MOUNT PLEASANT — One of the fastest-growing places in South Carolina is seeing signs of a home construction slowdown, easing concerns that an annual limit on building permits is necessary while raising worries about the town's revenue.
Two of four council members at a committee meeting this week, Tom O'Rourke and G.M. Whitley, said the town may need to raise taxes if revenue-generating development slows.
The subject of the committee meeting was growth management and Councilman Joe Bustos' years-long effort to reinstate an annual limit on building permits. But the takeaway was that home construction may not need managing right now.
“It’s easy to get emotional and look around town and say that things are spiraling out of control," said Councilman Bob Brimmer. "I think market forces are tapping the brakes on development.”
Driving around Mount Pleasant, it might be hard to imagine development is slowing. This year, the town expects to see nearly 2,000 new residences constructed, the most since 2000, but town officials say the development pipeline appears to be turning from a gusher to a trickle.
According to Planning Director Jeff Ulma, during the past three quarters — the nine months ending March 31 — the town approved just 61 lots for new single-family homes. During the previous three quarters, there were 588. During the three quarters before that, which would be the first nine months of 2016, there were 677.
“Do we need a permit allocation program? I think we’re entering one of those periods where housing is going to slow on its own," Bustos said after Ulma's presentation Wednesday.
The last time Mount Pleasant launched a permit allocation program was at the end of 2000, a year when 2,618 residences were constructed, increasing the number of homes in the town by nearly 14 percent in a single year.
Building permits were restricted until 2007, the year the Great Recession and the housing market meltdown began.
As rapid growth resumed after the recession — no city east of the Mississippi grew as quickly as Mount Pleasant did in 2015 — Town Council responded with a moratorium on apartment construction and sharply increased development impact fees.
The town expects to have about 40,000 residences by the end of this year and thousands more have been approved. But if some early indicators prove correct, the desire to build more houses is waning. So far, the slowdown has only been observed with single-family homes.
The Planning Committee decided to have the town staff go ahead and design a permit allocation program in case one is needed but backed away from any plan to implement one.
“Having that ready to go would give you speed if you need it," Town Administrator Eric DeMoura told the four council members on the committee.
O'Rourke and Whitley, both serving their first terms on council, said the town needs to prepare for a shift away from reliance on growth-related revenue.
"We might have to raise taxes," said Whitley, echoing a similar comment from O'Rourke.
Bustos said the town needs “some mechanism so that we can control growth, if need be, but we’re not going to slam the door too quick, because we need money.”