Hilton Head joins regional trust to address affordable housing shortage. Will it work?
Hilton Head has taken another step toward addressing its affordable housing needs by becoming the third Lowcountry municipality to join a regional housing trust fund.
The unanimous approval by the Town Council on Tuesday marked a turning point for a group previously hesitant to participate in the regional fund. Why, some asked, should Hilton Head’s funds go toward housing projects as far outside town limits as the Town of Beaufort or into Jasper County?
“Hilton Head Island is perceived as being the wealthier community (in the region), so we should be able to take care of ourselves on housing,” Ward 6 Councilman Glenn Stanford told the Island Packet after the meeting. “But they’d still want us to make contributions to the region trust fund. That created some concerns for me that we wouldn’t get the benefit of that.”
Stanford said his mindset changed, though, when he reviewed a 2018 assessment of the island’s housing needs. According to the study, there were about 26,000 jobs on Hilton Head in 2016. Of those, 38% were held by island residents; the remaining 62% of employees commuted from surrounding areas.
That number convinced Stanford that, even though Hilton Head might not benefit locally from the fund as much as other towns, it will still be an economic boon for the island.
“While sure I’d love to see us get a share of the funds, and we may indeed do that as we move forward, we would benefit from having workforce housing provided to the workers coming to Hilton Head Island,” Stanford said.
Ward 5 Councilman Tom Lennox said he came to the same conclusion.
“I don’t think there’s any question about it,” Lennox said. “The employees coming across the bridge to work on Hilton Head Island will live in [a] development, in part, funded by the regional housing trust fund on the mainland. ... To the extent that we can participate in an effort to create affordable housing on the mainland, I think we are enhancing our businesses’ ability to attract a qualified workforce.”
Urgency to provide affordable housing for islanders in need was heightened in August after the near-eviciton of around 300 residents at Chimney Cove, one of the few remaining affordable housing options on the island.
How the trust works
Hilton Head follows the towns of Hardeeville and Yemassee in approving the trust. Other partners expected to join include Beaufort and Jasper counties, and the towns of Beaufort and Port Royal.
Lennox said the trust fund would be an almost unprecedented cooperation between local governments in the U.S.
“This is the first regional housing trust fund that we have found outside of the state of Washington,” Lennox said.
The initiative was originally pushed by the Southern Lowcountry Regional Board, or SoLoCo, Lennox said. The trust aims to build housing priced for families or individuals whose yearly earnings are near or below the area median incomes for the various municipalities. Priority will be given to projects serving 60% or below the AMI.
Lennox said the money can be used in various ways as long as it’s paid toward affordable housing, from providing extra funding a municipality might need to complete a subsidized project, paying for a private-public partnership, or assisting tenants with down payments if the project is meant to be owned instead of rented.
In the initial year, members will contribute 3% of their American Rescue Plan funding, according to trust documents. For Hilton Head, that would be $156,815.
After the first year, members will contribute based on their population. That first contribution will then increase 3% each year — for example, Hilton Head is projected to pay $86,559 in Year 2, and $89,206 in Year 3, based on its population.
Hilton Head is projected to be the second-highest contributor of funding behind Beaufort County in the initial 10-year term of the trust.
Members are given flexibility in how to fund their contribution, with options including but not limited to donations, bonds, state or federal grants, and state or federal loans.
Participation in the trust is optional.
Lennox said Hilton Head has yet to decide precisely how to fund its contributions, but the town is examining its options.
Projects that receive funding will be decided on by a board comprised of a representative from each of the participating municipalities, each representing a single vote.
More to come locally
Stanford said the town is also still pursuing other housing solutions on the island.
“I believe that we will develop our own local housing trust, because we see the crying need for workforce housing here,” Stanford said. “It’s in the idea stage right now I would say, but I’m confident that my colleagues on the council would support that.”
Because Hilton Head Island’s area median income is significantly higher than surrounding communities in Beaufort and Jasper counties, local solutions will have to take a different tact to determining who is eligible for the housing and keeping the shelter affordable, Lennox said.
“The good news is that the AMI for Hilton Head is $96,000, and the bad news is the AMI is $96,000,” Lennox said. “If you take a look at what 60% of our AMI is, it’s almost $60,000. And $60,000 doesn’t touch a lot of the people that are working on the island.”
According to the 2018 housing assessment, the two fastest-growing economic groups on the island are people making under $25,000 and over $150,000.
The town is also experimenting with public-private partnerships to provide affordable housing, which if successful, could serve as a repeat model for local developments in the future, Stanford said. The results of the current project near the North End post office will be key to determining whether similar arrangements could work for Hilton Head.
Private entities are moving to address housing need as well, Lennox said. Sea Pines resort recently finished construction on housing for its employees in need, and one island businessman spent $3 million to provide affordable homes for his own employees.
Hilton Head Town Manager Marc Orlando said with a comprehensive outline for a housing strategy due to the council by Nov. 1, councilors should have more clarity on policies geared to address Hilton Head’s specific needs, with land at a premium and construction more limited than mainland municipalities.
Until then, town leaders agree a united approach to the regional housing issue is needed. Orlando said at the regional level, the collaboration has also led to examination of transport issues and solutions that pair with housing needs.
Stanford said as the Lowcountry continues to grow, these cooperative efforts will pay off for future issues as well.
“I think long term into the future, the distinctions between some of these communities are going to be blurred,” he said. “We are going to have more of the same problems. Because we’re seeing the same problems, we ought to be talking to each other and working with each other to solve those problems.”
This story was originally published September 23, 2022 at 4:46 PM.
