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Affordable housing proposal gets OK from state agency

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The sweeping changes proposed for Hilton Head Island's affordable-housing programs have received the thumbs up from a state housing agency, and the town is ready to bring them up for final approval.

The South Carolina State Housing Finance and Development Authority, which administers federal and state low-income housing programs, wrote the town that it could help homebuyers obtain mortgages and pay for downpayments under the town's proposed program.

The proposal offers developers incentives, such as allowing them to construct more homes per acre than normally would be allowed.

The town included a stipulation that the home prices increase no more than 4 percent per year. The only major change in the most recent revision of the plan would waive that cap in the case of foreclosures, which the authority requested. The authority said the cap could prevent banks from recouping foreclosure costs.

The town is keeping the proposed requirement that no more than 40 percent of a residential development be affordable housing. The cap will ensure that affordable-housing is mixed in with regular homes, said Randy Nicholson, town comprehensive planning manager.

"We just think the better route in that regard is to really mix market rate and affordable rate," he said Wednesday. "We're kind of sticking to our guns on this one."

The changes completely rework the current affordable-housing programs, which have been used only a few times. Developers and town officials have criticized the programs as confusing and unworkable.

The Town Council's Planning and Development Standards Committee recommended approval of the plan Wednesday. The issue will go to the full council for approval, which could come later this summer.