Politics & Government

How Hilton Head's skyrocketing rent 'impacts every single islander, every single day'

A file photo of a help wanted sign posted at a Hilton Head Island business.
A file photo of a help wanted sign posted at a Hilton Head Island business. Staff photo

Hilton Head Island Mayor David Bennett has said the creation of more affordable housing is one of his top priorities.

But little progress has been made.

Meanwhile, during the past five years, rental rates on Hilton Head Island have risen by nearly 50 percent, reaching an average of more than $1,500 in January, according to data from Zillow and an Island Packet analysis of listings on the popular classifieds website, Craigslist. At the same time, the median income on Hilton Head has remained nearly stagnant at $70,000, according to Census Bureau data.

A renter needs to earn an annual salary of $48,000 to afford a one-bedroom rental on the island, according to the U.S. Department of Housing and Urban Development, which advises that households should spend no more than a third of their income on housing and utilities.

As a result, teachers, nurses and other professionals can’t afford to live where they work.

First- and second-year teachers in the Beaufort County School District will earn approximately $38,000 this year, including a $3,000 cost-of-living supplement.

Amanda O’Nan, principal of Hilton Head Island High School, struggles to recruit and retain teachers because of the island’s high cost of living.

Although many teachers express interest in positions at the school, they often turn the jobs down after they seeing the area's expensive rents and mortgages.

The community at large suffers as a result, O'Nan said.

"If you want a solid community, you need a solid foundation, and education is just that," she said.

Most of the first- and second-year teachers at Hilton Head Island High School have taken on second jobs in the food and beverage industry, according to O’Nan.

While she understands the need for extra income, O’Nan worries it could start affecting the quality of education for students. The extra jobs keep teachers out late, leaving little time to grade papers and create lesson plans, she said.

"We need top-notch teachers, and in order to get them here, we need to support affordable housing or they’re going to go elsewhere, and other schools are going to surpass us," O'Nan said.

Jeremy Clark, market chief executive for Hilton Head Hospital, expects nearly a third of his workforce to retire in about the next 10 years. With the aging population on Hilton Head, any obstacles that stand in the way of recruiting employees could pose a serious problem for the community.

"While we’re excited for them, we know that we’re going to have to recruit and retain new employees," Clark said. "And we know that where someone lives plays a big role in where they want to work, so having affordable housing unity within the community is very important to us."

Meanwhile, wages for the county's recreational and hospitality workers rose by 10 percent from 2013 to 2016. Although that might seem substantial, rents in many areas of the county climbed by nearly double that.

With the possible loss of professionals and service workers, Bennett believes the island is not sustainable.

"This is not just a workforce issue; this is not just an employer issue. It’s an issue that impacts every single islander, every single day," he said. "You need pharmacists at your pharmacy, you need health care workers you need teachers you need firemen to help and be a part of your community. But many of them are not able to afford to live here right now."

Solutions in the works

To start searching for solutions, the Hilton Head-Bluffton Chamber of Commerce recently established a coalition of representatives from more than 20 businesses in southern Beaufort County, real estate brokers and government officials from Bluffton, Hilton Head and Beaufort County.

The group, which represents more than 4,500 jobs in the hospitality industry, identified 582 open positions at 20 major companies in January. Nearly $4.4 million in revenue may be lost in 2018 because of the open jobs, according to coalition estimates.

"That’s taxes that are never going to be captured because we don’t have the staff to capture it," said Alan Wolf, the coalitions' chairman and director of operations for SERG Restaurant Group.

The lack of affordable housing is to blame, he added.

"If we see stagnation in revenues, well then of course the tax revenue is going to start decreasing," Wolf said. "And that will be a quality of life issue because all of us who are property owners will then carry that. We’ll have to finance those shortages."

Bennett to tackle problem too

Bennett, who owns a development company that builds affordable housing, has discussed ideas on how to tackle the lack of affordable housing, but nothing has come to fruition yet.

Hilton Head Island Mayor David Bennett File Staff photo

Bennett said that was because he "had a multipronged approach to what our council has been trying to accomplish."

Meeting basic needs for everyone in the community, such as sanitary sewers and paved roads, as well as undertaking the island's visioning process and cleaning up after Hurricane Matthew needed to come before affordable housing.

"Those are three big things that we needed to work on before we could get to where we are at," Bennett said.

In 2010, the Hilton Head Island’s Mayor Task Force created a "vision" for 2025 and listed preparing and implementing “a scattered affordable housing program throughout the island” as one of its top priorities. It also stated that affordable housing was an "essential element" that was "critical to the future success of the hospitality sector on Hilton Head Island."

Despite years of little efforts to bring that plan to fruition, a recent push from the business community has brought affordable housing on Hilton Head back into the spotlight:

  • In late February, the Hilton Head Island-Bluffton Chamber of Commerce held its second annual Unite Workforce Summit. Five affordable housing experts flew in from across the country to share their experiences and offer advice to local stakeholders.

  • At the county level, Beaufort County Council hired Bowen National Research to conduct a Housing Needs Assessment, intended to help each municipality better understand the demand for affordable housing by product type and tenant profile.

  • On Hilton Head, Town Council recently submitted a white paper to state legislatures to ask them to consider changing the criteria with which they prioritize developments for the Low Income Housing Tax Credit. The tax credit program, which was designed to provide for-profit and nonprofit developers with an incentive to create and maintain affordable housing, is the nation’s most extensive affordable housing program.

Among other possible solutions being considered on Hilton Head is repurposing vacant buildings into affordable housing units. Possible contenders include the former Greyco building on William Hilton Parkway and an old office building on Office Way.

"I think that some of the underutilized, principally vacant commercial real estate stock gives an impression of our community that is probably not one that we want to convey.," Bennett said. "So to be able to take that and repurpose for today’s needs to provide affordable housing and to build a more sustainable community would be a win win in my book."

Some efforts, however, are already meeting some hurdles.

Last month, Hilton Head’s Public Planning Committee sent out a request for proposal to hire a consultant to prepare an affordable housing strategic plan. The town only received one application and it was incomplete, so the committee made some adjustments and the request was reissued in the hopes of receiving more interest by the April 17 deadline.

Although the town already has ample proof of the need for affordable housing, Bennett said the consultant will help Town Council understand what “cutting-edge tools” are available to the town to make affordable housing a reality.

"We simply need to put all of those items into place until we have enough tools in the toolbox that allow for affordable housing to occur in a way that reflects our true island character where we have that appropriate blend between hardscape and softscape," Bennett said.

Facing backlash

As Hilton Head leaders consult with experts, craft plans on action and advocate for legislation, some Hilton Head residents remain opposed to the idea of creating affordable housing using subsidies and government incentives.

Earlier this month, Hilton Head opened up an online public comment forum, asking the community what the town’s role should be in addressing affordable housing.

"The role of government in addressing affordable housing should be nonexistent," one Hilton Head resident wrote. "There are too many negative unintended consequences of government involvement in anything. If there is a marketplace for affordable housing it will happen."

The Hilton Head Island Area Realtors Association recently embarked on a “Yes, in my backyard” initiative as a way to fight the "Not in my backyard" attitude that some community members have expressed about affordable housing.

The Business Workforce Coalition, established by the Hilton Head Island-Bluffton Chamber of Commerce, is taking the lead to try and educate residents about how creating affordable housing could lift up all sectors of the community.

Earlier this month, the coalition served dinner for more than 50 residents at Wexford Plantation and recruited speakers to discuss the unintended consequences caused by the shortage of affordable housing.

The coalition hopes to host “behind the gates” discussion and dinner events in all of the island's gated community in coming months.

"We’re pitching them on the fact that we’re competent, caring individuals just like they are, but we’re putting the time and work in and we hope that we can count on their support," Wolf said. "So that when it comes to the town and we actually have to vote on some of this stuff, it’s not just an automatic no out of spite or whatever it may be."

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