If enacted, the bill would grant local governments new powers to mitigate the effects of gentrification by creating a financial mechanism through the impact fees. The collected fees are designed to fund the Gentrification Trust Fund, which will be allocated to assist displaced individuals and groups, thereby directly addressing the financial burdens caused by rising property values and rental prices. Each year, the General Assembly is required to allocate a minimum of five million dollars to this trust fund, enhancing its sustainability and outreach.
House Bill 4008 aims to amend the South Carolina Code of Laws to authorize counties and municipalities to impose a one-time impact fee on private developers for each new residential and commercial unit constructed. This fee, which is set at a minimum of six percent of the project's total cost, is intended to support the South Carolina Gentrification Trust Fund. This fund is specifically aimed at providing financial assistance for individuals who are low-income or fixed-income and have been adversely affected by gentrification, a significant issue in various regions of South Carolina as urban development expands.
There are potential points of contention regarding this bill. Some developers may see the imposed impact fee as an additional financial burden that could deter new construction projects, particularly in areas where profit margins are already thin. Conversely, advocates for low-income communities may argue that the exemption for developers dedicating at least fifteen percent of their projects to affordable housing could be too lenient, leading to insufficient contributions to the trust fund intended for those displaced by gentrification. This raises questions about how effectively the bill will balance the interests of economic development with the needs of vulnerable populations.
The bill's enactment will take effect upon approval by the Governor and will apply to new constructions that have yet to receive a certificate of occupancy at the time of its approval. This stipulation ensures that the bill's provisions affect ongoing and future developments, making it a pivotal regulation for shaping housing policy in South Carolina.