Housing
Tourism taxes could be used to help build homes for workers
Revenue from taxes on vacation rentals could provide nearly $800,000 a year to help Georgetown County encourage development of housing for people who work in the tourism industry, according to a housing impact analysis that is the first step toward securing those funds.
The money would come from a portion of the local and state accommodations taxes. A change in state law in 2024 allowed up to 15 percent of the revenue from those taxes on short-term rentals to be used to develop workforce housing. But first a local government has to draft a housing impact analysis.
The Planning Commission is due to consider the analysis as an amendment to the housing element of the county’s comprehensive plan when it meets today. The amendment needs to be reviewed by the state Tourism Expenditure Review Committee and the county legislative delegation before it is adopted by County Council.
The analysis builds on a study commissioned by the county in 2020 from Bowen National Research that showed a growing need for houses and rental units below the market average on the Waccamaw Neck. County officials said at the time the goal was to help shift growth to the western part of the county.
But a series of recent rezoning requests for rural areas has drawn complaints from residents that the proposed developments are priced toward retirees rather than people living and working in the county today.
The analysis, prepared by two consultants, found that people who work in accommodations and food service make up the largest sector of the workforce, but their average wage makes owning a home or renting unaffordable.
The federal government defines affordable housing as a rental that takes up no more than 30 percent of a person’s income or a home than costs no more than three times their annual salary.
“Based on this rule of thumb, the above workers in the Accommodations and Food Services, the largest employment sector, should not spend more than $70,668 for the purchase of a home and no more than $588.90/month for rent,” the analysis found. “Yet there are no homes or apartments at this rate in Georgetown County, which means all these employees are overburdened.”
The average rent in the county was $1,375 a month last year. The average home sale price was $425,567.
The problem of affordability holds true for two other top employment sectors, health care and retail, according to the analysis.
“This growing mismatch between what local Georgetown workers, within the top three employment sectors, earn and the cost of housing continues to not only put pressure on individual households who are cost-burdened but also impact the ability for companies and businesses to attract and retain workers,” the analysis says.
It found that the county will need 6,529 units of affordable housing over the next 10 years to meet existing and future needs.
The ability to support affordable housing developments with accommodations tax funds could be combined with other tax incentives, the analysis notes. And it would come at a time when federal and state funding for affordable housing has declined.
“More and more, local governments are turning to local solutions for affordable housing funding,” it states.
The analysis by Tina Belge of Catalyst Community Consulting and Tammie Hoy Hawkins of Together Consulting emerged from a housing action plan commissioned by the Francis P. Bunnelle Foundation in 2024 to help support affordable housing goals in the county’s comprehensive plan, which was undergoing an update at the time. The county is now updating its zoning ordinance and development regulations to implement goals in the land use element of the comprehensive plan.
The housing impact analysis also recommends land use strategies to encourage affordable housing.
“Zoning flexibility is one of the lowest cost ways to increase the supply of housing; this strategy does not require government spending,” it notes.
It recommends allowing “adaptive reuse” of commercial space for housing, reducing parking requirements, using “planned developments” to negotiate housing for a range of incomes and “up-zoning” to allow more townhouses.
While increasing density will bring objections, the analysis concedes, locating density in areas close to where people work can reduce traffic and, unlike apartment complexes, townhouses can be designed to limit their impact on the character of a neighborhood, it adds.
