Developing Housing Shortage

There were 12 candidates in the three county council races in June. On the issues, we were all about the same touting the need for a new/ bigger/ renovated jail, better economic development, improved roads and bridges and beefing up fire service.

As I detailed in my last letter, the problems the county faces are broader and deeper. For instance the county and most of the state has a Methamphetamine problem the public by and large doesn’t realize and the government must do a better job combating.

The other issue few are aware of or talk about is the developing housing shortage in the county.

I bought some rental properties during the decline and have a good sense of the rental market, especially in the Pickens, Liberty and Easley areas. It is stunning how much rents have increased. According to Zillow.com the average rent in Easley has risen from $875 to $1,200 in five years. That’s a 7.5% gain per year. The past two years the increase is 10% per year.

During the campaign, I talked to two of the biggest property managers in this area — they manage hundreds of rental properties. They told me they have few rental properties available now-a-days.

Why? Supply and demand. Housing demand is rising as the economy has rebounded. Pickens County is getting more sprawl from Greenville. Yet the supply of new housing is not rising like it was.

Looking at the number of residential building permits in the county, they peaked at 748 in 2002, and averaged 622 in the 2002 to 2007 period. In 2010, only 159 residential building permits were issued and the average the past five years is only 320.

Land development for homes is way down. In Pickens where I live, you’ll see a one-off house being built here and there, but developers are no longer buying like 20 acres of land, clearing and grading it, putting in roads, curb, gutter and stormwater ponds, and then selling the lots.

I talked to four or five of those who used to do such residential developments, and all said they were out of the business. Too much regulation when it comes to stormwater. Too much government oversight. Too many delays. Too much risk and expense. And they have to borrow the money, put in all the roads, curb, gutter, ponds and stormwater infrastructure and get it all approved before they can sell one lot. The smaller developers don't have that amount of upfront capital.

What is going to happen is, only large developers will come in, building many homes with high prices/ profit margins to cover all that cost.

If we are going to grow our county, affordable housing is a key component. And the solution is not a government program, but allowing local home builders to meet the rising demand without excessive regulation and oversight. This is the best way to bring the price of housing down (beit sales prices or rents).

Bigger picture, Pickens County can grow its tax base by growing existing business, recruiting new business or building more homes to meet rising demand. The county council and state needs to look at regulation that is crimping the development of housing and see what they can do to make the terrain more friendly to home building.