Hilton Head Island cost of living tops in the state; wages don’t keep up

You live and work in Greenville.

You’re happy with your lifestyle — your car, your home, your hobbies, the restaurants you eat in — but you also love the beach.

You decide to move to Hilton Head Island.

Before you ask your neighbor for help packing, keep this in mind: To maintain the lifestyle you enjoy in Greenville, your job on the island will have to come with a 16 percent pay increase.

Hilton Head’s cost of living is the highest in state, according to the annual cost-of-living index developed by the Council for Community and Economic Research and compiled by the S.C. Department of Commerce.

The index factors in the cost of housing, transportation, grocery items, utilities, health care and miscellaneous goods and services.

Seven South Carolina cities are included in the index: Hilton Head Island, Beaufort, Myrtle Beach, Greenville, Anderson and Charleston. Bluffton is not.

The index pegs the national average for cost of living at 100.

The cost-of-living index score for South Carolina as a whole is 97.5.

Locally, Hilton Head Island scores a 109.

Beaufort comes in just under the national average at 99.2, meaning that same Greenville worker would need about a six percent raise to maintain that lifestyle in Beaufort.

“Living costs are a factor that anyone moving here would look at,” Don Kirkman, executive director of the Hilton Head Island Economic Development Corp., said earlier this week.

“Housing costs in particular are a significant challenge” for working people considering a move to Hilton Head, he said.

The data suggests Kirkman is right.

The single biggest driver of cost of living, both on the island and statewide, is housing — and housing on Hilton Head Island is expensive.

In 2015, Hilton Head’s median list price for a home was highest in the state at $276,900, according to South Carolina Realtors’ annual market report.

The average list price for a home in Beaufort was $169,900.

Rent and mortgage payments on the island are 9 percent higher than the national average and at least 30 percent more expensive than in Greenville, Columbia or Myrtle Beach, accoding to the index.

“It is housing more than anything else that is a major issue, because such a high percentage of monthly earnings go toward that,” Kirkman said.

Beaufort County Housing Authority director Angela Childers echoed his sentiment.

The county, and specifically Hilton Head Island, has “the highest fair-market rents in the entire state,” she said, citing statistics from the U.S. Department of Housing and Urban Development.

Housing costs are driven up by the popularity of the island with tourists and retirees, Childers said. And the service and hospitality industries that cater to the them don’t tend to create high-paying jobs.

The U.S. Census Bureau tracks median earnings for workers, which does not include income from investments or retirement payments such as pensions.

Workers on Hilton Head Island earn a median annual sum of $27,600, according the the Census Bureau’s American Community Survey.

And despite a much lower cost of living, Greenville and Charleston workers earn more annually.

Childers said this disparity causes some middle- and low-wage workers to move elsewhere in search of higher pay and cheaper living — a phenomenon known as “pour-out.”

“Recently, we have had a significant amount of people ‘pouring out’ and moving to bigger cities,” she said. “That’s been on the rise for about two years.”

Kirkman said town and county officials are aware of this problem and are working toward solutions.

“Workforce housing is on the minds of our town officials,” he said. “It’s certainly something they are going to address.”

In the meantime, the high cost of living impacts the types of companies Hilton Head Island can attract.

“Much of South Carolina focuses on recruiting large manufacturing companies,” Kirkman said. “That’s not going to work on Hilton Head. There just isn’t the land or the labor force to support that.”

“We have to try to recruit different types of businesses — more technology-based industries where the cost of living isn’t such a barrier,” he said.

That cost-of-living barrier is reduced for workers in industries such as technology because Hilton Head isn’t competing with other South Carolina cities for those jobs, Kirkman said.

The island is often competing with places in other parts of the country that tend to have significantly higher costs of living, he said.

The cost-of-living index for the Washington area is 146.8, New York 135.6 and California 134.3 — all higher than Hilton Head.

Kirkman said there will always be people drawn to the island regardless of how expensive it is to live there.

“Hilton Head offers something that other places just can’t replicate,” he said. “And that’s the quality of life and the lifestyle.”

This story was originally published March 18, 2016 at 3:00 PM with the headline "Hilton Head Island cost of living tops in the state; wages don’t keep up."