Greenville County business leaders estimate the area’s road needs will exceed $1 billion over the next ten years.
As the county continues to fall behind on maintenance and infrastructure costs skyrocket, it also expects to welcome an estimated 200,000 new residents by 2040. To deal with the onslaught of motorists, county officials are discussing how to pay for growing congestion problems and crumbling roads.
An impact fee on new developments is one of the possible solutions.
The idea was publicly debated by the Council’s Planning and Development Committee. It has been adopted or contemplated elsewhere in Upstate as a partial solution to a growing road crisis.
Impact fees are set by a local government on new developments to pay for the increased cost of the services created. In South Carolina, impact fees were most commonly introduced to pay for road improvements. It can also be used to pay for parks, emergency services or schools. Fees must be limited in scope to projects that would serve this new development.
At the request of District 17 Councilman Joe Dill, the City Council Planning and Development Committee invited Chip Bentley, Associate Director of the Appalachian Council of Governments, to take a first look at impact fees in Greenville County.
No immediate action resulted from the presentation, but the discussion highlighted the county leadership’s growing concern about the condition of local roads given the unprecedented speed of development.
“We, who have been here all along, shouldn’t carry that burden,” Dill said. “I heard a lot from people during the (County Council) election saying we’re not keeping up with our roads. We are so far behind and need to look at options like that.”
The Greenville County road crisis was accelerated by the state Supreme Court’s June 2021 decision that invalidated a $10 increase in the county’s road maintenance fee for registered vehicles. As a result, the district had no immediate opportunity to recoup more than $7 million in road maintenance fees and the district shrank its road maintenance projects by 30 percent. It is planned to pave 29 miles of the county’s more than 1,700 miles of roads in fiscal 2022. A road maintenance list for fiscal year 2023 has not yet been finalized.
In Greenville County, new developments already have upfront sewer and water line installation fees paid that are typically paid by a developer at the time a building permit is approved. Impact fees would follow the same schedule, paid by developers and then likely billed to buyers at closing, Bentley said.
Those fees — and any new fees under consideration — increase the cost of new homes in a county where construction costs already threaten to price out the majority of potential homebuyers, said Michael Dey, vice president of government affairs at the Homebuilders Association of Greenville County. The group has opposed impact fees in the past and recently campaigned against proposed fees for Anderson School District One.
Rising house and land prices have already made new homes unaffordable for 68.5 percent of residents in the Greenville-Anderson metro area, according to a recent survey conducted by the National Association of Homebuilders in November 2021, Dey said.
If the county enacted a new $2,500 debiting fee, similar to sewer and water fees, it would further drive up construction costs while raising only a fraction of the amount the county needs to have one statewide making dents on road projects. said you.
These fees must also be used quickly, typically within three years, and are limited to the area affected by the development.
“Therefore, an impact fee for a development in one part of the county cannot be used to repair roads in another part of the county,” he said.
Chris Bailey, director of government affairs at the Greater Greenville Association of Realtors, said the organization is typically opposed to impact fees, although its stance has changed for some limited projects that directly benefit homeowners.
Impact fees hurt housing affordability and don’t generate enough revenue to fully cover street financing costs, he said.
Jason Zacher, director of government affairs at the Greenville Chamber of Commerce, said the chamber analyzes the issue of impact fees from both an infrastructure perspective and an affordable housing perspective.
“We’re discussing with stakeholders what the pros and cons would be, but we haven’t taken a position on (impact fees) one way or the other,” Zacher said.
Street funding will be a topic of discussion in chamber committees in the coming months, he said.
“As we continue to evolve, there are limited financial resources to absorb the growth we will see over the next 20 years and growth in property values will not fund the services and infrastructure we need to spend around 220,000 more people,” he said. “It just isn’t. We cannot continue what we have done.”
Impact Fees and Alternatives
Impact fees were upheld by the Supreme Court in 2006 as constitutional.
In South Carolina, Georgetown, Dorchester, Berkeley, Beaufort, York, Horry and Lancaster counties each have impact charges, as well as at least a dozen municipalities statewide, Bentley said.
In Easley State, the City of Easley passed a new impact fee in 2021 that is expected to add $8 million over five years for projects within the city. The city of Clemson is considering increasing its fees for new developments, while Anderson County this spring rejected a proposal to collect more than $11,000 in fees for new homes in Anderson School District One to help meet the cost of new schools .
Bailey of the Realtors Association said the county should reconsider a plan to impose a 1 percent statewide sales tax on paying roads. The county tried to introduce a penny sales tax for street funding in 2014, but voters turned it down.
It would take time to put together a proposal and promote a penny sales tax likely timed to coincide with the 2024 general election cycle, Bailey said.
“A broad-based funding source that’s recurring and stable and large enough to fund that is what it takes,” Bailey said. “You can add mark-up fees to new housing, but the reality is … it wouldn’t create the broad-based funding needed to really address the problem.”
A penny sales tax might be the ultimate best bet, Zacher said. Other county options include raising property taxes, charging for paying roads, or charging impact fees. Many of these solutions would not bring in the revenue needed to meet the county’s rising road infrastructure costs, he said.
Dey cited an estimated $1 billion in total road infrastructure needs in the county over the next ten years, including local, county and state road projects.
“The penny is going to have a very significant impact,” Dey said. “They need about $100 million a year for eight to 10 years to catch up.”
In 2014, studies showed that a dime sales tax would bring in nearly $70 million a year. That number would likely be closer to $80 million to $85 million, a significant portion of what the county needs to fund its road projects.
Raising the road maintenance fee or adding an impact fee could then provide the remaining funds needed to upgrade the county’s roads to a higher standard, Dey said.