Politics & Government

Report: Only 20% of Hilton Head rentals are affordable for workers. Could this fix it?

Study says 16,000 workers come onto Hilton Head to work. Here’s why

A study commissioned by the Town of Hilton Head Island shows those earning $25,000 or less can't afford to live on Hilton Head.
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A study commissioned by the Town of Hilton Head Island shows those earning $25,000 or less can't afford to live on Hilton Head.

When Hilton Head’s deputy fire chief of operations Chris Blankenship is hiring a new firefighter, they often ask him if it’s okay to live in Bluffton or in Georgia.

The Town of Hilton Head Island Fire & Rescue Division doesn’t have a residency requirement — because they can’t.

Living on Hilton Head isn’t always possible for a new firefighter, he said.

Blankenship has been getting that question about living over the bridge more and more these days — only 31 percent of line firefighters employed by the division live on the island.

Five years ago, 50 percent of them lived within the town limits.

Blankenship’s issue isn’t unique to the fire and rescue division, or even the public service industry as a whole — Hilton Head’s long-anticipated workforce housing report was released last Thursday, which said 80 percent of the rentals on the island are priced at $1,500 per month or higher.

The problem is that not many workers on the island can afford that, the report said.

The seven-month study, which began in September 2018, found that nearly 18,000 individuals working in 11 different industries on Hilton Head earn between $20,850 and $51,359 each year.

That makes affordable rent between $521 and $1,284 each month, according to the report.

To address the shortage of housing in that range, consultant team Lisa Sturtevant and Associates outlined several steps the island’s government, business community and developers can take to better serve the 40 percent of all Hilton Head households that are “cost-burdened” — or spending more than the recommended 30 percent of their income each month on housing costs.

But there are workers who won’t be as affected by workforce housing designed to be “affordable.” There were an estimated 25,944 jobs on Hilton Head Island in 2016, according to the American Communities Survey by the U.S. Census Bureau.

That leaves just short of 8,000 workers who can afford higher-priced rent and home ownership costs.

Here are some of the ways the report said island leaders can mitigate the workforce housing shortage:

1. Reuse commercial space

A popular suggestion in the mayoral race, the Sturtevant team supports re-purposing empty stores and properties on Hilton Head for housing.

The projects can either be commercial buildings that are re-purposed into residential space, or buildings that can be torn down and redeveloped entirely as residential space, the report stated.

“I think that’s a fabulous idea,” Lisa Bernstein, owner of The Purple Cow said. “Why should we have these empty buildings sitting around?”

Last month, her store was so understaffed that customers popped up and started waiting tables for her.

The store front that used to house Hilton Head Island’s Sam’s Club as seen on April 2, 2018 now sits vacant at 95 Mathews Road. Drew Martin dmartin@islandpacket.com

Other business owners have been less enthused by the option. In December, owner and chef at Lucky Rooster Kitchen + Bar, Clayton Rollison, said he was hesitant about redeveloping buildings such as Sam’s Club for housing.

“(If you’re) living in a 400- to 500-square foot apartment with no amenities tucked away in some little nook that didn’t work on Hilton Head in some poorly conceived building,” Rollison said. “Are you enjoying the things you’re working so hard to live here for?”

Some private businesses are already leading the charge on re-imagining old buildings.

The Richardson Group, the island-based real estate and marketing firm that owns Local Pie, the South Carolina Yacht Club and several Coligny developments, opened eight studio apartments in 2018 on the site of the old Beaufort County Sheriff’s Office building on Lagoon Road, Lee Lucier, the group’s chief operating officer, said in October.

But other plots of land are more tied up in the process.

Last week, a developer trying to purchase the Hilton Head Christian Academy site on Gardner Road withdrew its application after neighbors spoke against the 55-foot buildings that would make up the complex and council members criticized the $1,200-$2,400 rent estimates.

2. Use town-owned land for workforce housing

The report also suggested using land the town owns to sell for workforce housing development.

“The provision of free or reduced cost land is an important way to close the gap between delivering market-rate and below-market rate housing ... in communities like Hilton Head Island with severe land constraints,” the report said.

Mayor John McCann said he’s steadfast in maintaining land that the town purchased under the condition that it be preserved and not developed, and the report specifies using land that is “unrestricted and un-programmed.”

The report does not name specific properties, but said the town can introduce a “vacant structure fee” to encourage developers to build on a site or move on.

This town-owned plot of land, at left, next to the leisure trail on the west side of North Forest Beach Drive on Hilton Head Island.

3. Establish a home linking/ home sharing program

“There are often vacant units on the island that could be a source of workforce housing if property owners and workers were able to be connected,” the report said.

That connection could come in the form of a website that the Hilton Head Island- Bluffton Chamber of Commerce and local businesses use to could connect new hires and employees with housing opportunities, the report said.

“It’s definitely something we will be discussing with our workforce coalition,” vice president of chamber communications Charlie Clark said of the effort. “The discussion may be about a public/private partnership as the study suggests, it also may include discussing ways to build awareness of already existing efforts in the marketplace.”

Hilton Head and Bluffton have a robust presence on Facebook for housing connections and roommate searches, according to searches on the social media platform.

Blankenship said many new firefighters connect and live together to split the rent on Hilton Head.

Lisa Sturtevant, founder of Lisa Sturtevant and Associates, LLC., delivers the timeline for developing a workforce housing plan for the Town of Hilton Head Island. Katherine Kokal, the Island Packet.

4. Make rental projects more competitive for tax credits

Low-income housing tax credit programs are a source for federal funding that reduces the cost for developers as long as their developments remain affordable for low-income residents for 30 years, according to the report.

Staff photo of the IRS. J. David Ake AP

Hilton Head has “a very difficult time” trying to compete for tax credits for new developments because the island doesn’t meet all criteria at the state level.

Sturtevant suggested that the town continue to advocate for changes to the the state’s criteria, such as:

  • Removing or substantially increasing the cost cap for the credits to account for expensive land on Hilton Head
  • Removing points for developing close to a school
  • Providing additional points for developing in a tight housing market with low-vacancy rates
  • Creating incentives for mixed-use and mixed-income projects

The report also said town leaders should collaborate with local developers to use bond financing to get tax credits for rehabilitating existing buildings.

What’s next?

The full report was presented to the public planning committee April 10.

Sturtevant faced questions about her findings and suggestions, and the public planning committee will vote on the the proposal April 25. Depending on that vote, the report will go on to Hilton Head Island Town Council.

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Katherine Kokal moved to South Carolina in 2018 after graduating from the University of Missouri and loves everything about the Lowcountry that isn’t a Palmetto Bug. She has won South Carolina Press Association awards for in-depth and government beat reporting. On the weekends, you can find Kati doing yoga and hiking Pinckney Island.