South Carolina underbuilt for a decade. Now the Lowcountry is paying for it

CHARLESTON, S.C. (WCBD) — It is no secret the Lowcountry, like many areas, is facing a housing crisis with the demand for housing outpacing the supply.

Dr. Joseph Von Nessen, a research professor at the University of South Carolina, said the gap between supply and demand is a problem nationwide, resulting from a decade-long period of underbuilding.

“This isn’t a unique problem to South Carolina, but it is exacerbated by the fact that we have had more population growth,” he explained.

Data from the U.S. Census showed South Carolina as the fastest-growing state in the nation in 2023. In Charleston, one realtor estimates that more than 30 people move to the area every day.

“We’re seeing a lot of new construction happening right now to try and keep up with demand and it’s going to take several years to make a dent in that supply and demand – that shortage,” said Dr. Von Nessen.

The trends of underbuilding are seen in the number of new privately owned housing units that have been authorized over the last 15 years in South Carolina.

In 2009, data provided by the U.S. Census Bureau showed the number of new privately owned housing units authorized in the state was 15,529. In 2010, that number dropped to 14,021.

The numbers began to rebound, and by 2021, 50,680 units were authorized across the state.

But, as communities work to meet the housing needs, the Lowcountry faces other unique problems with limited areas for new housing development and a need for new infrastructure.

Michele Reed, the Planning Director for the Town of Mount Pleasant, said these are a few reasons why the town has decided to limit how quickly growth can happen.

“If you look back at the growth in 2000, we were up at about 14% average annual growth rate — so it was huge,” she said.

Reed explained that the town has a history of putting a moratorium on new development through its building permit allocation system, which limits how many single-family, accessory dwelling, and multi-family permits are authorized.

“When you put a building permit allocation system in place you have to justify it and you have to have very sound reason on why you’re adopting it,” she said. “They talked about the projected growth they wanted to see, how much they wanted it to slow down — they tied it to those infrastructure and transportation improvements.”

The system has been successful for the town, decreasing the growth rate to about 2%. However, when it comes to single-family homes, Reed said not all available permits get used because the town is running out of land for this kind of development, and there are other limitations on where developers can build.

“I really think our urban growth boundary and water and sewer infrastructure really kind of dictates those sorts of things,” she explained. “I think what we’re going to see more of for the town in terms of any sort of growth or development is going to be those areas of infill development.”

Reed said it’s also a priority for the town to protect its settlement communities.

“You have developers coming in you know wanting to develop those areas and so I know for the town it’s really about protecting those areas.”

However, realtors say the lack of inventory in Mount Pleasant is now impacting the price of homes in the town.

Last quarter, the average price of a home in lower Mount Pleasant was $1.3 million. In North Mount Pleasant, the average price was $1.1 million — a 20% increase from the previous quarter, according to data from the Charleston Trident Association of Realtors (CTAR).

Drew Grossklaus, the 2024 President of CTAR and the Broker in Charge at William Means Real Estate, said this is concerning for future generations and workers in Mount Pleasant.

“At those prices, it’s pretty easy to do the math and say it’s very hard to have incomes to support those housing prices,” he said.

While attainable or affordable housing projects are exempt from the town of Mount Pleasant’s permit caps, in many cases, people are being pushed to the outskirts of the area.

Grossklaus said this has now created a domino effect with further issues like traffic congestion as more people travel for work.

He said creating more options to help manage the growth will be important moving forward.

“Lowcountry Rapid Transit is something that’s going to be coming in I think could be huge, and again that affects that housing ability for people to afford and then work other places,” he explained. “So those types of things being looked at by our leaders are huge and being thought out and something that we’re going to need.”

Dr. Von Nessen also added that while creating more inventory is the solution to the gap in supply and demand, fixing the problem varies between each local municipality in the state.

“How long does it take to make up this lack of supply — really depends on the local area that we’re focused on,” he said.