Why Begin a Development Impact Fee Study?
New development creates new costs for local governments. For every new development coming in, a city or county must consider the costs of providing it with utilities, solid waste and recycling services, roads and streets, stormwater transmission and flood control, recreational and educational facilities, and public safety. Historically, municipalities have paid the costs of these facilities and services upfront through property taxes as well as federal and state grants. Public resistance to taxes has grown, however, and outside support for local governments has declined, leaving local governments to turn to other options.
Typically, development impact fees are required to be
- paid in advance, usually at the time of building permit or development approval;
- dedicated to an identified use; and
- calculated based on the number of equivalent residential units in a structure.
In South Carolina, the Development Impact Fee Act, found at SC Code Section 6-1-910, authorizes local impact fees, but also significantly regulates them. The Act contains procedural safeguards, for example:
- Only a local government that has adopted a compliant comprehensive plan under the Comprehensive Planning Act may impose a development impact fee, with limited exceptions.
- Imposing a development impact fee requires the council to pass of an ordinance approved by a positive majority.
- A local government begins the process by passing a resolution directing its planning commission to conduct the necessary studies and to recommend an impact fee ordinance.
- When it receives the resolution, the planning commission must develop and recommend to the local government an impact fee ordinance. The planning commission must do so using the same procedures as those used to develop a comprehensive plan under the Comprehensive Planning Act.
Perhaps the most important requirement, however, is that the local government must have a capital improvements plan prepared, as well as an impact fee study to justify the fees that are enacted. Taken together, the plan and study should identify the infrastructure needs created by new development and allocate the costs among units of development subject to the fee.
The critical requirements for imposing a development impact fee are
- to reliably predict the costs of infrastructure required by new development, and
- to fairly apportion those costs among units of new development.
In virtually every case, a local government seeking to impose a development impact fee will need to retain engineering and legal professionals to comply with the law.
From https://www.masc.sc/uptown/07-2022/development-impact-fees-require-justification
So where is Cherokee County in this process?
We have our Comprehensive Plan, we are working through zoning that was recommended via the Comprehensive Planning process, and now we are beginning the required study to determine the best path forward with Impact Fee requirements. This project does NOT mean that development impact fees have been approved and will move forward at the conclusion of this project. In order to even have this option in our tool belt to combat burdens we may be under in the next year or two, this study must be conducted. If we waited until we got into a bind to begin this process, it would be too late.
How do we compare?
More than two dozen local governments in South Carolina have already imposed impact fees, and at least two dozen more are in the process of an impact fee study. Charleston, Edgefield, and Richland counties have been exploring impact fees.
From Mt Pleasant: “I don’t know where we would be without them,” said town Administrator Eric DeMoura. “I don’t know how we would have built the new fire stations, roads and parks we need.”
From Moncks Corner: “Why do you need to raise taxes?” said Moncks Corner Community Development Director Justin Westbrook. “Shouldn’t development pay for itself?”
To see Cherokee County’s RFQ for this project, click here.
Based on the project timeline, this will not be ready for award recommendation until February 2026.