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South Carolina REALTORS® Commission Analysis of Questionable Proposed Legislation

December 2018

In South Carolina’s 2018 legislative session, three separate pieces of legislation raised red flags to the South Carolina REALTORS® (SCR,) as matters requiring closer scrutiny. They ran the gamut from Inclusionary Zoning and a Clean Energy Act to homeowner insurance. Through the REALTOR® Party’s Land Use Initiative Program, the REALTORS® received a timely expert analysis to strengthen their position and planning.

Last fall, a bill called the South Carolina Inclusionary Zoning Act proposed that up to 30% of housing units within a multifamily or single-family development be sold or rented as affordable housing. Lindsay Jackson, SCR’s Government Affairs Director, explains that while affordable housing is a topic that often arises in a strong real estate market, sometimes inclusionary zoning initiatives can have an adverse effect, acting as a tax on housing construction that can be passed on to consumers, producers, and landowners. “For example, if a developer is required to rent or sell a percentage of their new housing units at below market prices, this can cause the remaining units to increase in price as they will have to make up the difference. As a result, such policies can actually exacerbate the affordability problem they’re trying to address.” A thorough analysis of the bill prompted SCR to conduct an in-depth statewide study looking at housing affordability and the impacts of mandated affordable housing; while the bill did not progress any further, Jackson says the REALTORS® will continue to work on the issue looking ahead to the 2019 session.

Early in 2018, a Clean Energy Act was proposed for the state of South Carolina, which would authorize local governments to enact ordinances that create clean energy zones, in which commercial property owners could secure private loans, funded through a property tax bill, to make clean energy improvements. SCR’s concerns regarding both the hybrid nature of the tax-loan, and the consumer protection issue of such a loan commanding first lien position, were confirmed and further analyzed by NAR consultants, who investigated negative results of similar legislation in the state of California.  The bill did not pass in the House due to time constraints, but SCR is prepared to continue supporting consumer protection and financing stability as it monitors the issue in the upcoming session.

A third bill that appeared objectionable to SCR proposed allowing counties to establish a windstorm protection and homeowners insurance program to assist with the cost of qualified wind resistance improvements. While especially sensitive to the needs of property owners in a state that was twice pummeled by major hurricanes this year, the REALTORS®’ concern was with the lien priority imposed by the type of lending proposed in the bill. Once again, there was no movement on this legislation in the 2018 session  “I expect to see all of these issues again in the 2019 session, so outcomes are ultimately still pending,” says Jackson, adding, “We’re well positioned to face them and work toward better solutions, thanks to this technical help we’ve received from the REALTOR® Party.”

She continues, “The services provided are an excellent resource for the SCR Government Affairs and Legal staff on issues that are important to our membership and the industry. The thorough and timely analyses of legislation that could potentially impact the industry are extremely beneficial during the legislative session. These products provide our team with the expert knowledge necessary to assist in the policy-making process.”

To learn more about how the South Carolina REALTORS® monitor and analyze property-rights and homeowner protection issues as they appear in proposals slated to come before the state legislature, contact Lindsay Jackson, Director of Government Affairs, at 803-07-2129.

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