MOUNT PLEASANT — South Carolina's fourth-largest city has adopted controversial limits on the number of new homes that would be allowed each year, immediately slashing home construction by a third compared to recent years.
The rules were adopted after hours of debate, numerous amendments and pleas from home builders and real estate professionals to delay, change or reject the plan. They said the rules would drive up housing prices, cause economic harm to small home builders and town residents who work for them, and potentially get the town sued.
"This could ruin me, financially," said resident Jeff Meyer, who said he's been working on an 18-home development in the town.
Had the new permit allocation system been in place during the last five years, it would have reduced the number of homes built in Mount Pleasant by more than 2,000. The fast-growing town has about 88,000 residents, about 40,000 more than in 2000.
The rapid growth, and associated traffic and concerns about diminished quality of life, has caused a backlash from residents who over several years elected a new mayor and Town Council members who have pledged to restrain development.
"Many of you were elected with a clear mandate to control growth and improve infrastructure," resident Dennis Blyth told council members Tuesday. "The time is now."
The town already had tightened several development rules, put a moratorium on apartment developments and imposed some of the highest development impact fees in the state.
"If the town’s population rate of growth is not adequately managed, Town Council may be forced to either significantly increase property taxes to respond to service and infrastructure demands or reduce the present levels of service for town facilities and services," the permit ordinance adopted unanimously Tuesday night states.
Over the next five years, the town's new permit rules would allow a total of 2,400 permits for single-family homes or townhomes, 100 for accessory dwellings and 500 for multi-family units. But except for multi-family buildings, only a limited number of permits would be allowed every six months, with no more than 25 for any one development, in a bid to slow and steady the pace of development.
Add it all up, and that's 600 newly-permitted residences a year — mostly single-family homes — plus an expected 219 more homes that could be built yearly under existing, long-term development contracts with the developers of Carolina Park and Liberty Hill Farm.
The only time during the past two decades when Mount Pleasant saw so few new residences permitted annually occurred during the the housing-driven Great Recession, 2007 through 2010.
Several council members expressed concern the regulations needed more fine-tuning, but in the end, after several amendments, all nine voted to approve it. One key change was combining the number of permits for traditional single-family detached homes and attached homes such as townhouses, which the original proposal would have limited to just 60 per year.
Townhouses are generally more affordable than stand-alone houses, and townhouse developments take up less land. Councilman Bob Brimmer said allowing more permits to potentially be used for townhouses could "be a benefit, in terms of keeping Mount Pleasant greener."
Another amendment raised the price limit for affordable housing, which would be exempt from the permit limits.
When some council members expressed concerns, Mayor Will Haynie questioned their motives.
"Who have you listened to, to now feel like the work (on the ordinance) has not been done?" he said. "Who has scared you?"
Councilman Joe Bustos, a leading proponent of the permit limits, said the town spends more money providing services to each new residence than those residences generate in town taxes and fees. So, the town loses money every time a house is built, he said.
"To me, slowing growth is an important thing for this town," he said. "Otherwise, we are emptying the treasury."
Effective immediately, permits will be first-come, first-served, and construction work must begin within six months of a permit being issued or the permit will be forfeited. The number available is limited during every six-month cycle, except for multi-family permits because it could take a few years' worth of multi-family permits to build a single apartment building.
During the past five years, the town issued permits for 6,203 new residences. During the next five years, including 2019, slightly more than 4,000 residences may be built — 3,000 under the new permit rules and the rest from existing development agreements.
Multi-family construction, typically apartment buildings, would be particularly restricted. During the past five years, the town issued permits for more than 2,300 multi-family residences. In the next five, that would be slashed to 500, roughly enough for two apartment buildings.
Real estate organizations have decried the new limits and affordable housing advocates have raised concerns as well. In addition, the town's appointed Planning Commission voted unanimously in December to recommended that the ordinance be rejected by Town Council, which had unanimously approved it at an initial vote in November.
Planning Commission Vice Chair Roy Neal told council members Tuesday that he doesn't think accessory dwelling units — small secondary homes built on the same property as a larger home — should be covered by the permit limits.
There are some exceptions to the new permit caps. They are:
- The Carolina Park and Liberty Hill Farm subdivisions, because they have development agreements with the town.
- Low income housing, if any were to be built. The permit ordinance defines such housing as being affordable to those earning up to 120 percent of the median family income for the Charleston area. That means a home could sell for no more than $315,000, based on 2018 income limits. The median home price in the town is well above $500,000.
- Additions or renovations to a residence. Replacing a residence on a lot where a residence existed within the five years prior to an application would also be exempt.
This isn't the first time Mount Pleasant has put a limit on building permits. The town had a permit allocation system from 2001 into 2008, prompted by concerns that home construction was outpacing the town's ability to keep up with road improvements and public services.
"Unlike the plastics ban and some other things we've done, we're not reinventing the wheel here," said Haynie. "This is not uncharted territory for the town of Mount Pleasant."
In 2000 alone, more than 2,600 new residences were created in the town — more than the town's new permit allocation system would allow over four years.
When the recession arrived at the end of 2007 as the housing market crashed, requests for home-construction permits plunged and didn't rebound in Mount Pleasant until 2011. The town dropped the permit limits during those years and when the economy recovered, development came roaring back, so much so that nearly 10 times the number of permits were issued in 2016 as in 2009.
The resurgence of development restarted talk of permit limits, a discussion that's been going on for about five years and got into detailed discussions about six months ago.