A BILL TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY ENACTING THE "SOUTH CAROLINA AFFORDABLE HOUSING TAX-EXEMPT REIT ACT" BY ADDING CHAPTER 25 TO TITLE 31 SO AS TO ESTABLISH A TAX-EXEMPT REAL ESTATE INVESTMENT TRUST (REIT) TO INCREASE THE SUPPLY OF AFFORDABLE HOUSING STATEWIDE.
H3737 would create the “South Carolina Affordable Housing Tax-Exempt REIT Act” by adding a new chapter to Title 31 of the South Carolina Code. The bill establishes the South Carolina Affordable Housing Real Estate Investment Trust (SCAH-REIT), a public-private investment vehicle intended to fund, develop, and manage affordable housing projects statewide. The legislation defines affordable housing as units affordable to households earning no more than 60% of area median income and authorizes the REIT to invest in new construction, rehabilitation, and land acquisition for future development.
The bill also creates a governance structure for the REIT, with a board that includes representatives from the state housing finance authority, private real estate, banking/finance, nonprofit housing organizations, gubernatorial appointees with affordable housing expertise, and the State Fiscal Accountability Authority. It requires annual reporting to the General Assembly and annual audits to ensure compliance. The act would take effect upon gubernatorial approval, with board appointments due by January 1, 2026, and the REIT to be established by July 1, 2026.
If enacted, the bill would significantly alter South Carolina law by creating a new statutory framework for a tax-exempt affordable housing REIT and by granting state tax exemptions for qualifying income, dividends, and property. It would also authorize an initial $50 million allocation from the state housing trust fund and allow the REIT to raise additional private and philanthropic capital. The measure would affect investors, housing developers, nonprofits, housing authorities, and state agencies responsible for housing finance and fiscal oversight, while potentially reducing property and income tax revenue associated with qualifying projects.
The bill’s stated purpose and structure suggest generally favorable sentiment toward addressing South Carolina’s affordable housing shortage through a market-based, public-private model. The absence of committee transcripts or recorded votes means there is no documented floor or committee debate in the provided material, but the bill’s findings frame it as a response to a critical statewide housing need and a way to leverage private investment rather than rely solely on subsidies. Overall, the proposal appears oriented toward bipartisan or pragmatic housing-policy support, though no formal support or opposition is recorded here.
The main points of potential contention are the use of public funds, the breadth of the tax exemptions, and the policy choice to use a REIT structure for housing development. Critics could question the $50 million initial state allocation, the exemption from corporate income tax, individual income tax on dividends, and property taxes for up to 25 years, as well as whether the benefits will sufficiently translate into affordable units. Supporters are likely to emphasize the bill’s oversight provisions, affordability requirements, and the ability to attract private capital and expand housing supply without relying entirely on direct subsidies.