Multifamily housing developments with retail reduce traffic, increases tax revenue for cities

A rendering shows "The Boulevard" building in Mount Pleasant, South Carolina.   Photo courtesy The Boulevard

As the Charleston metro region grapples with explosive population growth, one expert warns that policies limiting denser housing developments could hinder efforts to create more affordable housing.

“We typically support high density developments, simply because it provides more bang for the buck,” Debby Waid, chief program officer with the South Carolina Community Loan Fund, told Palmetto Business Daily. “Overall, the projects are less expensive to develop, and they provide a better range of housing opportunities for various level of income people.”

Efforts by developers in the region to create “infill” projects — buying up existing lots and proposing larger buildings at the site, particularly for housing — have been met with mixed reactions throughout Charleston County. In the town of Mount Pleasant, a move to change city height restrictions to allow for renewed development initially found wide support among the council. After some of the flagship projects were completed — such as the The Boulevard apartment building— it led to a complete reversal of many of the code changes. One of the criticisms the Boulevard project, in particular, was that there was no mandate to build affordable units.

Dan Doyle, vice president of development for the Beach Company, which previously owned The Boulevard, told Palmetto Business Daily that "affordability" requires some kind of offsetting investment by the city in order to happen. Though he said this can be the result of tax abatement or direct cash subsidies from the local government, Doyle said allowing greater density in exchange for affordable units presents a virtually cost-free way for cities and counties to make the economics of such housing work for developers.

"Believe me, it's the right thing to do, and we need to have more (affordable housing), but oftentimes it's the lender that has to stand behind it," Doyle said. "If the numbers don't pencil at the end of the day, it's very hard to get a project like that over the finish line. Oftentimes there is some type of subsidy that bridges that (lending) gap, and that gap can may be be bridged by allowing for higher density."

Yet in Mount Pleasant, the town council went as far as to approve a six-month moratorium on all residential development in April, citing concerns over traffic, among others. The measure was called "misguided" by the The Post and Courier, but many on the council argued that it should be even longer. An effort earlier this month to extend the moratorium by another 120 days was narrowly defeated.

“These denser neighborhoods, especially neighborhoods that are nearby community services such as grocery stores, pharmacies, schools and things like that, will reduce the traffic typically associated with high density areas,” Waid said.

Residents have also typically expressed concern over changes to the neighborhood, a call that is typically tied to a perception of affordable housing and dense housing as lower-income. The HUD guidelines used to define housing as “affordable” typically includes household earning up to 120 percent of the median income of the area — $81,840 in Charleston County. Since the early 20th century, the U.S. has considered 30 percent or less of a person’s income directed toward housing to be “affordable.”

“Depending on the community or county, they consider (100 to 120 percent of median income) to be ‘affordable’ as well,” Waid said. “Housing for young professionals who are just starting out — police officers, firemen, teachers — are people who make more than the median income, but not enough for market rate housing.”

Waid said a number of opponents to affordable and dense housing express concern over property values, which she considers unfounded. While increased density tends to slow value growth, she said, it rarely causes an actual drop. She tells the story of her work with a former employer, bringing 72 affordable housing apartments to Daniel’s Island, north of Charleston. Residents, she said, feared a spike in crime, decreased values and even the destruction of the fabric of the community with its appearance.

“Everything they accused that development of being turned out to be false,” Waid said. “It’s just a fear people have; and when they talk to each other, it kind of increases that fear. In reality, it just doesn’t happen.”

In addition to the ability to avoid direct, taxpayer-funded subsidies, Doyle said increasing density helps control city costs. Moving residents in to a physically smaller space allows the city to spend more efficiently on infrastructure projects, such as additional road or sewer maintenance, compared to surburban-style "sprawl" development, in which there is lower density but the boundaries of the city are expanded. He argued that this effect is only amplified as cities realize more tax money per acre from the denser developments.

"It essentially allows a concentration of city services in one specific location, whether it was police, fire, sanitation, schools or what have you ... those denser developments pay for themselves and then some," Doyle said. "Whereas something that may be more spread out further from the city center might end up having a net cost."

Doyle ultimately echoed Waid statements, saying that though projects vary in scale and impact, increased density often provides a great value to more than just the city, but to the community as a whole.

"From a community standpoint, there is significant value there," he said.

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Organizations in this Story

South Carolina Community Loan Fund The Beach Company Town of Mt. Pleasant

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