Development impact fees have been used in many places, South Carolina being an exception, to help local governments keep pace with growing populations and their need for expanded infrastructure, including water and sewer lines and connections, roads, school buildings, parks and libraries.
South Carolina law allows such fees, but the S.C. Development Impact Fee Act is quite limiting. Only a handful of S.C. counties and municipalities collect impact fees. Horry County Council has directed the administration to develop recommendations on how the law might be made more workable. “It’s so limited and I believe it was kind of put together that way so we couldn’t use it,” Council Chairman Mark Lazarus said of the current law.
One can understand that point in the comments of Lawrence Langdale, legislative committee chairman for the Horry Georgetown Homebuilders Association, in a Dec. 3 report in The Sun News: “We wouldn’t support anything that would give them free rein in the use of those funds.” Langdale said the association generally supports impact fees under the current law, but he was skeptical about broadening the act. He correctly noted that ultimately homeowners pay developer impact fees.
The current law is so limiting that it does now allow impact fee revenue to pay for anything outside the development where the fees are applied. We understand that Carolina Forest homeowners would be rightly upset if money from their impact fees were used to widen a road in Little River. The current law is far more limiting. For example, impact fees cannot be used to expand a stormwater system that must handle increased volume from a new development. Or to expand access roads to a new development. A minimum capital investment of $100,000 is required, precluding purchase of a police cruiser.
Unincorporated Horry County has more than 53,000 single-family and multifamily residential units approved but not constructed. One huge development is on the former Bay Tree golf complex in Little River. Years after county approval and changes in ownership, preliminary work has been under way and residents are concerned about access to S.C. 9, U.S. 17 and S.C. 90.
At the other side of Little River, the Heather Glen golf course is closing and more housing is to be built on that property. These are only two examples of development that is projected to increase Horry County’s population to 423,000 in 2040, from 322,000 in 2016.
The 53,000 additional housing units in unincorporated Horry County do not include approved-but-not-built units in municipalities such as Aynor, Conway, Loris, Myrtle Beach, North Myrtle Beach and Surfside Beach. The City of Myrtle Beach collects impact fees for water and sanitary sewer connections and stormwater.
Horry County Council has taken a necessary initial step toward making the S.C. Development Impact Fee Act more workable. It’s evident that the 1999 law could be more flexible and we urge area legislators to include this issue in the 2018 session of the General Assembly.