Charleston

Goodbye old friend

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And hello 2017!

I bought a car on the first business day of 2017.

For most folks, buying a car is not a big deal, but I am definitely not a car person!  I drove my mother’s last car for almost eleven years after her death in 2006 and was embarrassed to shed a few tears at the dealership when I sentimentally traded it in on January 2. That car has 200,000 miles on its odometer! It’s still in great running condition, and I hope it finds a good home with someone, maybe a teenager, who needs safe and inexpensive transportation. Before my mother’s car, I drove a car I bought from a deceased friend’s estate. Are you detecting a pattern in my vehicular history?  Until this week, no car dealership had made a dime on me in the past 15 years!

My colleague and friend, Tom Dunlop, on the other hand, is definitely a car person. He currently drives a bright red late model Mercedes which he will upgrade this spring for the mere reason that two years have passed. His dealership loves him! In addition to trading every two years, Tom takes donuts to the staff when his car is serviced. What a nice guy! We’ve enjoyed that shiny red Mercedes as our lunch vehicle and can’t wait to see what Tom decides will be our new fancy ride in the spring.

new-year-new-startWhy is this car talk relevant to dirt law in 2017? It’s relevant because our success in the housing industry this year may depend on whether Americans and specifically South Carolinians are really home ownership people.

There are some reasons for concern. Interest rates are climbing. The mortgage interest rate deduction is under attack in Congress. The future of the CFPB may be precarious under the new administration and because of pending litigation challenging its constitutionality.  Some financial advisers are recommending renting as a better economic alternative for many Americans. Some retirees are being advised to sell the large homes where they raised their families in exchange for nifty, low-maintenance town homes, condominiums and even rental apartments.

But unlike my personal lack of thirst for new cars, I believe many Americans and many South Carolinians have an enduring thirst for new and upgraded residences. And I believe their thirst is most often quenched only by purchasing those residences. We have been taught that home ownership is an excellent investment vehicle coupled with a tax advantage. This advice goes back several generations. This wisdom is so ingrained that the counsel to retirees to rent shocked me! I had to read it from several sources to believe it was serious and sound advice for some folks.

And, thankfully, the economy is continuing to improve. Zillow is reporting that the U.S. housing market has regained all the value it lost during the housing crisis. South Carolina is particularly poised for success. Charleston is one of the fastest growing markets in the country. Hilton Head is digging out and rebuilding from Hurricane Matthew. The Rock Hill/Fort Mill area is growing toward Charlotte rapidly. It is impossible to ride around Myrtle Beach, Greenville and even Columbia without dodging construction activity. My own office’s numbers have improved during 2016, and I budgeted up for 2017. I suspect most South Carolina dirt lawyers are looking for a better year in 2017 than in 2016 assuming they can maintain their momentum and sustain the excellent staffing that momentum requires.

I am optimistic!  Here’s hoping Americans and South Carolinians continue to be home ownership people. And here’s hoping 2017 is a healthy, happy and prosperous year for you!

Court of Appeals Refuses to ‘Horse Around’ with Zoning Appeals Decision.

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Will some Charleston carriage horses be evicted?

Condominium projects take on all shapes and sizes in beautiful, historic, downtown Charleston, where the population of tourists and residents increases daily.

An old historic house may maintain its white-columned exterior while housing four or six residential condominium units. The stately carriage house out back may be a separate unit. An office building may look like any other brick-façade four-story building from the exterior, but the interior may contain a courtyard complete with fountains, and each office may be an owned separately as a condominium unit. A residential lot may be subject to a restriction covenant that prohibits subdividing, but a creative developer may use a Horizontal Property Regime to create multiple units anyway.

But in a case decided on June 29, the Court of Appeals drew the line at a horse stable condo project that would have been created to resolve a zoning issue.*

horse carriageThe Charleston Board of Zoning Appeals had denied the application of Arkay for a special use exception to operate a carriage horse stable at 45 Pinckney Street in the historic City Market District. The property was located within 93.5 feet of a residential district, and the special exception required a separation of 100 feet.

To separate the “stabling activity” from the residential district, Arkay proposed an HPR to divide the building into two units. The rear portion of the building would house Unit A which would consist of six stalls in which the horses would be fed, groomed and stored. The front portion of the building would house Unit B which would consist of two offices and would be subject to an appurtenant easement for the benefit of Unit A for ingress and egress to Pinckney Street. Unit B would also be subject to a restrictive covenant prohibiting the use of that space as a stable.

Units A and B would be separated in the middle of the building by a common area consisting of two tack rooms, two restrooms, an area for customer waiting, and an area for customer loading and unloading. Because its horse stalls would be located 119 feet from the nearest residential zone, Arkay contended the stabling activity complied with the zoning ordinances separation requirement.

Arkay’s argument was based on the premise that the zoning ordinance’s use of the word “stable” described a use and not a physical structure. In rejecting this argument, the Board noted that only one building occupies 45 Pinckney Street, and the proposed HPR did not alter that circumstance. On appeal, the Circuit Court held that the separation requirement applied to the use, not the physical structure.

The Court of Appeals agreed with the Board, stating that the ordinance did not describe “uses” for the property but rather established prerequisites on how a stable must be configured and how it must operate to receive a special use exception. Because the building that would keep the horses encompasses the entire lot, the Court found that it is a stable for the purposes of the ordinance. Even though the horses would be kept in the rear of the building—and would be separated from the street by areas for customers, tack rooms, restrooms and offices—this does not change the building’s status as a stable, according to the Court.

Maybe the Supreme Court will see it another way, because who doesn’t love a horse-drawn carriage ride in historic Charleston?

 

*Arkay, LLC. v. City of Charleston, South Carolina Court of Appeals Opinion 5419, June 29, 2016.

Trulia’s Blog Paints a Rosy Picture of Housing in SC for 2016

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Charleston is identified as the second hottest market in the country! Columbia is seventh!

_SC FlagIt’s budget time for me and for many real estate professionals. We are reading everything we can uncover on economic forecasts, and for me, the focus is real estate in South Carolina. Today, an interesting blog entitled “Housing in 2016—hesitant households, costly coasts, and the bargain belt” popped up in my newsfeed in Facebook. The blog, dated December 3, was written by Ralph McLaughlin of Trulia, the online residential real estate site for buyers, sellers, renters and real estate professionals.

As a part of its annual forecast for housing, Trulia commissioned Harris Poll to conduct a survey in November of about 2,000 Americans concerning their hopes and fears on housing. The survey indicated that the American Dream of home ownership is alive and well and continues its resurgence since the economic downturn.  The blog states that the percentage of Americans who dream of owning a home is up 1 point to 75% and up 2 points among millennials to 80%. But 22% of Americans believe it will be harder to get a mortgage in 2016.

Hesitant households in the title of the article is a reference to the obstacles consumers perceive to buying a home:  down payments, credit history, qualifying for a mortgage and increasing home prices are the top four.

Costly coasts are the expensive metro markets in the West and Northeast. Trulia is expecting those markets to cool because affordability has decreased, homes are staying on the market longer, and saving for a down payment is taking decades. In addition, consumers in those markets are pessimistic about housing.

The good news for us in The Palmetto State is that we are located in the so-called bargain belt, the highly affordable markets in the Midwest and South, where the survey shows consumers are upbeat about housing and where Trulia is expecting growth housing.

Trulia also identifies ten markets with the strongest potential for growth in 2016, and two of them are ours:

  1. Grand Rapids, Wyoming
  2. Charleston, South Carolina
  3. Austin, Texas
  4. Baton Rouge, Louisiana
  5. San Antonio, Texas
  6. Colorado Springs, Colorado
  7. Columbia, South Carolina
  8. Riverside-San Bernardino, California
  9. Las Vegas, Nevada
  10. Tacoma, Washington

Everyone paying attention is aware that the Federal Reserve has expressed a commitment to raising interest rates either by the end of the year or early in 2016, and we have seen the stock market respond each time Janet Yellen speaks on this topic. But if this projection and others that indicate the market in South Carolina will be strong in 2016 are correct, we should expect a strong 2016. Perhaps by the end of the first quarter, we will begin to feel the worst of the TRID transition is behind us, and we will be ready to embrace the growth we are anticipating.  Let’s all look forward to the ride!