by Tara Slate Donaldson, The Gainesville Times

5 September 2007

“The Republican chairman of the Prince William Board of County Supervisors and his planning commissioner, Gary Friedman, have been meeting with reporters recently to explain why proffers ought to be increased. “It’s still more than a month before supervisors take up the issue, but Corey Stewart is already firing the first salvo in his bid to get proffers increased on new homes built in the county.
“In the coming months, the board is expected to vote on whether to increase the proffer amount by 36 percent.

“The current proffer for a single-family house will rise from $37,719 to $51,113. The proffer on a townhouse will increase from $31,927 to $43,262 and the proffer for a multifamily unit will go from $19,526 to $26,545.

” ‘The staff has recommended $51,000, and that is the honest cost to the county to keep up with the cost of what is built,’ Stewart said, explaining that each new family with children costs the county an average of $51,000 in extra schools, roads, public safety and other services.

“The issue was initially raised in the spring, and supervisors were set to vote on a proffer hike in June.

“The original plan was to increase proffers for homes, businesses and nonprofits, such as churches. A general outcry led the supervisors to scale back plans so that only homes would be subject to higher proffers.

“The residential proffer hike was then delayed until the fall so that supervisors could see the latest housing numbers before making a decision. But it won’t make much difference.

” ‘Everybody knows what the housing numbers are going to be; they’re going to be bleak,’ Friedman said Tuesday. Nevertheless, ‘We have the remaining escalating problem that the cost of providing infrastructure continues to rise.’

“Friedman and Stewart maintain that since it’s becoming more and more expensive to build roads and schools, the only way to keep up without raising taxes is to raise proffers.

” ‘It has to be paid for one way or another,’ Friedman said.

“Opposition
“Builders haven’t been pleased.

” ‘The building industry does want to pay its fair share,’ Mark Granville-Smith, president of the Prince William Chapter of the Northern Virginia Building Industry Association, told the board when the issue first came up earlier this summer.

“But, he added ‘we have issues with the numbers.’

“Granville-Smith argued that the 36-percent increase, on top of last year’s increase, is a hard blow to an industry already being battered by a falling housing market.

” ‘It’s not time to kick an industry any more when it’s down,’ he said. ‘We do believe now is not the time to raise those fees.’

“The other problem, Granville-Smith had said, is that adding more than $51,000 in fees onto the cost of a home makes the county’s affordable housing problem worse.

“He and other members of the building industry have argued that builders will have no choice but to pass the additional fees on to home buyers.

“But Stewart said he doesn’t believe that. The chairman has long maintained that the market determines the price of a house. A house may cost $1 million to build, but if the going rate is only $500,000, it won’t sell for $1 million, he said.

“With the housing market in a slump, Stewart said he hopes that the higher proffers will prompt developers to stop building in the county for a while.

“Stewart and Friedman call the proffer hike a win-win for residents because development will slow down and the resulting decrease in supply will mean that existing homes will be valued higher.

“The only ones hurt will be the building industry, and it needs to pay its fair share and cover the cost of the new residents it’s bringing in, Stewart said.

“The downside, he acknowledged, is that ‘an awful lot of business’ in the county depends on the building industry, and a lot of residents are employed by building-related companies.

” ‘There’s no question about that,’ he said. ‘Because of the housing market, a lot of people are losing their jobs; businesses are hurting.’

“But, he added, ‘The positive side is at last this cooling off of the housing market is allowing us to catch up with roads and schools.’

“Grandfathering
“In addition to raising proffers, the resolution will also change the date on which new proffers take effect.

“Currently, when a developer files an application, that development is then subject to the existing proffer. If the proffers increase, the developer is still grandfathered into the old rates.

“The problem, said Friedman, is that sometimes several years pass between the time the application is submitted and the time the development goes to a public hearing. The proffers may increase several times, but the developer still gets to stick with the old, lower rates.

“The new regulations will set the proffer date as the date of the first Planning Commission hearing, which is the first public hearing on a new development. From that time on, the developer will be grandfathered in. That significantly shortens the amount of time that a developer can hang onto the old rates and the difference will come to millions of dollars for the county, Friedman said.

“Timing
“The supervisors are expected to take up the proffer issues on Oct. 19. Stewart said the timing is important for two reasons.

“First, he said, there are no major projects in the works right now. If a developer had already applied for a huge number of houses, increasing the proffers and simultaneously shortening the grandfather clause would prompt huge opposition. Since things are quiet at the moment, the timing is ideal.

” ‘What better time to do it then right now when we’re going to get less resistance?’ he asked.

“The other reason is that all eight supervisors are up for re-election in November. Even those who aren’t inclined to increase proffers may be disinclined to be seen as siding with developers so close to an election.

” ‘It’s important to get it done before the election because once the election is done, inertia for everything goes away,’ he added.”