Hilton Head planning commission initiates drafting to allow workforce housing in medical district

The Town of Hilton Head Island Planning Commission voted unanimously to ask staff to draft amendments to Title 16 of the Land Management Ordinance that would allow new-construction workforce housing within the medical district, the board decided at a regularly scheduled meeting.

Assistant Town Manager Sean Lininger, who presented the request, said the application was submitted by a private development team working with Novant Health and the Coastal Community Development Corporation. "The request before you is coming from a a boat development. They are working in partnership with Novant Health and the Coastal Community Development Corporation," Lininger said, describing the procedural options for initiating code text changes and the review steps that would follow.

The proposal covers a roughly 12.6-acre site near the hospital (staff said much of the parcel is wetland and about 5.4 acres are upland). Staff said the property contains about 30,000 square feet of existing nonresidential buildings that are not financially practical to convert. The applicant told the commission it would seek about 126 apartment units in several three-story buildings, with 30% of units targeted to households at up to 80% of area median income (AMI) and the remaining units staggered across higher AMI bands up to 150%.

Developer representative Keith Kostreski said the income mix is intended for a range of island workers. "We've modeled it out that we have 30% at 80% AMI or below, and then we're staggering it between 100, 120 and some of the units at 150," Kostreski said, adding the project would serve health-care staff, teachers, service employees and first responders.

Commissioners pressed staff and the applicants on environmental and land-supply concerns. Chair Bruce Sebel asked how the commission could be confident the change would not cause significant adverse impacts to wetlands or other natural resources; Lininger said those issues would be addressed during development plan review under the town's existing regulations. "The assurance would come through the development plan review process," Lininger said.

Applicant Brian Quinn described the existing buildings as damaged and difficult to convert. "They're not conducive…the roof's been leaking for 4 or 5 years straight. It's a moldy mess in there," Quinn said, explaining why the team favors new construction rather than conversion.

Staff and applicants said protections would be written into the proposal: residential construction would be limited to areas specified by a PD-2 overlay rather than applied across the entire medical district, at least 30% of units would meet workforce affordability thresholds, and occupancy would be tied to island employment (the staff report notes full-time is written as 30 hours per week for workforce housing agreements). Staff also said minimum lease terms would exclude short-term rentals.

After questioning and brief discussion, a commissioner moved to direct staff to proceed with drafting the ordinance text for the amendment and return it to the commission for review; the motion was seconded and the commission approved the initiation by voice/raise of hands. The commission instructed staff to return a draft—likely at the August meeting—for further review and potential forwarding to Town Council.

No members of the public signed up to speak on non-agenda items, and the meeting adjourned.