House of painS.C. real estate market still laggingBy Bill Davis, senior editor JULY 11, 2014 -- While state and national real estate markets are on a definite upswing, it looks like South Carolina’s real estate market still lives in a pretty low-rent neighborhood where speculators and foreclosures may be around every corner.
According to RealtyTrac.com, South Carolina is currently tied for fourth highest rate of homes sold in cash-only transactions. The company keeps tabs on sales and foreclosures and property values across the country.
 Real estate and lending experts say that ranking shows two things: a still-tight lending market for homebuyers and deeper-pocketed speculators holding a trump card in purchasing.
And that’s cause for concern for some observers, as speculators helped to drive up real estate costs, especially in coastal areas in South Carolina, before the massive drops in valuation that came with the Great Recession.
Only Alabama, New York and Florida have higher rates of cash-only sales. South Carolina is followed by Nevada and Michigan.
Those last two states have been prime examples of real estate market gone very sour as property values plummeted in casino and auto plant cities as the Great Recession brought more and more economic retrenchment.
Additionally, South Carolina is just outside making it into the top-five states in rate of foreclosures. According to the same May study, one in every 1,199 homes in America was in foreclosure for a total of just over 1.1 million homes.
South Carolina? One in 856 homes, appreciably more than the national rate, and just behind Nevada, third at one in 717, and near half of first/worst place Florida, where it’s one in 436.
Neighboring North Carolina? Much better: one in 1,982.
Trickle versus rush
Nick Kremydas, chief executive officer at the S.C. Association of Realtors for the past eight years, said he considers South Carolina’s real estate market to be much healthier than some of the other states found at the bottom of the mentioned matrices.
Kremydas said South Carolina’s cash transactions, now at 25 percent of deals, are dropping precipitously compared to recent years -- “and that’s down from as high as 75 percent in coastal counties like Horry in recent years – I think it’s normalized to a large degree in that respect.”
Kremydas said foreclosure rates might be higher in South Carolina because of the amount of time the foreclosure process takes here, as state law requires the courts to get involved, offering mediation and other services.
That, he said, has resulted in a “trickle rather than a rush” of foreclosures hitting the state market.
Additionally, he said South Carolina, while not fully recovered from the recession, is in a better position than, say, Florida, which plagued with native insurance problems, and Michigan’s sluggish economic realties.
Turning it around
“While Michigan has been bleeding jobs, we’ve been creating new economic opportunities in our state,” said Kremydas, adding that South Carolina is a few state policy and law changes away from challenging Florida as a mecca for retirees.
Kremydas said his association is currently in the process of creating its legislative agenda for the coming year, but has already made education, health care and support for small businesses to be a cornerstone.“You can’t sell homes if there are not good schools, health care and jobs in a community,” he said.
Otis Rawl, head of the S.C. Chamber of Commerce, agreed that a more holistic approach to policy and state law will benefit the real estate market the most.
While Rawl had praise for work done in Columbia in recent years on workforce, early-childhood education and economic development, he said more has to be done to address infrastructure needs and tax policy if every part of the state’s economy, real estate included, is to become more “vibrant.”
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Burning up, near Cross, S.C.
All four power units at Santee Cooper’s Cross Generation Plant were busy this week as high temperatures and humidity zapped the Lowcountry. Behind the tree, you can see a mountain of coal that is used to fuel the facility’s four units, built from 1983 to 2008. The station, considered Santee Cooper’s most efficient, currently generates just under 2,400 megawatts of power a day. Spokesman Mollie Gore added, “All four units feature a modern, comprehensive suite of environmental control technology that removes about 95 percent of EPA-regulated constituents.” Photo by Andy Brack. Learn more: SourceWatch.org.
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Law, 1; Harrell, 0
Looks like state Attorney General Alan Wilson will get to continue his investigation into alleged campaign finance infractions by House Speaker Bobby Harrell, R-Charleston.  The S.C. Supreme Court this week voted to overturn a lower court’s decision that blocked Wilson’s ability to investigate Harrell. Harrell’s critics revealed last year that the speaker had incomplete financial receipts for tens of thousands of dollars.
Similar recent charges against a former state senator in Harrell’s hometown may have led to that senator stepping down and coming under further scrutiny from state law enforcement authorities.  The Supreme Court’s ruling may also result in future hearings on the allegations being held behind closed doors, instead of in public. Lawyers representing Harrell had earlier asked the court to remove Wilson from the case, and a lower court judge and wondered whether the allegations should be handled by existing legislative ethics committees. The highest court’s ruling precluded Wilson’s removal.
Harrell continued to complain about Wilson in a post-ruling release: “[A]fter more than a year of investigations the Attorney General was still pursuing this case even though he could not point to a single shred of evidence of criminal wrongdoing. Clearly the Attorney General’s motivations have been corrupted by political motives and that is why he needs to be replaced with a fair and impartial prosecutor. Offshore wind power could be big, study saysA new report by the National Wildlife Federation finds that Atlantic offshore wind power could generate enough electricity to power more than 5 million homes. “It’s time to launch an American offshore wind industry that can join the 58,000 people already working on offshore wind in Europe,” North Charleston Mayor Keith Summey said in a press release. “The winds are right here ready to be harvested, the technology is already proven, and we have workers ready to do the job. Let’s get to work.”  Projects currently are on track in Massachusetts and Rhode Island, but South Carolina continues to study its alternatives. Last year, Statehouse Report outlined how offshore wind power in South Carolina, the second largest shallow water offshore wind resource, had real potential to provide clean power and more jobs. More.
Public utility Santee Cooper has said that there is a lot of potential for utility-scale offshore power, which it has been studying for a decade. An offshore project with a wind turbine could cost $4 million. “Santee Cooper is continuing to look for opportunities to partner on research that would build on the knowledge Santee Cooper has gathered since 2005,” Gore said. “We have invested more than $1 million in offshore wind research ourselves already and want to partner and share costs with other stakeholders going forward.
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Ask this more often: "Is it fair to all concerned?"By Andy Brack, editor and publisher JULY 13, 2014 -- Good old-fashioned discrimination has been on my mind these last few days. Maybe the recent anniversary of the Civil Rights Act is the impetus. Or, more likely, maybe it’s because you can see vestiges of societal discrimination in the news 50 years later.  Discrimination has existed for as long as humans have. It’s built into our biology. For example, without discrimination of visual clues, we wouldn’t be able to focus our attention on working, driving and interacting. Similarly, our ears pick up thousands of sounds at any given moment, but because of aural discrimination, sounds that are “noise” are filtered out so we can hear what we want to.
As members of society, we often make personal choices that prefer one individual or group over another. You may, for example, find someone more attractive than I do, for a host of reasons, and decide to hang out with or marry that person. I may, for example, choose to ignore football (a sin to many) and act in ways to keep away from it. But personal preferences go beyond choices when prejudice denies one group of people the ability to participate in an activity available to another group. This is where discrimination becomes wrong -- because it causes one group of people to be superior to another for one reason or another. In America, our framing documents are based on the non-discriminatory concept of equality -- from “all men are created equal” in the Declaration of Independence to the various freedoms outlined in the U.S. Constitution and its amendments.  Although it took our country a long time to shed the shackles of a lot of discrimination, particularly racial, it’s still around as women and people of color face glass ceilings in terms of wages and power. It’s still around for immigrants who often are treated more harshly than others and for lesbians, gays, bisexuals and transgender people, who face unequal treatment regarding new forms of families and how they can interact with loved ones in hospitals and at the end of life.
So taking this all into account, let’s take a quick look at discrimination that’s in recent news: - Episcopal Church. LGBT people essentially were segregated by the Episcopal Church in the coastal areas of South Carolina before the diocese split. New Bishop Charles VonRosenberg, who heads the Episcopal Church in South Carolina for parishes that didn’t break away from the national church, made headlines this week for letting priests know they could conduct same-sex blessings if they wanted to. For many, it wasn’t that big of a deal because the national church dealt with the issue a few years ago and the local diocese finally was coming into the 21st century now that breakaway churches obsessed with the issue are now gone. Still, it’s a good first step for the continuing diocese, which needs to do more to heal years of wounds caused to LGBT parishioners.
- Bar closings. In Charleston, the city council is considering a resolution that would require newly-opened bars to close at midnight, instead of 2 a.m. like those now open. This proposal seems blatantly discriminatory and, if passed, likely will be challenged in court as “unequal treatment.”
- Hobby Lobby. The U.S. Supreme Court’s decision to allow corporations to be exempt from a law based on religious objections means those companies may refuse to cover some contraceptives for female employees as required under the Affordable Care Act. Many women see the ruling as blatantly discriminatory, in part because of how it restricts women from getting other health benefits that accrue from contraceptive care.
- Harrell v. Wilson. S.C. Attorney General Alan Wilson won a constitutional victory this week to investigate any wrongdoing, which in the case mentioned involves allegations of improper ethical conduct by House Speaker Bobby Harrell, R-Charleston. In one sense, the ruling is a win for anti-discrimination because it allows Harrell to be treated like everyone else, not just reviewed by his House peers.
Rotary Clubs around the world follow a four-way ethical test, which includes the question, “Is it fair to all concerned?” In ridding our state of discrimination, public officials should ask that question more often.
Andy Brack is editor and publisher of Statehouse Report. He can be reached at: brack@statehousereport.com.
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Flood Act could have big S.C. impactBy Reba Campbell
Deputy director, Municipal Association of South Carolina
Special to Statehouse Report
JULY 11, 2014 -- There is growing concern among S.C. cities and towns that property values, along with historic preservation and infill projects, could be negatively impacted after Congress made changes this year to its federal flood insurance program in an effort to keep the program afloat.  The federal government has offered flood insurance to property owners since the late 1960s through the National Flood Insurance Program. The program, which currently has 5.6 million policies in place, was created to provide flood insurance to places not covered by private insurance because of elevated risks.
While the program largely seeks to keep new construction dry during floods, it also made policies available at discounted rates for structures built in flood hazard zones before 1975, when the rules were different and fewer flood maps were available. The program provided subsidized rates for these high-risk areas to avoid pricing the owners out of their properties. The program began struggling financially following the catastrophic losses from Hurricanes Katrina and Sandy. In 2012, Congress passed the Biggert-Waters Flood Insurance Reform Act in an attempt to restore solvency to the program. The act made changes to all major components of the program, including flood insurance, flood hazard mapping, grants and floodplain management. The changes increased rates to ensure that flood insurance rates more accurately reflected the real risk of flooding. After scores of property owners complained of skyrocketing rates that threatened the loss of their homes, Congress enacted additional reforms. In March, President Obama signed into law the Homeowner Flood Insurance Affordability Act of 2014. This law repeals and modifies certain provisions of Biggert-Waters. Lisa Jones is the owner of Carolina Flood Solutions LLC, a private environmental consulting company and an expert on Biggert-Waters. Jones said the 2014 act makes a number of changes designed to ease the immediate impact of the rate increases and phase them in over several years. Still, rates will increase 18 percent a year for primary homes located in a flood zone and 25 percent for second homes and businesses until they hit a level consistent with their actual flood risk.  The changes have some municipal leaders concerned about the impact on historic preservation or infill projects, as well as property values.
The City of Georgetown lost eight buildings that housed 12 residential units and 19 retail and restaurant properties in a Sept. 25, 2013, fire. The loss of combined tax revenue to the city, county and school district was $43,205 in property taxes, $150,000 in annual sales taxes and approximately $38,000 in local hospitality taxes generated by the restaurants, according to City Administrator Chris Carter. The most critical aspect of rebuilding the fire ravaged portion of the downtown is the FEMA requirement for rebuilding, Carter said. “Because the buildings were a total loss, they no longer have their historical designation and will be considered new construction when they are rebuilt. This will require the new buildings to meet all building codes for new construction, including FEMA’s requirements for flood mitigation,” he said. Property owners must either elevate the first floor to the base flood elevation in Georgetown, which is approximately 5.5 feet above the current sidewalk elevation, or use a FEMA-approved method referred to as dry flood proofing. A dry flood proofed structure requires taking extra measures during reconstruction to ensure the structure is watertight. This extra cost to flood-proof, or elevate buildings above the existing sidewalk elevation, is a conundrum for both property owners and the city as efforts get underway to rebuild, Carter said. “Either of these two options adds cost, and the property owners are faced with a replacement cost to rebuild that exceeds the current market value for rents,” Carter said. “The flood insurance program requirements and premium costs are going to weigh heavily in the owner’s decision to rebuild.” The City of Charleston, with its historic district of some 4,800 structures on a peninsula largely in a flood plain, also expects to see an impact from changes to the flood program. Property owners with Pre-Firm (built before 1974 in Charleston) properties need to pay close attention for changes that could occur when the NFIP is reauthorized in the future, advised Laura Cabiness, director of the City of Charleston’s Department of Public Service. Under Biggert-Waters, subsidies for Pre-Firm properties were to be eliminated over time. Some property owners were seeing rates increase by tens of thousands of dollars per year, especially for properties located below the base flood elevation. “This would mean that some historic properties might be uninsurable as a practical matter,” Cabiness said. “I think it would also add pressure to reduce flood risk and unaffordable insurance premiums by elevating historic properties, something that preservationists would resist.” Before Biggert-Waters was repealed, the city became aware of property sales that fell through after the purchaser received exorbitant quotes for flood insurance, Cabiness said. Huge insurance costs would impact the value of property, which would also impact the valuation for tax purposes, she concluded.
Reba Hull Campbell is deputy director of the Municipal Association of South Carolina.
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What happens when government failsTo the editor:
 I noted your article about poverty in S.C. and it just reminded me of what I have said for years.
When government fails, it does not go bankrupt like businesses do. What happens is the demographics of her citizens look more and more like those of third-world countries! Almost 12 years of Sanford/Haley have shown my comments to be, sadly, very true.
-- Former state Sen. Phil Leventis, Sumter, S.C.
Knapp lauds story on poverty areas in blog post EDITOR’S NOTE: S.C. Small Business Chamber of Commerce President Frank Knapp had this to say on his blog about last week’s news story about poverty areas:
This eye opening report, Changes in Areas with Concentrated Poverty: 2000 to 2010, clearly tells us that South Carolina is on the wrong track when it comes to producing economically sustainable communities. Just look at the map in the Statehouse Report below and you will clearly see that this problem exists in all but only two counties. Not surprisingly, those counties are Calhoun and McCormick where the local economies have been so bad that many people looking for work have moved away. What does this growing number of South Carolinians living in “poverty areas” mean to those not actually living in poverty? It means that your local small businesses are having a harder time because there is less money on Main Street. Fewer dollars circulating locally means that the demand is not there for small businesses to hire more employees. And since most net new jobs come from small businesses under five years old and with fewer than five employees, our whole economy suffers.
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From a welcome to a waste Welcome centers. It’s good news that our state’s welcome centers are getting a makeover. There’s nothing like welcoming folks in places that look like they’re from the 1970s. More.
S.C. Constitution. Hats off to the S.C. Supreme Court for finding that Attorney General Alan Wilson has broad investigatory powers in the case between his office and House Speaker Bobby Harrell.
Cleary. Congratulations to S.C. Sen. Ray Cleary, R-Georgetown, for sounding the proper alarms on Gov. Nikki Haley’s “promise” to come up with a plan to deal with S.C. roads -- after the election. Why not now? More.
Riley. Thumbs up to Charleston Mayor Joe Riley, the subject of a flattering column by The New York Times’ Frank Bruni who wondered whether Riley was the best mayor in the country. More.
Nuclear waste. So we’ll take Germany’s secrets and its nuclear waste? At least let’s stop the latter. More.
Hot car deaths. Kids dying in hot cars is not acceptable. The state needs to do more than laws -- how about a public service campaign to educate people to not be idiots. More.
Roads. Yet another report indicates the Palmetto State’s failure to invest in road infrastructure is a key factor in its first-in-the-country fatality rate on rural roads. More.
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