State bill allows more local investment in workforce housing

SC lawmakers passed a bill this session that allows local governments to leverage tourism related tax dollars for affordable workforce housing projects.
Published: May. 31, 2023 at 5:08 PM EDT|Updated: May. 31, 2023 at 6:42 PM EDT
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CHARLESTON, S.C. (WCSC) - South Carolina lawmakers passed a bill this session that allows local governments to leverage tourism related tax dollars for affordable workforce housing projects.

A 2% hospitality and accommodations tax already applies to when visitors pay their bills at restaurants, bars and hotels. The taxes can be used for a variety of things including road improvements, water and sewer infrastructure, municipal centers, water and beach access, recreation and now workforce housing.

The bill lets local leaders decide if and how they want to use up to 15% of hospitality and accommodations revenue for affordable housing. Rep. JA Moore, D-Berkeley, Charleston, says this is another tool in the toolbox of addressing the housing crisis.

“What it allows for is the municipality to come up with creative ways in which to incentivize individuals to do affordable housing - they can do public private partnerships with private entity entities use the funds to be an equity partner in a development, or they can bring in revenue to them do affordable housing, they can do it on their own,” Moore explains.

The bill will be in effect for seven years until 2030. A task force is set to track statewide use of hospitality and accommodations taxes towards workforce housing and present a comprehensive report to the 2030 legislature. Then, leaders can decide to renew, adjust or end the bill.

As a hospitality business owner, Moore says he knows his employees’ need for housing where they wors.

“This affects all of us. This affects business owners. This affects customers and guests that go into restaurants because if you don’t have people working in those restaurants… you know? That housing is a basic need that we have to address. It’s important,” Moore says.

Moore says he doesn’t think the bill is perfect or the full solution, but he is excited about the potential it creates.

“I want to emphasize this isn’t the magic bullet. This isn’t the final step. This is just one tool that we can use in order to solve this crisis. We have a housing crisis in this in this region in this in this state. And this is a one of the ways in which we can kind of mitigate this shortage,” Moore says.

State Sen. Marlon Kimpson, D-Charleston County, says he first began working on affordable housing when he entered the senate in 2014. He says his first attempts at legislation weren’t successful, but now leaders see the need.

“Now every region of the state is impacted, so the legislature, the House and the Senate, have a greater appreciation of the problem and we have found a solution using existing tax dollars to address this very narrow focus problem for all of local government,” Kimpson explains.

In the bill, workforce and affordable housing is defined as people making 30% to 100% of the medial income for the local area. The bill directs local government to use the latest figures from the U.S. Housing and Urban Development.

“The bill really targets our nurses, students, professional services, hotel workers, and the housing is not public housing per se, where there are federal subsidies. These are homes that people would purchase,” Kimpson says.

The bill was generated in the Senate with Kimpson as a sponsor. Kimpson and Moore say this is a good step in giving local governments resources from increase tourism dollars to benefit the people of their cities.

“I think it’s a win-win for the existing recipients of the fund because if we have affordable housing then people who work in the hotels who work in the tourism industry won’t be late because they live in closer proximity to the job. And it’s a win win for local government who’ve been talking about doing something with regards to affordable housing. It’s a win win for the citizens because this is not a new tax is mostly borne by people traveling here who stay in hotels, and short term rentals,” Kimpson explains.

The bill went into effect when it was signed by Gov. McMaster on May 19.