S.796 - S.C. Building Codes Reform


The HBASC has worked with a number of groups to create the South Carolina Building Codes bill. The S.C. Building Codes bill would allow S.C. to join a national movement to a six year code adoption cycle from the current three year cycle. This state specific code would allow for a more efficient and effective code adoption process. The new code would be tailored to the safety and affordability of homeowners in South Carolina. A S.C. Building Codes would save homeowners thousands of dollars from unnecessary and frequent changes and allow for improved efficiency for builders, tradesmen, code officials and inspectors.


BE PRO BE PROUD S.C. WORK FORCE INITIATIVE


The continued funding of this initiative will allow the truck to stay on the road for many years to come informing parents and students about the fulfilling and high paying jobs available in the skilled trades that are in high demand right now.


SC HOME ATTAINABILITY


South Carolina is one of the hottest housing markets in the nation as frustrated buyers look for more affordable prices. The ability to find attainable housing, much less affordable housing, is an emerging issue that spans the state and impacts all. In 2020 a diverse coalition of organization representing employers, cities, and others joined together to host a housing forum. The goal was to create a significant, wide-ranging discussion on housing attainability and affordability. From these discussions we have determined a number of legislative goals to help every South Carolinian achieve the American Dream of home ownership. These include:


1. Property Tax Reform


Act 388 remade the property tax landscape in South Carolina—and not in an entirely positive way. The exceedingly light taxation of some classes of property has resulted in heavy, uncompetitive burdens on others. Intriguingly, legislation (Act 388) designed to reduce property tax burdens seem to have had little effect on overall local government reliance on property taxes as a percentage of revenue. The property tax share of local tax collections has been falling since the early 1990s, when local governments began receiving local sales tax authority, but the adoption of Act 388 in 2006 did not noticeably accelerate the trend, nor did property tax collections drop off. Like most taxes, property taxes have become higher over time. In inflation-adjusted the 6% property rate has significantly damaged affordable housing on renters and some homeowners. These disparities can be corrected in several ways;


• Narrowing Disparities in Assessment Ratios. South Carolina’s current property classification schedule imposes widely disparate assessment ratios on different classes of property, then exempts select property owners from feeling the brunt of those disparities. All residences should face the same assessment ratio, and, at the very least, the manufacturing and business personal property ratios require a downward adjustment.


• Reforming Property Tax Limitations. Assessment limitations create serious inequities, tie the hands of local governments, and influence decisions about whether to improve or sell a property. There is a range of options for relaxing or even repealing the assessment limitation while maintaining the protections of a rate limitation.


• Addressing the School Operating Costs Differential. The exclusion of the millage associated with school operating costs from taxes on primary residences yields extremely attractive effective rates for those properties, but at a cost in overall state competitiveness and, ultimately, in the ability to ensure appropriate levels of school funding. The Fort Mill School District recently imposed an $18k+ school impact fee, which severely affects home affordability, reduces housing options, increases rents and discriminates on socioeconomic lines. We need to provide options for rebalancing some of the inequities between different classes of property.


• Reducing Reliance on Personal Property Taxes. South Carolina imposes tangible personal property taxes on business machinery, equipment, and other movable property. These taxes are nonneutral and impose high compliance costs. We list options for reducing reliance on, or even eliminating, the taxation of tangible personal property.


2. Heirs Property Rights


• Heirs Property issues can lead to families losing their generational land due to land use restrictions, title issues and higher property taxes. These issues must be addressed to ensure their property rights and the highest use of family land.


3. FOIA for Permit Information Assist with Market Segmentation


• Consumer segmentation strategies can be used to identify the target consumers for attainable housing that will create multiple strategies with the private and public sectors that can be used to address housing needs. A consumer segmentation strategy will help define housing attainability problems more specifically.


• Expanded protection against the use of FOIA to access personal information for the purposes of commercial solicitation has caused “real estate information” to be deemed personal without compulsion.


• A change in law is needed to insure that “real estate information” can be easily accessed and needs addressed without the sharing of personal information.


4. Capping Regulatory Fees


• Regulatory fees account for up to 33% of the price of a house and more than 15% of these fees are in the form of taxes and fees paid to government entities. These fees and taxes dramatically drive up the cost of housing and make housing unaffordable for homeowners and renters.


• Most S.C. home buyers are disproportionately impacted by regulatory cost. For every $1 saved in regulatory costs the house price could be reduced by up to $2.


• Capping these regulatory fees would ensure that municipal governments still receive funding to cover their costs, while at the same time ensuring that housing can stay affordable for teachers, firefighters, police officers and working families.


5.  Gentrification


• Zoning, Design, and Aesthetic Controls are being used by some local jurisdictions to dictate purely aesthetic elements of single-family homes and duplexes, such as paint color, building materials, and interior layout and lot size. These types of requirements violate private property rights and severely affect home attainability/affordability.


6. Architectural Seal Requirements on Townhomes


• Due to one word in Statute 40-3-320 local building officials are requiring all townhomes be stamped with architectural seals even if the building was not designed by an architect. This oversight is now needlessly adding thousands of dollars to the price of townhomes, which the homeowner and/or renter must pay. The S.C. Building Codes and other statutes have all resolved this issue, but the word “detached” must be removed from 40-3-320 to alleviate this issue and mirror other statutes and regulations.


7. Requiring the Option of 3rd Party Inspections


• Throughout S.C., homeowners, developers and other landowners who need building code approvals are experiencing unprecedented delays in building code plan review and the scheduling and receipt of building code inspections. These delays result in significant cost increases, stifling the state’s economic growth, and affecting housing affordability. Due to several factors, many municipalities and counties are taking up to 30 days, and in some cases much longer, for plan reviews and the various inspections. Ultimately plan review deadlines and inspections often take ten times longer than expected costing all involved thousands of dollars per house in delays. This, coupled with the national trend of an aging code official population and the absence of younger participants entering the job pool through our colleges and tech schools, necessitates changing the regulatory structure in SC to allow more options and/or limits in the time needed for approval.