MOUNT PLEASANT — Building a home in South Carolina's fourth-largest city would cost hundreds of dollars more under an impact fee increase that received initial approval from Town Council on Tuesday.
Mount Pleasant already has some of the highest impact fees in South Carolina, adding more than $6,000 to the cost of every new home. Supporters of the fees say they are necessary to ensure the town's growth pays for itself, or at least comes close.
The change that received initial approval on a 5-4 vote would raise the impact fee for recreation. It's one of several impact fees but the recreation charge applies only to residential construction.
The increase, if it receives final approval next month, would add $380.93 to the cost of every new single-family home, and $247.88 to every multi-family unit. That's on top of the existing impact fees which exceed $6,100 per house.
“More and more people are moving here and we need to keep up so that we can serve our citizens," said Councilman Gary Santos. “This was just a way for the newer ones to help pay for that impact when they come in."
Builders pass such costs along to home buyers, and Mount Pleasant is already one of the more expensive housing markets in the greater Charleston area. The median price of a single-family home sold in Mount Pleasant this year — in the less expensive north end of the town — is $535,000 according to the Charleston Trident Realtors Association.
The move to increase the residential impact fee came the same night that Charleston County Council approved a November ballot referendum asking voters countywide if they'd be willing to pay extra property tax to create an affordable housing fund.
Mayor Will Haynie was among those voting against the fee increase. He said Mount Pleasant Waterworks declined to increase its impact fee this year due to the pandemic-driven recession, and the timing doesn't seem right.
Councilwoman Kathy Landing noted that the council's discussion on impact fees had previously included a reduction in a different impact fee, for transportation, in order to give commercial developments a break.
She said that without a related cut in the impact fees for commercial development, she wouldn't support the increase for residential development.
Impact fees are one way the fast-growing town has responded to growth and development that some residents and town officials perceived as out of control. Mount Pleasant's population has grown from roughly 30,000 in 1990 to more than 90,000 now.
Only Charleston, Columbia and North Charleston have larger municipal populations in South Carolina.
The fees are used to pay for new projects related to growth, not repairs or renovations. Town Chief Financial Officer Marcy Cotov said the proposed increase could generate about $57,000 yearly.
"This will generate more revenue from residential for recreation," said Councilwoman Guang Ming Whitley.
Santos emphasized several times that current town residents would not pay the fee, which is attached to building permits.
In 2017 the Town Council narrowly approved a huge increase in impact fees. Haynie, a council member at the time, voted against the fee changes because he thought they didn't go far enough, and that fees should be even higher.
That plan raised the impact fees for a single home from $1,860 in to $6,161. The fees for some large commercial developments increased by hundreds of thousands of dollars.
The impact fees, of which there are several, vary depending on the type of construction, the traffic it's expected to generate and other factors.