This post was originally authored by George Morrison of McNair Law Firm, and appears on our blog with his permission. 

The City of Charleston has changed the rules governing the Mixed Use Workforce Housing District Zoning Ordinance in an effort to further diversify housing opportunities for residents.

The prior rules required developments located within the MU-1/WH and MU-2/WH zoning designations to include owner-occupied or rental workforce housing units to make up 15% of the number of residential units in the development. On July 11, City Council voted to offer a fee-in-lieu alternative to the inclusion requirement and to extend the number of years the affordable units must remain available.

Council members intend for the fee-in-lieu option to create funds the city can use to build its own workforce housing, with the purpose of increasing the long-term availability of such units.

The workforce housing zone is intended to permit high density residential uses along with a limited variety of neighborhood commercial uses and services in urban areas of the city, primarily areas on the Upper Peninsula. Developers wanting designation for their properties as a workforce housing zone now have two options under the rules.

  1. Offer below-market rents in 20% of their units for 25 years, or
  2. Pay the city $5.10 per square foot to opt out of that requirement.

As further incentive to opt in to either the fee-in-lieu or the inclusion requirement, developers that do can build significantly more units than the base zoning allows

Additionally, the prior zoning rules required developers to provide below-market rents for a period of ten years. The new rules extend the timeline for that commitment to 25 years.

Properties which have already received the workforce housing zoning designation, as of January 10, 2017, can include 15% of workforce housing units for a term of 10 years or pay a lower fee-in-lieu of $3.40 per square foot instead of fulfilling the inclusion requirement.

There are over 6,000 units either planned or currently under construction in the City of Charleston.

At SCCLF, we advocate for statewide and local legislation and ordinances that encourage housing and community development investment and the reduction of regulatory barriers.  We view the Mixed Use Workforce Housing District Zoning Ordinance as a win-win for developers and the citizens of the City of Charleston, allowing  the choice of developing mixed use, mixed income commercial and residential units in exchange for higher density and other incentives. This is one tool in the toolbox designed to incentivize private sector participation in housing development for all Charleston workers at every income level close to retail and other services.