New homes in Fort Mill and Tega Cay could see big increase in school impact fees
Fort Mill School District impact fees could increase to almost $30,000 per new home built, according to a new study. This would be the first time since 2018 that the controversial fees may be raised.
It’s time for the district to request a new impact fee from York County if the district wants to continue charging them, according to state law. Impact fees are charges on new construction. Builders pay them so new homeowners don’t see them directly, although they’re factored into the total home price.
Today, a builder would pay more than $18,000 per home or more than $12,000 per apartment unit to get construction permits within the district.
The school district will ask for a new fee at up to $29,640 per home and $20,796 per apartment. The fee would apply in Fort Mill, Tega Cay and any unincorporated area served by the school district. That represents an increase of about 63% per homes and 73% per apartment.
Fees have been debated across York County in recent years by school districts and home builders. Districts see them as a way to pay for school construction while builders say they are singled out by the fees, which also could impact affordable housing and the quality of homes built.
The York County Planning Commission will hear details from the district on Dec. 9. York County Council will then make the final decision on a new fee.
With more than 18,000 students, the Fort Mill district is the largest in York County and the three-county Rock Hill region. The new fee is based on a projection of 5,221 more students in the district by 2035.
How school impact fees work
State law allows school impact fees based on a mix of math and politics.
A school district commissions a study that weighs the facilities it has, its student count and projected student growth. The study creates a per student cost.
It’s applied across new homes and apartments, based on how many students typically would live in either one. The idea is that homes and apartments pay to maintain the same level of service, even as enrollment grows.
The study produces a maximum fee the district can charge, by state law. But final prices can vary.
York County Council approved the full $18,158 per home and $12,020 per apartment Fort Mill asked for in 2018. Two years later the county approved $4,000 per home, $1,976 per apartment and $2,618 per mobile home in the Clover School District despite their study showing amounts nearly four times higher.
Two years ago, the county opted not to let the York School District charge any impact fee. Its study allowed for nearly $12,500 per home, more than $10,000 per apartment and more than $11,000 per mobile home.
Impact fee studies expire, so a district routinely has to rerun the numbers and apply for a new fee. That’s why Fort Mill is coming back to the county now, and why its figures are higher.
Opposition to school impact fees
Clover got lower fees than its study recommended due to York County Council’s concern about impacts to less affluent areas within the district. The mobile home fee and impacts to affordable housing killed the York fee.
Then there were legal concerns.
Local and state homebuilder associations challenged the Fort Mill fee in court. Three years after York County set up that fee, the South Carolina Supreme Court ruled in 2021 the fee should be allowed. Builders had argued the amount was arbitrary and hurt both homebuilders and property owners.
Part of the concern was how new the fees were.
Fort Mill set up a $2,500 per home fee in 1996. The state then took away districts’ ability to impose them, but left the Fort Mill fee. For years, it was the only school impact fee in the state.
Legislators made changes to allow the current fee process just before Fort Mill started on its 2018 impact fee.
York County Council had little concern approving the Fort Mill fee at the full requested amount six years ago. Councilman William “Bump” Roddey cast the only vote against it, saying he wasn’t opposed to the fee but wanted to increase it gradually to the full amount. Council members at the time talked about explosive community growth and a need to fund it.
Impact of school building fees in Fort Mill
As of mid-November, the district collected $70.4 million in impact fees since the 2018 decision. Interest earned on those fees is $6.5 million. In October, a dozen home construction permits brought in nearly $218,000.
Fee revenue was tied up in litigation for several years, but now it’s being spent. The $67 million Flint Hill Elementary School that is under construction will be funded entirely through impact fees.
Impact fees, though, only go so far. This year, district voters approved a $204 million bond to pay for schools, land purchases and other growth needs
Another bond won’t be far behind it. This time last year, the school board heard details on nearly $700 million of improvements needed within 10 years.
Impact to Fort Mill home building
Part of an impact study involves how a new fee would affect affordable housing.
“There is no more affordable housing in Fort Mill,” said Mike Pruner, president of the York County Home Builders Association of York County. “Show it to me. Show me where a school teacher can afford to buy a home who doesn’t already own a home.”
Not all impact fees get added on top of construction costs, he said. Builders could try to save with lower quality shingles, wood, insulation or other materials.
Building codes are base standards, Pruner said, and high impact fees might keep builders from exceeding them.
Fort Mill impact fees have pushed local builders out and left only national tract builders who can reduce costs, Pruner said. “It’s the most ridiculous thing in the world, and all it has done is lower the quality of housing in Fort Mill,” he said.
Higher impact fees also can impact appraisers, Pruner said, since a home isn’t automatically worth $18,000 or $30,000 more just because there’s a fee.
With school and other pre-construction fees it can easily cost $30,000 per home now before a builder turns dirt, he said. An average permit cost of $600 in 2012 is now about $2,000 which doesn’t include increases for insurance and materials, he said.
Married to an educator, Pruner isn’t opposed to impact fees. But he’d like to see another revenue stream that impacts all home sales, not just new construction.
“Putting it 100% on the back of the home builder industry is not fair,” Pruner said.
Determining impact fee costs
Reached by phone Wednesday, Roddey said he hadn’t reviewed the new impact fee study. He still has concerns about adding costs, even more so if they’re considerably higher than in 2018.
“I will not agree if they come in and ask for $30,000,” he said.
Roddey is willing to work toward a number that he feels makes sense, and he acknowledges growth and housing prices in Fort Mill are different than in other parts of York County. It’s important the county doesn’t rubber stamp an amount, he said, but consider what best fits the need.
“I don’t like slapping all that money back onto the cost of housing,” Roddey said. “Housing already is very expensive.”
Council members Christi Cox, Allison Love and Roddey are the only remaining representatives from the 2018 board. By the time council hears details early next year, only Cox and Roddey will still have seats.
Councilman Tom Audette represents Tega Cay and some of Fort Mill. Prior to his county role, Audette served on the Fort Mill school board where for a time the district added 1,000 students per year.
“I will be definitely a strong advocate to make sure we continue on with our impact fees,” he said, “because it makes a world of difference.”
Fees create tax breaks on home and business owners in the area, Audette said, by helping with capital costs.
New students add to capital and operations costs for the school district. Businesses are hit with higher tax costs than homeowners with school taxes or bond votes, due to South Carolina tax structure.
The ability to build a new school outside of a tax increase or bond referendum shows the value of impact fees, Audette said.
“It brings a very good value back to the public,” he said.
This story was originally published December 5, 2024 at 6:00 AM.
