Real Estate News

Bluffton looking for way to encourage affordable housing development

Here's the bottom line: Developers make more money selling market-rate homes than they do with affordable housing.

But the need for more affordable housing in Bluffton is also real and town officials are working on plans to entice developers to build more of it.

"We want to make the town the best place we can for our residents, and a big part of that is homeownership," Councilman Fred Hamilton said at an Affordable Housing Committee meeting Tuesday. "And in order for people to own homes, there have to be homes available that they can afford."

Currently, the town does not require developers to a make certain percentage of new homes affordable for families who earn lower wages.

Mandatory affordable housing regulations "haven't been something that is common throughout the state of South Carolina," Kendra Lelie, the town's assistant director of growth management, said.

So, if developers aren't forced to build affordable housing, cities and towns must provide incentives to make it worth their while.

The town offers some limited permit and application fee reductions if least 20 percent of new homes in a development are sold at lower-than-market rates.

Officials are considering whether further fee reductions and more flexibility in design standards would spur construction of more affordable housing.

They're also considering a proposal to allow developers to squeeze more new homes on smaller lots if some of the homes are priced at lower-than-market rates.

In typical residential zones, the town allows no more than four homes per acre, Lelie said.

Hamilton said, "High land costs is going to drive (developers) away. If they can't make a profit, why would they want to (build) affordable housing?"

But, if developers can build eight homes on an acre rather than four, it becomes much easier for developers to turn a profit, he said.

The specifics of how such an incentive program would work are still being ironed out.

But the committee is leaning toward recommending a sliding scale that would tie the number of houses built to a percentage of affordable housing.

For example, if a company wants 40 percent of a development to be affordable housing, they might be allowed to build a total of 5 homes per acre.

But if that same builder agrees to make 60 percent of the new homes affordable, they might be allowed to build 10 homes per acre.

"I like the idea of the sliding scale where the more affordable housing you do, the bigger the incentive is," Lelie said. "It's unique and certainly something I haven't seen a lot of. It might capture other developers to come in."

The town's goal is to incorporate these concepts into an overarching affordable housing ordinance to guide future residential growth.

But any such ordinance is still months away.

The committee will draft a formal recommendation in the coming weeks and present it at a town council workshop in October.

Follow reporter Lucas High on Twitter at

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