A Plea to Columbia: Want More Investment? Lower Taxes.

Over the summer, I was very fortunate and blessed to have been involved with Columbia Opportunity Resource (COR) an NPO that was created to incubate growth from young professionals, executives, and leaders in the Columbia area and to encourage these future leaders to stay in the area. Through my time there, I have learned so much about the story of Columbia and how it has continued to shed its reputation as a government town with investments in our University, our community through festivals and events, and private development ranging from new apartments and hotels.

That being said, as a person who loves to travel I was also able to visit Greenville, Charleston, and Myrtle Beach on several occasions and I absolutely marveled at the amount of development that has easily outpaced Columbia's in many ways. With Greenville, you see mid rise mixed use developments popping up left and right, leading to a Downtown constantly filled with residents and tourists around Falls Reedy, enjoying its fabulous dining scene, or simply taking a stroll down Main St. In Charleston's case, a combination of new townhomes, apartments, and condos all while keeping the historical charm of the city has led to a tourist and local renaissance for the state's largest city. For Myrtle Beach, high rise condominiums and tourist attractions are now towering the skyline next to one of the nation's most popular beaches. All in all, it is very easy to say that despite the growth Columbia has seen in recent years, it severely lacks behind our sister cities in the state despite the state of South Carolina being in the top quartile of states in terms of economic growth. In fact, a recent study commissioned by the city has found the following facts that I found interesting.

1. Demographically wise, Columbia's age demographic of 25-54 grew just 2.5%, compared to 15% in Charleston, 34% in Greenville, and 64% in Rock Hill.
2. Despite Richland School District 1's student population has decreased by 14%, despite school taxes making up a significant portion of the tax millage rate.
3. Columbia's city proper population grew just 7,000 from 2010-2020, compared to Greenville's 22,000 and Charleston's 30,000 increase in the same time frame despite USC's attendance growing massively within the same decade.
4. Richland County has seen an only 7.8% growth in the past decade compared to 17.2% for Charleston County, 15.6% for Greenville County, and 23.9% for York County (Rock Hill).
5. The median household income for Columbia is $45,663, compared to Charleston's $64,599, Lexington's $68,219 and Greenville's $53,571.
6. The percentage of individuals in poverty in Columbia is a staggering 22.5%, compared to 14.3% in Charleston, 13.9% in Greenville, and 8.6% in Lexington.
7. Property value in Columbia has grown just 16% in the past decade, compared to 36% in Greenville, 171% in Rock Hill, and 217% in Charleston.
8. The median home value in Columbia (2018) is $173,400 compared to Charleston's $308,100 and Greenville's $273,100.
9. In addition to the previous statistic, home prices in the Columbia area were the only ones to depreciate in value during the Great Recession recovery (2013-2014 Q2), and have lagged several percentage points behind Greenville and Charleston since.
10. There are only 9,935 private firms in Richland County (a 16% growth from 2010-2018) compared to Charleston County's 15,618 (37.1% growth) and Greenville County's 14,187 (20.6% growth)
11. From 2014-2018 only 42.9% of Columbia residents 25+ held a bachelors degree despite being home to USC, compared to 52% in Charleston and 48.3% in Greenville during the same time frame.

Not only are the demographic and value statistics concerning, but also are the economic development statistics. Compared to other cities in South Carolina, Columbia has seen very little multifamily development within the urban core; The Palms was the first new multifamily development in the urban core in decades, meanwhile we are seeing nonstop development left and right in other cities throughout the state. While there are several developments planned that are not student housing such as a brand new proposal right next to the Congaree and Huger Flats, rising interest rates and construction costs combined with our high tax rates will make it difficult to potentially get these projects and other prospective projects off the ground. If this happens, the reputation of Columbia being a difficult place to get developments built will spread, and will lead to a less than bullish market which will prolong Columbia's lackluster development numbers compared to our neighbors. This can be seen already with Columbia's Downtown population numbers; according to Point2Homes only 2,851 residents call Downtown Columbia home compared to Greenville's 12,745 and Charleston's 8,587.

In addition to the lack of multifamily development, Columbia has not seen the industrial revolution that other cities in South Carolina has seen. Other than Trane and Scout Motors, Columbia does not have a wide variety of industrial and manufacturing giants that are relocating to the region, rather most of them have relocated to our sister cities in Charleston, Greenville, or Charlotte. Some examples of this include BMW, Michelin, ZF, GE, Siemens, Shermin-Williams, amongst other giants in Greenville and Boeing, Volvo, Bosch, and Mercedes Benz in Charleston. How did Greenville and Charleston get such a diverse group of manufacturers and companies to come to their respective regions? A pro-business approach with lower taxes and incentives. While our ability to capture Scout Motors and Trane was outstanding, what if these are the only companies that we can catch, despite our less than friendly tax codes? There's a reason why Columbia continues to be a public sector driven economy with a lack of diversification in private sector jobs with limited opportunities despite access to very high quality education.

This is especially concerning for the city; Columbia has ambitious plans to retain the students that they host thanks to the University of South Carolina, in fact 30,000 plus attend the university annually. However, I have had conversations with many of my colleagues throughout my time in University and almost all of them have reached the same conclusion: they are leaving Columbia once they are done with their time at USC. This is surprising, considering that approximately 52.43% of the student body are out of state, something that the university prides itself on. You would figure that with the unique combination of talent, wealth, and ideas that would otherwise not be available to the university and city that these students would call Columbia home for the foreseeable future, however this is not the case. The reasoning for this can be narrowed down to 2 main causes:

1. There are not enough high paying jobs or opportunities for students to get started in their careers.
2. Columbia is missing the pizzazz and culture that young professionals want from a city.

In the case of the first reasoning, I myself have experienced this. When I have been applying for jobs, not only am I not seeing opportunities for entry level jobs in Columbia that pay well, but there are no "leadership development programs" that are being offered to help foster the information I have learned while here at USC. Leadership development programs are similar to a Co-Op; employees would spend 2 years in a 6 month rotational program getting exposure to different fields within a company which will eventually lead to a full time position with the company. These are opportunities that students and recent graduates seek, as it allows them to have job security while learning the ropes of their field with chances for them to move up the ladder and diversify their knowledge. Unfortunately, in Columbia the only program I could find was with Apex Tool Group, and that was in Lexington, SC. The programs were instead being offered in Greenville (Siemens, BMW Group, etc.), in Atlanta (Clorox), Charlotte (Ally Financial), amongst other areas nearby. In fact, there were leadership development programs being offered all across the nation (Michigan with Ford and GM, Texas with Baker Hughes, Tennessee with Tractor Supply Co, etc.). Even away from leadership development programs, most of the entry level jobs I have found were in Greenville (Lockheed Martin) and Charleston (Boeing and Mercedes Benz). As much as I love Columbia and want to settle down here myself, if there better ventures and prospects then I simply must follow them to help my career grow and this is something that is not only happening to me, but many of my colleagues as well.

For the second reasoning, while the Columbia Riverwalk, State Museum, and Riverbanks Zoo are great attractions, most people I have talked to say that they would much rather live or relocate to Charleston, Greenville, Atlanta, and Charlotte not only thanks to better job opportunities, but also city culture. Everywhere you go in these cities you see new restaurants pop up left and right, festivals being held every week, cranes dominating the skyline, new luxury apartments and shops opening everywhere you look, and overall jubilance and optimism within the city limits. While I am not saying Columbia doesn't have jubilance and optimism, the lack of grow in terms of attractions, amenities, and development can lead to this reputation that Columbia is "boring" compared to other cities and hence leads to a less than positive reputation amongst young professionals who are seeing a vibrant work/life balance.

Ultimately, these two causes can indeed be linked to the high tax rate, which is causing companies to overlook Columbia when trying to find a new home for their headquarters or operations and is causing development, especially multifamily development to slow down dramatically thanks to high costs, leading to less than ideal revenues to come into the city and causes this endless cycle of maintaining or even increasing tax rates to try and balance a growing deficit. This in turn causes a less than favorable reputation, all amongst developers, companies, and the general public, and has led to Columbia to become the forgotten city amongst a plethora of cities experiencing rapid growth: from Atlanta, Charlotte, Greenville, Charleston, Myrtle Beach, Rock Hill, just to name a few.

While I might not be an expert on tax codes nor may have an advanced knowledge of what is truly causing Columbia to lag behind our sister cities (I myself found the report to be very dense and the report itself stated that the tax rates are not the sole cause of Columbia's lack of growth), when I keep hearing in conversations that our tax rate is way to high and is leading to a lack of investment and development, then I know that either our tax codes have become so complex that it is impossible to create reform or our city does not have a full understanding of how much our tax rates have resulted in our slow growth. If I and many other leaders can see this problem and the results it has caused, then surely it must be fixed. Columbia has so much potential; it is an up and coming city full of amazing festivals and events such as Soda City, home to a world class university in the University of South Carolina, and has seen a complete transformation in its Downtown, Vista District, and Five Points but yet it still feels like we are capping ourselves from our true potential.

I think that by lowering the tax rates, three simplified results will happen:

1. Companies will be heavily drawn to our pro business policy thanks to decreased and simplified tax rates, top tier young professional talent, and access to easy transit thanks to I-26, I-20, and I-77 and will at least consider relocating here. Thanks to lower property taxes, developers will be able to self develop, secure an anchor tenant (mentioned in my previous article), and open the doors to cranes in the sky, creating a vibrant downtown full of high paying jobs.
2. Because companies are relocating to Columbia, multifamily development will increase to keep up with demand as young professionals seek a live/work balance where they don't have to commute to work and are close to a vibrant urban core. Rents will increase, but will justify construction of new construction thanks to lower tax rates (specifically property tax), leading to a construction boom of mixed use and residential projects. This will also allow small business owners to succeed in Downtown thanks to increased foot traffic and lower tax rates for their operations, leading to a retail and restaurant renaissance.
3. Amenities and attractions will be proposed and developed thanks to all the surrounding development going on. This can be seen in an example in Sacramento, CA where a local developer has planned a 2300 seat theater because of a wave of surrounding multifamily developments surrounding the theater. In development, you often hear the phrase "If you build it, they will come". Well this is exactly what will happen as more office and residential space is constructed as a result of lower tax rates; amenities and attractions will increase as the community changes for the better.

I hope that the city in the near future can do what is needed to attract development and jobs; while we are seeing a renaissance in Columbia despite the current conditions, it still feels like the chains need to be broken off and the door fully let open, because as long as that door remains partially closed, the more and more Columbia will continue to be the "forgotten city" in a region that is seeing rapid growth and development. So I ask the city of Columbia this one simple plea: lower our tax rates so our city can become the city we all want it to be.