Falling behind: Four steps to put Columbia in position to compete for new investment

Editor’s note: This is the first in a four-part opinion series.

For years, people have speculated about the cause of the city of Columbia’s high property taxes, with too much land owned by entities that don’t pay taxes long being the excuse.

No longer do we have to guess. A comprehensive, data-based study comparing Columbia’s tax model with other cities in South Carolina by the Acuitas Economics firm makes clear property taxes’ key relationship to growth.

Here’s what the study says:

At the state level, South Carolina’s economy has boomed since 2010, experiencing the eighth-highest growth rate in the nation over that time. Unlike its municipal counterparts Greenville, Charleston, Lexington and Rock Hill, however, Columbia’s economic growth has not kept pace.

Columbia has the lowest percentage of business growth among cities of comparable size in South Carolina (16 percent to Charleston’s state-leading 37 percent); the lowest GDP growth (34.5 percent to Charleston’s 63 percent); the lowest average wages per hour ($24 to Rock Hill’s $29); and the highest poverty rate (23 percent to Greenville’s 14 percent).

So how does Columbia generate new business development and investment?

The city has to make it easier for people to invest in Columbia. If we want new buildings, retailers, restaurants and hotels, obstacles to entrepreneurship and urban development must be removed. Jobs and tax revenue will result.

The first step is a simplification of the zoning process. Currently, a new project seeking a zoning change may have to go through three different committees. Each of them can take from 60 to 90 days to make a decision. A proposed apartment complex on Assembly Street, for example, has been in the approval process for four and a half years, and still has not received approval, as it is tied up in the city’s Design/Development Review Committee.

The DDRC was created several years ago to take the decision-making pressure for new development off the mayor and City Council. Unfortunately, as it was set up, any appeals to its decisions must go through the state circuit court, which can become a major barrier for new projects.

It is time to disband the DDRC and have the mayor and city council reclaim their sovereign zoning rights. In fact, Columbia’s Planning Commission, Board of Zoning Appeals, and City Council should be the only three approval entities. And, City Council should be the only appeal venue, not the court. As elected officials, they are accountable to citizens in ways the DDRC will never be.

Urban economic development is different from county economic development, and the city needs to encourage investment that creates more storefronts and mixed-use developments. A streamlined, predictable zoning process ensures this.

Secondly, Columbia’s long building permit approval process discourages investment. Compared with other municipalities in South Carolina, Columbia’s is difficult to navigate. Its demands create delays and unnecessary costs that projects can ill-afford. A timely permitting process is a must.

A perfect example is Columbia requiring on-site parking for every business, which discourages many small businesses and entrepreneurs from even getting started. Good urban zoning understands demand for parking is a good thing for a district, and an overabundance of asphalt parking lots is an eyesore as well as a waste of commercial space.

Land under a car outside of a restaurant costs the same as the land under a table inside the restaurant. The difference is one generates revenue and the other does not. We have enough parking lots; what we need are more thriving businesses. Modern urban planning models, with their best practices, can show us the way.

Next, the city must allow property tax densities to grow. We should encourage developers to build up (vertically) or reduce the size of urban residential lots in areas where it makes sense, both of which would generate property tax revenue. In other words, by increasing density, more people would be paying property taxes on existing blocks without the city having to build new streets or incur other infrastructure costs.

And lastly, the current water and sewer expansion fees are deal-killers. Their removal would be a boost to small business start-ups and encourage the rejuvenation and reuse of property and commercial districts.

A simplified zoning process helps revitalize existing areas. A streamlined and predictable permitting process encourages development. Having the mayor and city council as the final determinations of approval or disapproval means greater accountability to citizens. And increasing tax densities means a larger tax base, which ultimately can reduce property taxes.

All of these measures are within Columbia’s power to enact.

Doing so will encourage development for years to come.

Joe E. Taylor, Jr. is CEO of Park and Washington LLC and a lifelong resident of Columbia. He also served as S.C. Secretary of Commerce from February 2005 through January 2011 and led the state’s efforts to land the national economic deal of the year in 2009 and again in 2010.