Did You Know? The Upstate is a Global Community

Did you know that the Upstate is a global community?  There are more than 600 companies from 36 countries that call the Upstate home.

Inclusionary Zoning: Your HBA's position

How It Could Dramatically Increase the Cost of Market Rate Housing
Meeting the demand for affordable housing has long been a challenge in nearly every community in America. After all, home ownership remains a nearly guaranteed way for low- and moderate-income families to build wealth and improve their financial futures.

The solutions to the affordable housing problem are varied, but most involve some level of additional government intervention in the housing market which most observers agree usually contribute to lack of affordability, not improve it. One recently popular measure is inclusionary zoning.

What is it?
Inclusionary zoning occurs when local governments attempt to promote affordable housing through zoning that mandates that home builders sell a percentage of the homes built in new communities at prices that are below market rate.

Potential Problems:
By mandating a lower price for these homes, communities are directly impacting the value of land and restricting the rights of landowners to get the greatest possible return on their property. In addition, government is creating the potential for an automatic windfall for the buyers of these underpriced homes, which also must be regulated.

Another dilemma for property owners and home builders is the extra expense associated with complying with a inclusionary zoning ordinance. We may hope that home builders will just absorb these additional expenses, and lost income. In reality, they will pass them on in the form of higher prices for the remaining market-rate homes. That will have the effect of pushing a few families, on the edge of homeownership, into the group that will require assistance. It also will ultimately push higher the cost of housing throughout the community, further gentrifying the entire community. It is a slippery slope.

Supporting Studies:
The Reason Institute, in 2004, published a policy study, “Housing Supply and Affordability: Do Affordable Housing Mandates Work?” The Reason Institute study of 45 cities found that after passing an inclusionary zoning ordinance, the average city produced less than 15 affordable units per year, far less than the City of Greenville’s need. The study also found that new construction decreased by 31 percent following the adoption of an inclusionary zoning ordinance and the price of new homes in the median city increased by $22,000 to $44,000.

A recently updated study by the National Association of Home Builders found that regulatory compliance accounts for 29.4 percent of the price of a new home. In Greenville that comes to nearly $70,000 on an average newly-constructed home. Two thirds of that cost is found in the regulation of land development, which includes zoning. More significantly, the study found that the impact of regulation on the cost of housing has risen by 30 percent since 2011.

In a 2009 study by New York University, which also looked at California, specifically, San Francisco, as well as Boston, the study found that controlling for 27 variables in San Francisco and 24 variables in Boston, a detailed regression analysis indicated that in both areas there is evidence that inclusionary zoning constrains new development, particularly during periods of regional price appreciate. There is also strong evidence that implantation of region-wide inclusionary zoning put upward pressure on single-family home prices in the suburbs of Boston between 1987 and 2008.

Another study, by the National Center for Smart Growth Research at the University of Maryland, found in 2008 these measurable effect of inclusionary zoning laws in that state:

• Increased a city’s multifamily housing starts by 7 percent, essentially shifting production to multifamily from single family product; this effect increased to as much as 12 percent as inclusionary zoning requirements also increased
• Raised the price of new homes by 2 to 3 percent, and by as much as 5 percent for more expensive homes, compared to communities without inclusionary zoning
• Reduced the size of new homes by 48 square feet

The study found that these results all pass strong tests for statistical significance and are consistent with the economic theory that such programs act like a tax on housing construction. Just as with other taxes, the burdens of inclusionary zoning are passed on to housing consumers, producers, and landowners, and so such policies do not come without a cost. Given that more of the units built are multifamily, that the new homes sold are both smaller and costlier, the impacts show that inclusionary zoning means consumers of new housing pay more to get less. Some may argue that the price increases and size reductions seem relatively small, but to policymakers in areas where affordability is already a concern, a policy that moves at all in the direction of exacerbating a problem it is intended to solve would seem undesirable and ineffective.

The most recent research on the variety and effectiveness of different inclusionary zoning programs across the country comes from the Lincoln Institute of Land Policy’s report from 2014 titled “Achieving Lasting Affordability through Inclusionary Housing”, by Robert Hickey, Lisa Sturevant, and Emily Thaden. The paper pulled data from 307 programs across the country and focused on case studies for 20 of those programs. The case studies revealed that achieving lasting affordability requires more than simply setting long affordability periods, which has been a hallmark restriction in inclusionary zoning programs. “Strong legal mechanisms, carefully designed resale restrictions, pre-purchase and post-purchase stewardship practices, and strategic partnerships are important for ensuring that inclusionary properties continue to be sold or rented at affordable prices, and are not lost due to illegal sales, foreclosure, or lax rental management practices. Despite the acknowledged importance of stewardship, most jurisdictions report having insufficient resources for comprehensive stewardship and many have not adequately planned for long-term monitoring and stewardship of inclusionary housing units.” The Lincoln Land report found that while inclusionary zoning can create large numbers of affordable units in some communities, overall, they have had a relatively small impact on the supply of affordable housing nationwide. While differences in retention levels can be partially explained by program stewardship, differences in the production levels can be partially explained by local housing market conditions. Strong demand for market-rate housing has produced more affordable units compared to weaker housing markets.

Additional Questions:
This type of zoning gives rise to many other questions and concerns:

• Would a more comprehensive approach to the affordable housing problem, that examined infrastructure needs and growth patterns, be more effective than simply targeting new subdivisions?
• What if we rethought our overall zoning and planning policies which have inflated land values and caused the scarcity of affordable housing?
• What if home builders choose not to accept the higher cost and lower profit of working in an inclusionary zoning environment and build somewhere else to meet demand for housing?

Our Position:
It is the position of the Home Builders Association of Greenville that creating affordable housing and homeownership for every socio-economic class is absolutely necessary. But additional regulations only produce additional costs for those who buy homes without government assistance. What is needed is a comprehensive approach, not a new regulation.



Board of Directors, Home Builders Association of Greenville
Adopted March 21, 2017

2017 Golf Classic- May 4th. Sponsored by Progress Lighting.

Your Home Builders Association will host its annual Golf Classic on Thursday, May 4, at The Preserve at Verdae Golf Course. The golf tournament is sponsored by  Progress Lighting and presented by Piedmont Natural Gas. 

 

The Golf Classic is Captain's Choice Format.  Shotgun Start begins at 11:30 a.m..  Lunch is provided for each registered player and volunteer.  Following the golf tournament, an awards banquet will include dinner sponsored by Clark's Termite and Pest Control and prizes.  Don't miss the chance to win a NEW GM vehicle with a hole-in-one at the designated hole, sponsored by Kevin Whitaker Chevrolet. 

  Team, sponsorship, and prize opportunities are available.  Reserve your team now- click here to register/pay online or Here to print the form.

Volunteers NEEDED:  

Please click here if you can help with registration, set up, or tear down.

LLR action clarifies a licensed builder's qualifications

The S.C. Department of Labor, Licensing, and Regulation (LLR) will be sending out the following notice to all building officials in SC.

***
Dear Code Officials:

Many local codes departments in South Carolina require a Residential Specialty Contractor license/registration in Electrical, Plumbing, or HVAC before issuing a permit for this type of work. In the past, the Commission has issued such licenses/registrations to licensed Residential Builders. Please note, however, that S.C. Code Ann. § 40-59-20(7) specifically states that a residential specialty contractor may not be a licensed residential builder. Therefore, in accordance with the law, the Commission will no longer issue Residential Specialty Contactor licenses/registrations to Residential Builders.

The S.C. Residential Builders exam tests builder applicants on the three mechanical trades of Electrical, Plumbing, and HVAC. Therefore, a Residential Builder who received his or her license by exam is qualified to perform work in these trades and will have the designation "RBB" on his or her license and will have as the "Home Builders" as the license type on LLR licensee lookup.

The Commission also licenses Residential Builders without exam in three instances: (1) a passing score on the NASCLA exam; (2) a license issued by the SC Contractors Board; or (3) a license from a state with whom the Commission has an exam waiver agreement. A Residential Builder who received his or her license without exam is not qualified to perform work in the mechanical trades and will have the designation "RB" on his or her license as well as license type on LLR licensee lookup. RB Exam Waiver licensees must subcontract with an appropriately licensed person or company to perform any of the mechanical trades on a project.

I hope this clarifies any questions you may have. Please feel free to contact the Commission with any issues that may arise.
***

This is not a new policy and does not change any licensing requirements. This issue has been brought up several times in the last few months (either a local municipality trying to exact additional business license fees, or builders who have had their license suspended trying to usurp the suspension).

Mark your calendars for the Annual Golf Classic- May 4th

Your Home Builders Association will host its annual Golf Classic on Thursday, May 4, at The Preserve at Verdae Golf Course. The golf tournament is sponsored by Progress Lighting and Piedmont Natural Gas. 

The Golf Classic is Captain's Choice Format.  Shotgun Start begins at 11:30 a.m..  Lunch is provided for each registered player and volunteer.  Following the golf tournament, an awards banquet will include dinner sponsored by Clark's Termite and Pest Control.  Don't miss the chance to win a NEW GM vehicle with a hole-in-one at the designated hole, sponsored by Kevin Whitaker Chevrolet.

May the Fourth be with you on May 4! Team and sponsorship opportunities are available.  Reserve your team now.  Or contact your HBA office to register.

Volunteers NEEDED: We also will have a need for volunteers.  If you would like to participate as a volunteer, please contact the HBA office at 864-254-0133 or email Crystal Yanes.

Limited Time 10% + 2% Discount for NAHB Members from Lowe's

Lowe's has announced a special offer for the next three days. Please forward out this offer to your members so they can take advantage of this temporary larger discount.

Limited Time 10% + 2% Discount for NAHB Members from Lowe's

March 21st through March 23rd NAHB Members should print out this coupon and save 10% on your Lowe's Account Receivable (LAR) and Lowe's Business Account (LBA). Visitwww.LowesForPros.com/NAHB and register to save an additional 2% off of your LAR or LBA and free delivery on purchases of $500 or more**.

If you miss this limited time offer, visit www.LowesForPros.com/NAHB and register to save 5% every day when using Lowe's credit, plus for NAHB members LAR/LBA accounts are both eligible to receive the additional 2% statement discount*.

*Offer is not automatic, see store for details. Terms and conditions apply.
**Exclusions and standard delivery rules apply, discount taken at time of purchase, see store for details.

Save Money -- and Buy a Shiney New Car or Tool

Are you buying a new car, truck, or fleet vehicle? Do you use Lowe's ProServices? Do you rent vehicles from Budget, Hertz, or Avis? 

Your Home Builders Association of Greenville membership can save you money on these national brands and more through the Member Advantage program. 

It's Simple

Get your proof of membership form using your NAHB login information. Print the form and bring it with you to your GM, Chrysler, Dodge, Fiat, Jeep, or Ram dealer to get a significant discount on your next vehicle purchase. 

It's Everywhere

There are more than 20 national companies that participate in the Member Advantage program. Click here to see a full list of companies that engage in the program, including phone numbers and program codes.

And these are not insignificant savings: Home Builders Association membership means an additional 2 percent off Lowe’s ProServices and free shipping for large orders. In fact, the average savings in the Lowe’s program amounted to $1,700 per member in 2015.

Builders and remodelers are also signing up for the specialized support now available only to Home Builders Association of Greenville members through a new strategic alliance with Houzz that includes a free profile adorned with your membership badge.

Download a complete list of discounts to see the savings available.