ReWa Approves New Account Fee Schedule

NAF changes apply to multifamily, mixed-use projects
Changes apply to fees paid on or after January 1, 2019

At its regular board meeting in July, ReWa approved changes and increases to New Account Fees (NAF) for mulifamily and mixed-used projects. According to ReWa staff, the new fee schedule better assesses the cost of serving these larger developments, particularly mixed-use developments that include commercial activities.

The new fee schedule does not impact single-family residential developments.

Your home builders association was consulted on the proposal before it was submitted to the ReWa board.

New Account Fees for Multifamily and Mixed-Use ProjectsAll new account fees are currently based on meter size; however, this creates an inequity among customer classes. To address this inequity, ReWa will assess multi-family and mixed use new account fees based on the estimated daily wastewater flows as provided by the South Carolina Department of Health and Environmental Control Regulation 61-67, Appendix A-Unit Contributory Loadings to All Domestic Wastewater Treatment Facilities (UCL). The estimated daily wastewater flow would be multiplied by the capacity cost per gallon of $8.33, which is based on the current new account fee of $2,500 for single-family homes with a 5/8” meter divided by the 300 gallons capacity per day per the UCL.

The table below shows the flow and the respective proposed new account fees for multi-family housing per unit.

Multi-Family Housing	Flow (gpd)	NAF
Three (3) Bedrooms (Per Unit)	300	$2,500
Two (2) Bedrooms (Per Unit)	225	$1,875
One (1) Bedrooms (Per Unit)	150	$1,250

The table below presents a sample multi-family housing new account fee calculation using the proposed methodology.

Sample Multi-Family Housing	Units	Flow (gpd)	Cost per Gal. per day	NAF
Three Bedroom Apartments	10	3,000	$ 8.33	$  25,000
Two Bedroom Apartments	50	11,250	8.33	93,750
One Bedroom Apartments	30	4,500	8.33	37,500
Total New Account Fee	90			$  156,250

When the multi-family housing project is submitted to ReWa’s engineering department for review, the number of residential units and associated number of bedrooms per unit will need to be clearly identified on the plans and shown in the design calculations. In cases where the bedrooms are unknown, ReWa will charge a $2,500 per unit fee and when the bedrooms are confirmed, the developer or engineer may request a refund, if applicable. The table below shows a sample mixed use property new account fee calculation using the proposed methodology. 

Sample Mixed Use Property	Units	Flow (gpd)	Cost per Gal. per day	NAF
Two Bedroom Condos	12	2,700	$ 8.33	$  22,500
Restaurant w/ 75 Seats	1	2,250	8.33	18,750
Office / Retail w/ 15 Employees	1	285	8.33	2,375
Total New Account Fee	14			$  43,625

When a mixed use project is submitted, in addition to identifying the residential units, commercial sites along with their projected use should also be identified on the plans. In cases where specific tenant information is not known at the time the project is submitted, the developer is to submit his best guess for the tenant and the applicable UCL. Prior to occupancy, the developer or engineer is to coordinate with ReWa’s engineering department to ensure that the original plans and fees submitted still match what is actually in place. At this time, if applicable, ReWa would refund fees or the developer would pay additional fees.

The effective date for these changes is January 1, 2019. Fees on developments previously approved but not yet paid at January 1, 2019 will be calculated based on the above methodology.

Average Impact Fee in South Carolina: $6,555

Did you know that the average impact fee assessed on a new home in South Carolina is $6,555?  Read the full article at Eye On Housing by clicking here.  According to NAHB, most of that fee is assessed for water and sewer services.  Click here to read the full report.

HBASC announces 2012 Housing Advocacy Agenda

Your Home Builders Association of South Carolina announced the Housing Advocacy Agenda for 2012 following its annual Legislative Conference in Columbia on November 9.

1. Multi-lot Discount: Allow for a grace period for annual re-certification to reduce risk of losing property tax discount, and increase from 5 to 8 the years the discount is available due to the economic downturn. Bill up in Senate. 
2. Reverse Anti-Economic Development Case: SC Supreme Court decision said any discharge into the environment must be permitted, and anyone can have standing in the case. Ominous decision for land development & construction – permit nightmare! Bill to be introduced. 
3. IECC 2009 Adoption: The PURC Advisory Committee is scheduled to move forward with recommendations to the General Assembly to adopt the IEEC 2009 energy code. Bill to be introduced. 
4. Immigration Reform: There is new political pressure in our state due to concerns over the Hispanic growing population in the US. We would anticipate that immigration reform legislation may have to be introduced if the Court rules against the recently passed state law - similar to the Arizona law. Bill challenged in court! 
5. Impact Fees: HBA has to defend the state impact fee law every year every year, as some areas of the state continue to push for school impact fees, and more liberal interpretation of our state’s impact fee law. Recent court action helped! 
6. Comprehensive Tax Reform: General Assembly will possibly pursue a comprehensive review of taxes in 2012 based on some of the TRAC Committee recommendations with additions, deletions, and changes to the SC tax code. Tax reform bill likely be introduced. 
7. Private Transfer Fees: A bill was passed last session to ban the use of private transfer fees in SC. Bill will be up for passage in Senate in 2012. 
8. Labor Unions Expand Their Influence: Business interests are concerned that labor unions will attempt to undermine our right-to-work state by state and federal legislation.

Watch for Calls to Action from your Home Builders Association in support of these housing-related public policy issues.

On School Impact Fees

Editor's Note: Last week HBA of Greenville Executive Vice President Michael Dey and Greater Greenville Association of REALTORS® Chief Executive Office Nick Sabatine co-authored an editorial that appeared in the Greenville News. It is reprinted here:

Before proceeding with a proposal to impose a development impact fee on new homes built in Greenville County, the Greenville County School Board of Trustees should give consideration to the following facts about impact fees:

• Home Builders and Developers do not pay impact fees; the buyers of the homes in the communities they build pay the fees, which will have a negative impact on the ability of young home buyers who are expected to dominate the new home market in the coming decade.
• Any buyer of any new home and the owners of existing homes, who add on to their home, even if they do not have children in school, will be required to pay the impact fee. However, the buyer of an existing home will not be assed an impact fee, even if they have children in school.
• The “South Carolina Development Impact Fee Act” (SC 6-1-190) specifically lists seven public facilities that are eligible to receive funding from development impact fees. Eligible public facilities include roads, parks, and libraries. Specifically excluded from the list are schools.
• When the school board begins assessing an impact fee, consider that those homeowners who pay the fee will be inclined to oppose a bond referendum or millage increase - both of which raise far more money than an impact fee - because they have paid for their burden on the school system.
  

The Greenville County School Board of Trustees also should consider the fact that in Greenville, South Carolina, new housing pays for itself, and quickly. In fact, according to two studies conducted by Dr. Elliott Eisenberg of the National Association of Homes Builders, new homes actually subsidize existing homes through their contribution to the local tax base.

In 2008, Home Builders in Greenville County built 1,852 new single-family homes. The impact of those homes on Greenville County include: Local income for workers was $308.8 million; Taxes and fees for local governments was $51.2 million; and local jobs created was 5,388.

Imagine first the condition our local school board’s budget would be in if housing production were able to rebound. Now imagine the effect an impact fee will have on new home construction in the future.

In addition to the effect that new home construction has on our local economy and tax collections, homes continue to benefit our community after they are built. The homes built in 2008 have continued to benefit our local economy and governments by contributing $45.1 million per year in local income to workers and $12.3 million in taxes and fees to local governments, while supporting 879 local jobs.

The question we have for our local school board trustees is on what basis do you conclude that new homes are not contributing fully to the demands they place on the school system and other local governments? Based on the studies we referenced, the following are facts:

• By the end of the first year after 1,852 new homes were built in 2008, economic impacts of constructing those homes offset all fiscal costs of serving those new homes, including all infrastructure costs like schools.
• Since the second year, those same new homes have been contributing NET INCOME to local governments, like the Greenville County School System, of more than $2 million per year.
• After 10 years, those new homes will have contributed NET INCOME to local governments of more than $25 million.
  

Even in the peak years of home building, the rate at which home building pays for its impact on government facilities was similar to 2008.

We caution our local school board trustees that adding a tax on new construction would actually hurt revenues for local schools, not help them.

Nick Sabatine, Chief Executive Officer
Greater Greenville Association of REALTORS®

Michael Dey, Executive Vice President
Home Builders Association of Greenville

HBA Legislative Agenda to focus on taxes and fees paid by Home Builders

The HBA of South Carolina announced its legislative agenda for 2011. Click here to read the entire agenda.

Central to the agenda are four issues where your Home Builders Association has set out to directly save home builders money.

Multi-Lot Discount
The Multi-Lot Discount benefits builders and developers who hold at least 10 finished lots that have not yet been improved with a house. The program discounts the value of the lots to its pre-development value until a house is constructed on the lot.

When this program was implemented in the late 90s, the result of the legislative efforts of your Home Builders Association, the maximum time a lot could benefit from the discount was five years. At that time no one could imagine a housing downturn like we have recently experienced.

As a result, the HBA of South Carolina will lobby to extend to seven years the amount of time a builder or developer can qualify for the discount.

Impact Fees
Continue to defend this crucial statute, which your Home Builders Association lobbied for passage in the late 90s. This law insures that impact fees are proportionate to the impact that development has on government infrastructure and also insures that impact fees are not collected for a purpose for which development does not have an impact.

Each year government work to chip away at this important law. Efforts are underway in several jurisdictions, primarily along the coast, to water down this law. Your Home Builders Association will take steps to protect the law and strengthen where appropriate.

Multiple Business Licenses
Your Home Builders Association of Greenville, along with other HBAs around the state, have called on the HBA of South Carolina to address a trend in local government of taxing businesses multiple times on the same volume of business. The HBA of South Carolina will work to pass a simple, more predictable method of assessing and collecting business license fees in South Carolina.

Local Government Regulatory Reform
Local governments have increasingly raised fees and permit charges on the construction industry to increase funding generated. The increases can be found in tap fees, sewer connection charges, and road maintenance and expansion fees. Your Home Builders Association will work to curb this growth in fees and apply the same principals to government regulatory fees that were applied to development impact fees.

You can click here to read the entire Home Builders Legislative Agenda.

Bird Supper
A key way that you can participate in this legislative program is to attend the Bird Supper. This event is where Home Builders from around the state come together to talk to their legislators about this legislative agenda.

When: Wednesday, March 23
Where: Columbia, SC

New Study Shows American Dream Under Threat from Excessive Regulation

ST. LOUIS, Oct. 6, 2010 — New research from Demographia, an international public policy consulting firm, shows that the American Dream of home ownership has all but ended in some metropolitan areas.

The just released Demographia Residential Land & Regulation Index shows, for example, that new house costs have skyrocketed in San Diego as a result of land and regulation costs, which have risen to 13 times normal. In four other metropolitan areas (Minneapolis-St. Paul, Portland, Seattle and Washington-Baltimore) land and regulatory costs have risen from two to six times normal. In contrast, land and regulation costs in six metropolitan areas (Atlanta, Dallas-Fort Worth, Houston, Indianapolis, Raleigh-Durham and St. Louis) remain at historic normal levels.

The increase in land and regulation cost is estimated to have added $220,000 to the price of entry-level new housing in San Diego and from $29,000 in Minneapolis-St. Paul to $74,000 in Washington-Baltimore. “Excessive regulations have driven house prices up strongly in some metropolitan areas, where the American Dream of home ownership could become a thing of the past,” said Wendell Cox, principal of Demographia. He added that “in other metropolitan areas, the Dream of home ownership remains alive and it is not surprising that households are flocking to these areas.”

Cox went on to say that “this massive loss in housing affordability was an unanticipated consequence of regulations that have imposed urban growth boundaries, building moratoria, excessively expensive development impact fees and bureaucratic processes.” Before the restrictive regulations were imposed, there was little difference in new or existing house prices relative to incomes among the nation’s metropolitan areas.

More restrictive regulations often go by the innocent sounding labels of “smart growth” and “growth management,” however these regulations are routinely adopted without any consideration of the longer term impacts on housing affordability and the standard of living for average Americans. These impacts are particularly ominous given the recession, proposals for higher tax increases, and the possibility that job creation and economic growth may be less robust in the future.

Economic research has documented the association between more restrictive land use regulations and house prices. This reduces the standard of living by leaving less household income for other needs. Just as importantly, more restrictive land use regulations tend to reduce job creation and economic growth in the metropolitan areas where implemented.


Read the entire report by clicking here.

HBA of South Carolina and Charleston Jointly Sue Dorchester School District Over Impact Fee

The Home Builders Association of South Carolina and the Charleston-Trident Home Builders Association have initiated legal action against Dorchester County School District 2 challenging an impact fee resulting from special legislation adopted by the General Assembly in 2009. Both associations allege that the special law, and the fee, are in violation of the Constitution of the State of South Carolina.

In 2009 the General Assembly adopted special legislation sponsored by Senator Mike Rose allowing Dorchester County School District 2 to impose a $2,500 impact fee on new homes. “We believe this violates the constitution because it gives only one school district the authority to collect the tax,” Phillip Ford, Executive Vice President of the Charleston-Trident Home Builders Association, said.

“The state’s constitution is very clear in prohibiting special legislation that applies to only one county, city, or school district,” Ford said. “It is unfortunate that we have to take this action, but it is important that all South Carolinians challenge their government when they believe their government has made a mistake,” Ford said. “We believe it is important to insure that our public schools have adequate funding to meet their needs and mandates, but we also believe that those funds should come to them from legal sources.”

“Regardless of the schools need for funding, our constitution protects citizens from this type of special legislation when a general law provides guidance for the state as a whole,” said Mark Nix, Executive Director of the Home Builders Association of South Carolina.

The lawsuit will be filed on September 29 in Dorchester County Court of Common Pleas.