MONCKS CORNER -- Faced with a flood of development and a rapidly rising population this town has decided to collect substantial impact fees on new construction to help pay for the services more residents will need.
"This is the final hurdle on a long journey we've been on," Moncks Corner Community Development Director Justin Westbrook told Town Council at a May 20 meeting where the impact fees received unanimous approval.
For a single-family home the fees that took effect May 21 amount to $4,805.
For townhomes, the fees add up to a $2,606 add on, and for newly built commercial buildings most fees are charged by the square foot and depend on the type of business.
The town joins more than two-dozen local governments across the state that have embraced impact fees. The fees don't apply to existing buildings, but are typically collected when new building permits are issued.
In Moncks Corner the issue appeared to draw little, if any, controversy. At a public hearing immediately before the final Town Council vote on May 20, no one spoke in opposition to the fees or in favor.
The town's Planning Commission unanimously recommended in February that council adopt impact fees, and the minutes of the commission's meeting say: "Commissioners spoke fondly about potential impact fees noting that the population growth of the town has outpaced the town's ability to maintain their level of service that has made annexation so attractive."
Next decade, 4,550 more homes
Moncks Corner's population started rising rapidly in 2021.
After adding just 270 people from 2020 to 2021, according to the Census Bureau, the town gained 1,547 residents the next year, 1,400 the next, and 1,699 last year.
Those numbers made the Berkeley County municipality the fourth-fastest-growing South Carolina jurisdiction in 2023, and third-fastest in 2024.
Neighboring Goose Creek previously imposed impact fees to help with the costs of its population growth. With large subdivisions marching up S.C. Highway 52 Moncks Corner decided to follow.
That's not a decision a town council can just decide to take with a vote. State law requires a complex and detailed study before impact fees can be imposed and an advertised public hearing -- the one where no public comments were made -- was mandatory.
The impact fee study conducted for the town concluded that from 2024 to 2034 another 4,550 homes will be built. The population is expected to rise by another 67.6 percent, to more than 29,000, in that timeframe.
Such studies seek to calculate the needs of a growing population, and the costs of meeting those needs. From parks and sanitation to police and fire stations, a study drills down and aims to convert the needs and the costs into per-home or per-square-foot impact fees.
Who will pay, and how much?
For single-family and townhouse construction, Moncks Corner's impact fees are straightforward: It's $4,805 each for the former and $2,606 for the latter.
Some local governments charge impact fees for new homes that vary by the size of the home. Moncks Corner has a flat fee, regardless of home size.
Impact fees are paid by the developers of new buildings, and it's assumed that they would build that cost into the eventually selling price.
Commercial buildings get more complicated, with five different business categories.
Retail buildings would come with the highest commercial fee, of $3,987 per 1,000 square feet. Institutional buildings come in second, at $2,333.
Office and industrial buildings would be charged less, $1,817 or $828 per 1,000 square feet. And hotels would be charged by the room, at $1,154 each.
Those fees could add up to big bills. A 100-room hotel, for example, would come with a $115,400 impact fee bill.
The town's study estimates 490,000 square feet of commercial buildings will be constructed over a decade.
What about housing prices?
Local governments don't have to charge the maximum allowable impact fee, based on one of those studies, but Moncks Corner has chosen to do so.
The town's new fees for home construction are higher than some other governments have imposed, such as Lexington ($2,548) and Georgetown County ($3,207), and lower than others, such as Mount Pleasant ($6,509) and Summerville ($6,523).
Developers typically pay additional impact fees to water and sewer authorities, to offset the cost of system improvements. Utilities establish those charges.
Local governments are required to study the effect an impact fee could have on affordable housing. Westbrook told Town Council members that it would be minimal when considered part of a 30-year mortgage.
Financed over 30 years with a 7 percent interest rate, $4,805 works out to $32 each month in the payment. Due to the interest on the mortgage loan, over 30 years that impact fee would cost $11,506 to pay off.
For a new home priced at $300,000, if the entire impact fee were baked into that selling price, then fee would account for 1.6 percent of the cost of the home. For a $600,000 home, the fee would account for 0.8 percent.
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