COLUMBIA, S.C. — State lawmakers are discussing a bill that would allow Columbia to use its tourism taxes for workforce housing.
Residents pay a small tourism tax whenever they go out to eat, drink, or stay at a hotel in Columbia. Because tourism is up, so is the revenue, according to Columbia Mayor Daniel Rickenmann.
“It generates several million dollars a year. Our hospitality tax brings in about $14 million a year in collections," said Rickenmann.
Rickenmann said those dollars can only go towards tourism efforts like Experience Columbia, Finlay Park or Historic Columbia.
A bill sponsored by Sen. Tom Davis (R-Beaufort) would let local governments use both hospitality and accommodations taxes for the development of workforce housing.
Workforce Housing is defined as housing geared toward those making between 30 percent and 120 percent of the Area's Median Income.
In Columbia, the median income is about $48,000, according to Census data.
That means the salary range is between $14,000 and $57,000.
According to rent cafe, the average rent for an apartment in Columbia reached $1,300.
Co-owner of Transmission Arcade Josh Baumgarner said all of his employees can afford to live in Columbia, and he'd like to keep it that way.
“The city will lose new businesses opening or businesses continuing to pay that tax if you can’t afford to live downtown," he said.
In order to use the money, local governments must conduct a review of how their zoning and land use policies impact the affordability of new housing.
They can also spend the money to fund a grant program that caters to workforce development.
"In Columbia, we still have affordability downtown, but we want to protect that affordability," said Rickenmann.
Rickenmann said the change in the law would mean the city has another tool to address housing needs.
“I don't think it’s going to solve a problem, but it’s certainly going to help a problem," said Rickenmann.
Rickenmann said another effective way to drive down rents, is to reduce the city's property tax rate, which sits at 6 percent.
"Right now the average landlord collects three and a half months of rent just to pay property taxes," said Rickenmann.
Rickenmann added the city is trying different strategies to increase affordable housing. That includes selling 53 lots that the city owns and building houses on them.
"There may be properties we own that could help affordable housing or workforce housing by us donating the lot," said Rickenmann.
The Bill now heads to the House for consideration.
