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State gives local affordable housing $1 million boost
By Dennis Quick
Senior Staff Writer
The South Carolina Housing Finance and Development Authority recently gave $1 million to the Charleston Housing Trust, a nonprofit organization formed last year to fund and promote affordable housing in the tri-county area.
The $1 million marks the trust’s initial funding. The Trust will use the money to leverage additional money in grants and low-interest loans to build up funds for affordable housing, which the trust considers crucial to the region’s economic development, says Tammie Hoy, the trust’s executive director.
Recruiting businesses to the region will be easier if the businesses know their employees can find affordable housing relatively close to the workplace, Hoy says.
Trust funding could save affordable housing developers as much as $30,000 in architectural and engineering fees, environmental assessment fees and other pre-development costs, plus site acquisition and construction costs, says Hoy. She adds that relieving developers of such costs, which often hamper affordable housing development, enables developers to build less expensive homes.
The trust will use its $1 million to leverage funding from the United States Treasury Department’s Community Development Financial Institutions fund and other federal sources, plus banks and local governments. Each dollar leverages an additional $9, the trust says.
The self-sustaining trust fund will be replenished through loan repayments.
Developers must apply for the Trust’s funding. In April, the Trust held a workshop concerning application guidelines for developers. Developers have until June 10 to submit their applications. Accepted applications and new affordable housing projects will be announced in early August, Hoy says.
More than 45% of Lowcountry households earn less than $44,700 a year, according to the trust. The region’s rising housing costs, which have jumped 25% in the past three years, puts home ownership almost out of reach for people earning such wages, Hoy notes.
The average sales price of a Lowcountry home is about $268,000, according to the Charleston Trident Association of Realtors.
Trust funding will finance housing developments for Lowcountry residents whose incomes are below $31,304, which is 80% of the area’s median income, according to the trust.
Cutbacks in U.S. Department of Housing and Urban Development programs have forced local communities to seek other funding alternatives for affordable housing, Hoy explains. Local housing trusts are among those alternatives.
The U.S. Department of Housing and Urban Development considers a housing unit affordable if no more than 30% of the household income goes toward the mortgage.
Hoy believes affordable housing continues to struggle with a perception problem. It is not housing for welfare recipients but for the region’s workforce—police officers, fire fighters, teachers and the like, she points out.
“Affordable housing is relative. It’s based on what you earn,” Hoy explains.
Hoy emphasizes that working people are vital to the economy and, therefore, need homes they can afford.
“You can’t talk about economic development without talking about affordable housing,” she insists.
Steve Dykes, Charleston County economic development director, says he has yet to encounter an instance where the county lost a business recruitment prospect due to the affordable housing issue.
“However,” Dykes adds, “I have heard anecdotes from companies whose relocating employees encountered ‘sticker shock’ with the cost of housing here.”
There are more than 300 housing trusts in the United States. The Charleston Housing Trust is South Carolina’s first local housing trust fund, says Hoy. Although founded in March 2004, the concept evolved several years ago in the city of Charleston’s Housing and Community Development department in response to HUD’s affordable housing cutbacks.
Dennis Quick covers economic development for the Business Journal. E-mail him at dquick@crbj.com.
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