MOUNT PLEASANT — Home prices in this East Cooper community have climbed so high that a large portion of the workforce lives elsewhere, and homes costing up to $285,000 can count as "workforce housing" under town rules.
Meeting those rules allows developments to avoid the town's strict limits on building permits, and can result in a rebate of certain impact fees. One company hopes to use the "workforce housing" provisions to build 42 condos on Winnowing Way at the north end of town, in what would be a first-of-its-kind development for Mount Pleasant.
Supporters say the condos would help reduce traffic, compared with an office building that had been planned on the site, while providing home ownership opportunities for people with incomes below the mid-point for the Charleston area. And 75-year deed restrictions would keep them relatively affordable for most of this century.
“We believe that, still, a majority of people would rather own than rent," said Tony Berry of TBC Development, which is seeking the town's approval. The company also built and sold the 240-unit Sage at 1240 apartment complex, across the street from the condo site, not far from where U.S. Highway 17 and S.C. Highway 41 meet.
Buyers' incomes could be no more than 80 percent of the area median income for the Charleston metro area. That works out to $43,650 for a single person, or $62,300 for a family of four.
Town officials have embraced the project, with the Planning Commission and Town Council both voting unanimously for a necessary land-use change. Final approval is up to council, where several members and Mayor Will Haynie had glowing comments about the plan at a meeting Tuesday.
"For those 42 families (who buy the proposed condos) it means the world," said Councilwoman Kathy Landing.
Haynie said the development shows that creating workforce housing is possible in the town. He also mentioned the plan during his State of the Town address Tuesday.
“We’re on the verge of a new, viable, attainable housing workforce development ... in the town ... that requires no public money," said the mayor in his live public address. "I think that’s worth a little bit of an applause.”
Home ownership in Mount Pleasant is a challenge because most single-family homes sold in the town last year cost more than a half-million dollars. Across the tri-county Charleston Metro Area the median price, where half the houses sold for more and half for less, was a more achievable $297,000 — and would be even lower if Mount Pleasant home sales were not included.
Condominiums generally cost much less than single-family homes, even in Mount Pleasant, where there are more than 50 for sale now at lower prices than the proposed workforce units. What Berry's company plans to do that's unusual for Mount Pleasant is to restrict sales to owner-occupants who meet income limits, and also restrict long-term resale prices to keep them affordable.
“There are no subsidies in this," Berry said. "This is a for-profit deal."
The restriction means that the only people who could buy them are those with moderate incomes who plan to live there. The long-term resale restrictions mean that if home prices double again in Mount Pleasant, as they have since the early 2000s, the condo prices would not, but would rise slowly to match inflation or wage gains.
While there are no direct subsidies, TBC could avoid more than $150,000 in Mount Pleasant impact fees by seeking a town grant that's available for workforce housing. With income caps, resale price limits, and condos that would sell for $212,000 for 1-bedroom units and up to $285,000 for 2-bedroom units, the project appears to meet the rule for the grant.
Berry said that while there are existing condos on the market for lower prices, most were built a decade or more ago, so their air-conditioning units, appliances and fixtures are that old, too.
“Most of the ones we are competing with were (apartment to condo) conversions," said Will Jenkinson, broker-in-charge with Carolina One New Homes, who is working with TBC. "They were built 20-plus years ago and have been through litigation, most of them, and have high assessments."
Condominium and apartment buildings in the greater Charleston area have been plagued by construction defects, and dozens have been involved in lawsuits. Condo owners often pay monthly special assessment bills when unexpected repairs are needed, in addition to regular monthly assessments that cover insurance, maintenance, and upkeep of buildings and common areas.
Berry said his company will hire third-party inspectors to make sure the proposed Gregorie Ferry Flats don't have problems, and will provide initial funding for a condo association.
"We will deliver them a quality product," he said. "We will have a reputable property manager, and a reserve fund."
The nonprofit group Housing for all Mount Pleasant would monitor and enforce the rules, and would collect a 1 percent fee on each sale.
Unlike some neighboring cities, Mount Pleasant does not build or maintain any affordable housing. The town has offered modest incentives to developers, with limited results.
In recent years, nonprofit groups have built some housing in Mount Pleasant, and for-profit developers built 10 homes and 27 apartments that met workforce guidelines, sometimes in exchange for zoning incentives.
That's fallen far short of the demand. The majority of workers at many of Mount Pleasant's largest employers, including the town government, live outside Mount Pleasant and commute to work. Hospitals, schools and retailers rely on workers who commute to town from places with more affordable housing.