically allowed if the property contained wetlands. And it gave developers a key piece of leverage if they were seeking to rezone their land.
The loophole worked like this: Say you owned 100 acres of land, zoned under the broad Commercial Forest Agriculture (CFA) category. CFA zoning rules allow for two homes, or three apartments, per acre, meaning 200 houses or 300 apartments spread out over your 100 acres. Simple.
But let’s say 90% of your 100 acres, or 90 acres, was wetlands, and you could only build on 10 of the acres you own. The loophole in CFA zoning allowed developers to pack the density allowed for the full parcel of land onto the smaller part that they could build on. That meant that the 300 apartments, for example, could be built on 10 acres of land, rather than being spread out, increasing density in once-rural areas.
And while it would be more profitable for developers to rezone CFA land to a residential category, the loophole gave developers a bargaining chip when seeking those changes.
Horry County, though, closed that loophole on Dec. 14.
And now developers are upset.
“It’s an inverse taking, it’s fraudulent,” said Steve Powell, a developer with Venture Engineering, arguing that Horry County infringed on landowners rights by closing the loophole.
“I don’t have anything positive to say regarding the changes made to the CFA zoning classification,” added Felix Pitts, an engineer with the development firm G3 Engineering.
So incensed is the development community in Horry County, in fact, that several people have floated the possibility of challenging the change with a lawsuit against the county, though it’s not yet clear who might sue, or when. No such lawsuit had been filed as of the publication of this story, according to the county’s court database.
Others, though, speculated that malcontent among developers over the change to CFA zoning could play out in county council elections this spring. County Council Chairman Johnny Gardner, who’s demonstrated a willingness to impose stricter rules on developers (he helped usher through impact fees and more stringent anti-flooding building standards, for example), is up for reelection this year, and former county Chairman Mark Lazarus told The Sun News last week that he is exploring a run against Gardner.
Lazarus criticized the changes to CFA zoning and said that while specific developers have not approached him about running against Gardner, he generally enjoys the support of the development community.
“I’m not working directly with any developers, I have friends throughout the entire county from A to Z...(from) developers to retirees. And a lot of them are not liking the direction that the county is going,” Lazarus said.
For Horry County residents who increasingly oppose new building in the region, the situation amounts to this: As county leaders work to slow the county’s rapid growth to appease residents, developers are fighting back. That’s a trend likely to continue until the real estate market changes.
“There’s just a very vocal minority of people who oppose growth,” Powell said. “(County leaders) are responding to a very activist vocal group of property owners.”
Why CFA zoning was changed, and why it matters
Believe it or not, there was a time in Horry County before land zoning existed.
And it wasn’t that long ago.
By the mid-1990s, part, but not all, of Horry County had land zoning. Between the mid-1990s and early 2000s, county leaders worked to change that, by zoning all of the land in the county.
Residents, though, were strongly opposed. Some supported zoning because it could prevent landfills from being located near their homes, while others believed the county had no right to tell them what they could and couldn’t do with their land. Former county planners have told The Sun News that the debate was so heated, some residents would bring shotguns to county planning meetings.
Ultimately, the county created two broad zoning categories that largely satisfied both groups: Forest Agriculture and Commercial Forest Agriculture. Both categories bar landfills, and allow for numerous other uses, from farms to homes to churches to businesses. Large swatches of Western Horry County were zoned as FA or CFA, with CFA being more common along the county’s rural highways such as S.C. 701 and S.C. 90.
As the county grew, though, and developers began building homes along those once-rural highways, the housing density and other uses allowed by CFA became important issues. Last year in Carolina Forest, for example, Pitts argued that the county should support a rezoning from CFA to residential because keeping the land CFA would force developers to build a much more “noxious” project than the homes and apartments they wanted to build.
“There’s a lot more noxious, offensive uses that are allowed on the property than what we’re proposing,” Pitts argued at the time.
That’s where the CFA loopholes come in. Developers like Pitts had successfully found ways to argue that out-of-date zoning categories like CFA should change, even if that meant more housing density or businesses that didn’t necessarily fit in a neighborhood. In exchange, some developers argued, the rezoning to another category would allow county planners to require more stringent building and design standards, a situation ostensibly better for residents.
In recent years, though, residents have begun opposing such density and growth. Horry County now has defacto building moratoriums along parts of S.C 57 and S.C. 90 and leaders have indicated they won’t support single-family houses on lots smaller than 10,000 square feet. And rezoning requests that receive significant opposition from the public go nowhere more frequently.
With CFA’s density loophole closed, developers lose a bargaining chip and may have a tougher time getting rezoning requests through planning commission and county council. County leaders said they view the change as one way to slow the area’s rapid development, and dispute developer assertions that they’ve been shortchanged.
“It’s to try to slow the growth as well as be responsible by keeping things out of the wetlands,” said county council member Danny Hardee, whose district includes a significant amount of CFA-zoned land. “Anytime you change something it’s a change, I don’t call it a taking. Maybe it wasn’t done right to begin with.”
Changing the rules ‘in the middle of the game’
Some Horry County developers argued that the change county leaders made to CFA zoning amounts to a “taking,” a legal framework that gives property owners rights if the government overly-restricts their use of their land or takes it away outright.
Others argued that the change amounts to changing development rules “in the middle of the game.”
“When any regulatory agency changes the rules in the middle of the game…somebody that’s playing the game is going to be a little disappointed,” said Steven Strickland, an engineer with the development firm Earthworks Group. But, he added, “The one thing that we can depend on…is that the rules are going to change.”
Disgruntlement over the change to CFA zoning largely depends on if developers own, or are working on projects that include, CFA-zoned land. Developers like Mike Wooten, of DDC Engineers, said they’re not bothered by the change because it doesn’t affect them. Developers like Powell, though, are upset. He said the change directly affects a project he’s working on now, and that the change amounts to county leaders going back on a promise they made to landowners in the 1990s.
“County Council is completely correct that this density is something developers use as leverage,” Powell said. “You’d have guaranteed density, that was the intent. They’re going back on their promise.”
In the meantime, Lazarus, the possible candidate for county council chairman, expressed sympathy for the developers harmed by the change to CFA. Lazarus works with the development firm Waccamaw Land and Timber, but said the company doesn’t own anymore CFA-zoned land. Still, he called the change “a taking” and said county leaders need to respect property owners rights while they work to respond to public outcry and curb growth.
“As far as the intent…I don’t think I totally disagree with that,” Lazarus said. “(But the county) may have taken away their ability to sell their property or develop their property that was already under the zoning criteria. People have property rights and when you have a piece of property…you have an anticipation of what you can use it for and I think that’s going to cause some issues down the road.”
This story was originally published January 13, 2022 at 12:58 PM.
