Builder fees on new home construction in Beaufort jumping 375%. Should buyers be worried?
Development impact fees for construction of a typically-sized residential house in Beaufort will rise nearly 375% after action by the Beaufort City Council Tuesday.
The millions of revenue generated would be earmarked for parks and recreation, transportation and library services.
Beaufort County has been working with the county’s towns and cities for more than a year to get agreements on the fees that included negotiations on a list of local projects the fees would finance.
On Tuesday, Beaufort City Council members authorized City Manager Scott Marshall to hammer out the final intergovernmental agreements. This agreement provides the county needed consent from the city for the imposition of the impact fees on residential and commercial property.
The Town of Port Royal previously approved impact fees.
The fees are based on square footage.
For construction of a single-family residence between 2,501 to 3,000 square feet, combined impact fees for parks and rec, libraries, roads and fire would increase from $1,161 to $5,490, a 373% bump.
Commercial fees involve a more complex calculation and vary by use but will only be collected for transportation and fire impacts, according to the city.
Resident Patrick Canning, who works in real estate, called the increase on residential construction “huge.” If you want to impact the building construction industry in the city, “That might do it,” Canning said of the fees.
While acknowledging that the increase was substantial, Mayor Stephen Murray said development is having an impact on the the ability of local government to provide services. Municipalities, he said, have agreed that developers should share in the cost.
A study commissioned by Beaufort County said population growth in northern Beaufort County, including Beaufort, will bring additional need for parks and recreation and library facilities and transportation improvements over the next decade.
The fees are collected from developers when issuing building permits for housing and other infrastructure to accommodate people moving into the county.
Developers who build workforce housing are excluded from the impact fees.
It is the county’s responsibility to collect the impact fees, but it cannot collect them in municipalities, including Beaufort, Bluffton, Hilton Head Island, Port Royal, and Yemassee, without an intergovernmental agreement giving the county consent to do so.
The city will collect the road fee on new residential and commercial development. The parks and transportation and library fees will be imposed on on new residential development. The fees, which will be transferred to the county, will be collected within the city’s corporate limits.
The funds will used for a specific list of projects that are tied to approval of the fees, Murray said.
In communities north of the Broad River, an estimated $29.8 million in impact fee revenue will be collected for roads, $4.2 million for parks and recreation and $3.5 million for libraries, Beaufort County said in March when it initially passed the updated impact fees.
Beaufort County has said previously that a home buyer’s average monthly mortgage payment would increase by about $100 if all fees were adopted.
The library impact fee is new in Beaufort. The parks and rec and transportation fees would increase. The total also includes an existing municipal fire impact fee, which is not increasing.
This story was originally published May 24, 2023 at 9:35 AM.
