South Carolina H 3737: South Carolina Affordable Housing Tax-Exempt REIT Act

Bill Text

2025-2026 Bill 3737 Text of Previous Version (Jan. 15, 2025) - South Carolina Legislature Online 

South Carolina General Assembly
126th Session, 2025-2026

Bill 3737

Indicates Matter Stricken
Indicates New Matter

(Text matches printed bills. Document has been reformatted to meet World Wide Web specifications.)

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.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 
1. This act may 
be cited as the "South Carolina Affordable Housing Tax-Exempt REIT Act."

SECTION 2. The General Assembly finds that:

 (1) 
South Carolina faces a critical shortage of affordable housing for low- to 
moderate-income families, which impacts workforce stability and community 
development.

 (2) 
A tax-exempt REIT focused on affordable housing will encourage private 
investment, leverage market-based solutions, and reduce reliance on government 
subsidies.

 (3) 
This act creates the framework for a South Carolina Affordable Housing REIT 
(SCAH-REIT), offering tax exemptions to investors while ensuring the 
development and maintenance of affordable housing.

SECTION 3. Title 31 of the S.C. Code is 
amended by adding:

CHAPTER 25

Affordable 
Housing Tax-Exempt REIT

 Section 
31-25-10. For the purposes of this chapter:

 (1) "Affordable housing" means housing 
units affordable to individuals or households earning no more than sixty 
percent of the Area Median Income (AMI), as determined annually by the U.S. 
Department of Housing and Urban Development (HUD) for the applicable region.

 (2) "Board" means the governing body 
overseeing the SCAH-REIT.

 (3) "SCAH-REIT" means the South 
Carolina Affordable Housing Real Estate Investment Trust, established under 
this chapter.

 (4) "Tax-exempt REIT" means a REIT 
exempt from state corporate income tax, individual income tax on dividends, and 
property taxes on affordable housing projects, as provided in this chapter.

 Section 
31-25-20. (A) There is established 
the South Carolina Affordable Housing Real Estate Investment Trust (SCAH-REIT) 
to fund, develop, and manage affordable housing projects statewide.

 (B) The SCAH-REIT shall operate as a 
public-private partnership, open to investments from individuals, corporations, 
nonprofits, and housing authorities.

 (C)(1) The SCAH-REIT is governed by a 
board consisting of:

 (a) one representative from the South 
Carolina State Housing Finance and Development Authority;

 (b) one representative from the private 
real estate sector;

 (c) one representative from the banking 
or finance industry;

 (d) one representative from a nonprofit 
organization focused on housing;

 (e) two members appointed by the 
Governor with expertise in affordable housing development; and

 (f) one representative from the State 
Fiscal Accountability Authority.

 (2) The board shall oversee the REIT's 
operations, investments, and compliance with this chapter.

 Section 
31-25-30. (A) The SCAH-REIT and its 
investors are exempt from South Carolina corporate income taxes on income 
derived from affordable housing projects.

 (B) Dividends paid to investors in the 
SCAH-REIT are exempt from South Carolina state income taxes.

 (C) Properties owned by the SCAH-REIT 
that meet the affordable housing definition are exempt from property taxes for 
up to twenty-five years.

 Section 
31-25-40. (A)(1) At least seventy 
percent of the SCAH-REIT's assets must be invested in affordable housing 
projects that meet the sixty percent AMI affordability standard.

 (2) Remaining funds may be invested in 
mixed-income or market-rate developments, provided they include at least twenty 
percent as affordable units.

 (B) Projects funded by the SCAH-REIT 
may include:

 (1) new construction of affordable 
housing;

 (2) renovation or rehabilitation of 
existing properties; or

 (3) acquisition of land for future 
affordable housing development.

 (C) The SCAH-REIT shall distribute at 
least ninety percent of its annual net income as dividends to investors.

 Section 
31-25-50. (A) The SCAH-REIT shall 
submit an annual report to the South Carolina General Assembly, detailing:

 (1) properties owned and managed;

 (2) number and percentage of affordable 
units created or maintained; and

 (3) financial performance, including 
dividends paid to investors.

 (B) The State Fiscal Accountability 
Authority shall conduct annual audits of the SCAH-REIT to ensure compliance 
with this chapter.

 Section 
31-25-60. (A) The State of South 
Carolina shall allocate fifty million dollars from the state housing trust fund 
as initial funding for the SCAH-REIT.

 (B) The SCAH-REIT is authorized to 
raise additional capital through the sale of shares to private investors, 
corporations, an