Citizens for Balanced Growth

Category: Proffers; Tax Impacts (2007-2015) (Page 1 of 2)

Prince William BOCS Approves Proffer Increases

by Stacy Shaw, Bristow Beat

18 June 2014

View the PDF version here

“The Prince William Board of County Supervisors unanimously agreed to increase county proffers Tuesday, and adopt the new monetary guidelines as set forth by the county planning department.

“Proffers are defined as monies the developers voluntarily provide to a jurisdiction in order to pay for services the new residents would use or require. The county last revised its proffer guidelines in 2006.

“Chairman Corey Stewart (R) commented this was one of the rare occasions when the supervisors have voted in unison. The proffers, which have not been updated in eight years, were lagging behind neighboring jurisdictions.

“This new plan would increase county proffers on single-family homes by 19 percent, townhome proffers by 35 percent and multi-family units by approximately 37 percent. After July, single-family proffers will amount to $44,930; townhouse proffers will be $39,837; and multi-family proffers will be $26,778. This number puts Prince William on par with western Loudoun County and Stafford County as their proffers range from $27 to 45.5K.

“According to Prince William Education Association President Jim Livingston, who spoke during Citizens’ Time, low proffers have inhibited the school district from directing more money towards the education of students, since so much of it has needed to be funneled into the construction of new schools.

” ‘There is a reason Prince William County Schools pay less per student than any other school division in Northern Virginia and that reason is we receive less per student than other school division in Northern Virginia,’ Livingston said.

“Specifically, Livingston said Prince William ‘would get an additional $125 million dollars if we charged what Loudoun County charged (in proffers). That money could be put to very good use.’

“However, Coles District Supervisor Marty Nohe (R) explained that while some media outlets are reporting what the schools have received in proffers, those numbers overlook the land, roads and parks that have been proffers to the county directly though not accounted for monetarily. He told Price that perhaps they should figure out a method for incorporating those costs in their records.

ProfferNumbers

New PWCounty proffers; Provided by PWCounty

“Price said they could, but they would have to figure when to assign the monetary value to the land. He added that sometimes land is worth more than its market value, because its location is so useful to the county in the building of a school or fire station.

“While supervisors were willing to vote on the motion without much prior discussion, there were varying opinions raised about the proffer increases during Citizens’ Time.

“One resident questioned Planning Director Chris Price’s formula for deriving the new proffers. Rather than estimated costs for new schools, he suggested the county look at most recent costs and then average for market inflation. By this method, he calculated, proffers would decrease by $3,000, which he believes is a more accurate representation of the service needs required by proffers.

” ‘The projects should not exceed actual capital costs,’ the speaker argued.

“However, Price said his method is more prudent. Relying on past year’s costs could prove unreliable for schools, because it does not take into consideration additions and renovations. Likewise, for construction projects, such as libraries, looking at the last year in which one was build would be not accurately help to predict future costs, since they are built so infrequently, Price explained.

“The current proffers that were voted on include funds for schools, transportation, fire and rescue, parks and libraries. It did not include funds for police and safety or the adult detention center.

“Price said his staff would be willing to looking into that, but it would not be included in the current changes.

“Prince William County supervisors did receive information provided by the Northern Virginia Home Builders Association prior to their vote.
“Details of the proffer changes can be found on the Prince William County government website or by clicking here.
“Read a previous Bristow Beat article about Chris Price’s proffer proposal to the BOCS here.”

Speech delivered to Prince William Committee of 100 Forum

by PWCBG’s Ralph Stephenson

17 April 2014 in Montclair, VA

Note: Financial documentation used in speech doclinked below, including PWCBG 2012 residential development breakeven analysis prepared by Bob Pugh, PWCBG 2010 residential breakeven analysis and “Fiscal Impact Analysis [of the] Proposed Avendale Development” prepared by Bob Pugh, 2010 “Comparison of Fauquier, Prince William, and Stafford County Proffer Guidance” by Citizens for Fauquier County (CFFC), and 2012-13 PW County School Board “Comparison of Local Monetary Proffer Contribution Guidelines” (for school proffers only).


1.  Greetings, fellow citizens. My name is Ralph Stephenson, I represent Prince William Citizens for Balanced Growth (PWCBG), which is an alliance of like-minded PW citizens. Our alliance works to ensure that Prince William’s county government balances residential growth with traffic, school, tax, economic, and quality-of-life issues. See http://pwcbg.org for more information.

I love the Biblical and Socratic learning method of asking questions. I’ve learned more from that teaching method both as a teacher and student than perhaps any other. So let me focus today on some very important questions that I think this county needs to ask itself, and then answer, in order to progress in an economically and socially healthy way.

2.   First, should ordinary Prince William County citizens and taxpayers care about proffers from residential developers, the purpose of which is to offset the public costs to taxpayers of residential development? You bet they should. Because if taxpayers don’t know or don’t care, their taxpayer $ will continue to end up indirectly subsidizing residential development. Even worse, they’ll be subsidizing the authorization and building of unnecessary residential development. (Note that the county already has 10s of thousands of legally approved but not yet built homes, so it has no immediate need to approve more homes.)

Some more fundamental questions: Should taxpayers subsidize unnecessary production by private businesses in one industry simply because those businesses and that industry are politically well-connected and finance many local political campaigns? Has anyone asked county taxpayers if they want to heavily subsidize the residential development industry, even when it overproduces? Specifically, do the citizens of Prince William County want their taxpayer dollars to be used to support and subsidize unneeded residential development that overcrowds their schools, congests their roads, increases their taxes, and ensures that the county continues to slide deeper into a low-wage service economy and tax-negative land development hole? Should the county continue its trend in recent years of rezoning increasingly scarce undeveloped land away from tax-positive commercial land development to tax-negative residential development?

3. The county’s current proffer system, by keeping Prince William’s proffers apparently the lowest among northern Virginia’s urban and suburban counties, has its own political logic, based on residential developers’ political activism and their unsurpassed campaign funding to Board of Supervisor and other local political campaigns. But this political logic is not to be confused with real fairness and real logic, the logic of market economics, fiscal conservatism, and government of, by, and for all the people. That logic, real logic, demands that local governments prohibit corporate welfare for certain privileged industries and private businesses – and not that they aid and abet corporate welfare at the expense of everyone else.

Let’s compare No VA proffers (using 2012 as our base year):

a. PW requires: $37,719 per single family home. In 2007, Chmn Stewart and Planning Staff advocated raising to $51K.
b. Loudoun requires: $51,709 per single family home (35% more than PW)
c. Stafford requires: $40,427 per single family home
d. While it’s difficult to find comparable rates per single family home for DC’s near suburbs in VA, nevertheless, using Fairfax Co as representative, proffer requirements and rates for developers appear to be significantly more stringent – and thus more expensive to developers — requiring, for example, major set-asides for affordable housing and other proffers and impact fees.

So Prince William’s proffers are apparently the lowest among northern Virginia’s urban and suburban counties.

Again I ask: Should county taxpayers subsidize residential developers and politically, not economically-driven residential development that overcrowds their schools, congests their roads, increases their taxes, and ensures a low-wage service, long-distance commuter economy?

Are county politicians, particularly the Board of Supervisors, willing to let the free market decide housing prices and supply, or do they consider that to be their prerogative, as in a centrally planned economy, using taxpayer subsidies that distort the market and promote waste, including waste of taxpayer funds and unnecessary building, unnecessary production that is politically-, not market-driven?

4. Now let me address the fiction often heard from developers that all residential development produces taxes and thus is tax-positive, meaning that it adds more to county coffers in revenues than it takes away in costs for county services.

PWCBG calculated back in 2012 that after accounting for all county government costs resulting from residential development (not just land and building expenses, but operational expenses as well, such as teachers, policemen, firemen, books, supplies, furniture, etc.) a house had to be assessed at $448,174 to generate as much in real estate tax revenue as it cost the county in services (for each house, on average.) So $448,174 was the tax breakeven value in 2012. Note that 2008-12, the county’s median home value was $331,700. Similar calculations in previous years have yielded similar results. In 2009-10, the tax breakeven value was $466,468. Of the 2012 tax gap of $116,474 for a home of median value, proffers even when uncustomarily paid in full, would make up less than a third of the tax gap.

But residential developers usually don’t even pay the required proffer amounts noted above. Monetary proffers are usually waived, or the developer gets phony, inflated credits to offset the monetary proffers it should be paying. An analysis PWCBG did of the 2010 Avendale development shows that, including land proffers, this development at its initial size of 295 units will produce in perpetuity a $463K annual tax shortfall (before adjusting for inflation.) The shortfall would increase if more units were added.

In other words, residential development does not pay for itself. Taxpayers have to make up the difference and thus subsidize residential developers’ housing projects and their profit margins – i.e., county taxpayers are forced to pay corporate welfare to residential developers.

5. I know someone, an aging youth in his 30s, who wanted to live rent-free in his grandparents’ basement while he continued his long career of working part-time and working on his bachelor’s degree. His grandparents agreed for him to live there but on the condition that he pay a minimal rent. He initially refused, but they insisted. When he finally agreed to pay the minimal rent, he acted as if he were doing his grandparents a favor and as if they should be thanking him.

Residential developer proffers in this county are a lot like that.

So in sum, here are the questions regarding proffers that this county needs to answer. Why should county taxpayers continue to subsidize residential development and developers’ profit margins because proffers are too low to offset costs to taxpayers? Why should county taxpayers continue to subsidize politically, not economically-driven residential development that overcrowds their schools, congests their roads, and increases their taxes? Why should county citizens allow the county to continue to support a low-wage service, long-distance commuter economy by allowing the BOCS to continue to rezone increasingly scarce undeveloped land away from tax-positive commercial to tax-negative residential development?

The answer to the above questions? They shouldn’t. They shouldn’t. And they shouldn’t. Instead, residential developer proffers should be increased to at least $51K per single family home and by similar ratios for townhouses and multi-family units. As Chairman Stewart said in an interview published 7 Sep 2007 in the Bull Run Observer: “Why should taxpayers pay the cost of new development? If development doesn’t pay, then the taxpayers subsidize.”


Note: Financial documentation used in speech doclinked here, including:

Also see this link for info on 2014 Stone Haven update of residential development breakeven analysis and cost of tax-negative residential development.

Q:   How was “residential development breakeven analysis” above calculated?

A:   Add up county general fund budget costs.  Subtract non-real estate revenue from new units so as not to overestimate cost.  Divide by county population.  This gives you the unadjusted per capita cost required from real estate taxes.  Now, multiply residential proportion of tax base (82%) — again, in order not to overestimate cost — then multiply by average household size (3.05).  Now take cost per household required from real estate taxes to pay for county services, divide by the tax rate of 1.215 for $100 of assessed value and then multiply by 100 to get the $448,174 breakeven house value.

Prince William School Board says ‘no’ to new housing development

by Jill Palermo

InsideNova, 13 April 2014

“Faced with overcrowding and large class sizes, the Prince William County School Board is doing what it can to discourage new housing developments where classroom space is tight.

“For the second time in recent months, the school board voted earlier this month to register its disapproval of pending rezoning application that would add more new homes in an area where schools are overcapacity.

“This time, the rezoning request involves a development called ‘Cayden Ridge’ that would add as many as 191 homes to a 58-acre area near Signal Hill Road and Liberia Avenue. The area is zoned for Signal Hill Elementary, Parkside Middle and Osbourn Park High schools.

“Two of those schools – Parkside and Osbourn – are already overcrowded. According to school records, Parkside is at 108 percent capacity, while OPHS is at 113 percent.

“School board members also noted that the amount of ‘proffer’ money the county requests from developers remains far below what developers pay in surrounding counties – despite their repeated requests that supervisors reconsider the proffer policy.

“In Loudoun County, for example, developers are asked to pay more than $34,000 to schools for each house they sell. In Prince William County, the amount is $14,462.

“As a result, the school board members said, they simply cannot give their blessing to a development that would put more children in already crowded classrooms.

“School Board member Lillian Jessie (Occoquan) said she hoped the move would bring attention to the fact that new housing developments are at least partly to blame for school overcrowding and large class sizes.

” ‘The school class-size issue is a major issue,’ Jessie said. ‘We need to add additional schools and we need to stop building homes when we don’t have the school space to [accommodate] them.’

“Board Chairman Milt Johns (At-Large) noted that supervisors have pledged to study the proffer issue, something the school board asked of them a year ago, but have yet to make any changes. Prince William County’s proffers were last updated in 2006.

” ‘When you add continuous year over year growth and lagging proffers there are consequences in school overcrowding and classroom size,’ Johns said.

“Although the school board cannot block the rezoning – only the Prince William County Board of Supervisors can – the school division is consulted about the impact a rezoning would have on public schools.

“The rezoning application for Cayden Ridge seeks to reclassify about 58 acres from agricultural to ‘planned mixed residential.’ The application has yet to receive a hearing date before the Prince William County Planning Commission.

“As is the case with all rezoning applications, the final decision on Cayden Ridge rests with the board of supervisors.”


20 May 2013 PW School Board resolution urges PW Board of County Supervisors “to re-evaluate monetary proffer guidelines” and raise them to Loudoun County levels.   Click here for School Board Resolution.

“Supervisors to study proffer amounts from developers”

by Jill Palermo, InsideNova

27 September 2013

“For months, the Prince William County School Board has urged county officials to re-examine the amount of money they ask housing developers to pay to local schools. Now it appears that the county Board of Supervisors is willing to at least consider the idea.

“During the board’s meeting Tuesday, Supervisor Pete Candland, R-Gainesville, asked county staff to develop a report on the how ‘proffers’ – money developers pay to offset new residents’ demands for county services such as schools, transportation, law-enforcement, parks and libraries – compare to those requested by officials in surrounding communities.

“Candland, a fiscal conservative who is nonetheless a vocal supporter of more money for local schools, represents a portion of Prince William County where rapid growth has led to overcrowding in many existing school buildings.

“In a press release issued after Tuesday’s meeting, Candland said the county not only needs to re-examine its proffer amounts but also whether new housing developments produce the tax revenue to support the new developments.

” ‘We have a crisis in education in Prince William County with the highest class sizes in the Commonwealth and underpaid classroom teachers,’ Candland said in the press release.

” ‘Prince William County’s proffer policy has not been updated in several years, and that has the effect of underfunding our schools, and the unintended consequence is that we impose an unfair burden on existing homeowners who are forced to subsidize new housing developments that do not adequately pay for the schools and county services required for new families who buy homes in those subdivisions,’ Candland added.

“Back in May, the Prince William County School Board passed a resolution asking county supervisors to reexamine proffer levels, which were last revised in 2006 and are lower than what developers are asked to pay even in lower-cost areas such as Fauquier and Stafford counties.

“School Board Member Gil Trenum, Brentsville, reiterated that request earlier this month.

“Prince William’s ‘Policy Guide for Monetary Contributions’ sets the proffer amount for single-family homes at $37,719.  Of that amount, county schools are slated to receive $14,462 every time a building permit is pulled on a new home.

“In Loudoun County, however, developers are asked to pay more than $51,000 for every home built – more than $34,000 of which is slated just for schools, according to figures provided by Prince William County Schools staff.”

“Stonehaven Development and ‘Getting’ a High School”

by Kim Simons, in “PWC Education Reform Blog”

29 November 2012

Stonehaven Development and “Getting” a High School


Compare low Prince William Proffers to much higher Proffers in Stafford, Loudoun and Fauquier:

Proffers Comparison

Note:  Northern Virginia’s Fairfax and Arlington counties, Alexandria, and Falls Church require higher proffers overall from developers than the four counties noted above.  Also, note that Fauquier is a slow-growth, rural county and thus proffers are not as relevant to its growth management policies as they would be in high-growth counties like Loudoun and Prince William.

 

Letter to the Editor in “Your View” section: “Taxes low as long as priorities kept”

by Ralph & Kathy Stephenson, Inside NOVA.Com

17 March 2009

“We understand that the Prince William Board of County Supervisors is debating and will soon decide fiscal year 2010 property tax rates. We support efforts to keep taxes low, or even reduce them, particularly in the kind of severe recession the country is now experiencing. We understand full well that it takes political courage to keep the size of government and taxes under control, and none whatsoever to constantly expand government, heedless of the interests of those footing most of the bill — middle-class taxpayers.

“We will continue to support efforts to keep taxes low as long as the county’s highest priorities are police and fire protection, schools/libraries, and roads/transportation. And we will support reasonable efforts to attract more business and commercial development to the county.

“We also think it is important to be mindful of what got us into the current mess in the first place and to ensure that it never happens again.  As Vice Chairman Covington has noted, the plight of ‘the family who has one wage earner unemployed, the homeowner who has seen the value of his house plummet, the small business owner who tries to hold on to valued employees, the corporation that planned to expand, and the senior citizen who has witnessed his pension fund decline in value by 50%,’ and others even worse off is heartbreaking and erodes the well-being of all. These human tragedies all around us are reminders of the ultimate, root cause of the current severe recession:  a housing industry with massive overcapacity, consequent massive housing oversupply, and years of concurrent political mischief and corruption by both major political parties [at the federal, state, and local levels] (with apparently only a few Republicans dissenting) to distort healthy market forces and overturn normal, honest financial practices in order to artificially force housing demand to fit oversupply.”

Ralph and Kathy Stephenson
Bristow

“Proposed Increase in County Proffer Fees Is Defeated 5-3”

by Rose Murphy, Bull Run Observer

19 October 2007, p. 16

“The planned hike in building proffers on residential developments in the county was voted down October 16 by Prince William Board of County Supervisors [BOCS] meeting in McCoart Government Center off Prince William Parkway.  Proffers are monies or other items volunteered by developers to mitifate the impact of their projects on county roads, schools, libraries, parks and police and fire and rescue services.  [PWCBG note:  Although the BOCS meeting began at 2 pm on 16 October, it did not end until early the next morning, 17 October, shortly after the proffer vote.]

“The proposed proffer on single-family homes would have risen from $37,719 to $51,113.  Townhouse proffers would have been $43,262, up from $31,927, and multi-family construction would have been upped to $26,545 from $19,526.

“Voting to go ahead with the increases were Corey Stewart (R-at-large and board chairman); John Stirrup, (R-Gainesville); and Mike May, (R-Occoquan).  Against were Marty Nohe (R-Coles); Hilda Barg, (D-Woodbridge); John Jenkins, (D-Neabsco); Wally Covington, (R-Brentsville); and Maureen Caddigan, (R-Dumfries).

“Nohe said before the vote he wanted ‘to see what impact fees would look like’ before approving increased proffers.

“Impact fees let counties charge developers for roads.  The fees were approved by the General Assembly this year, and could be assessed on all residential developments after August 2008.

“Nohe explained that ‘some members of the General Assembly want to turn back impact fees.  They might go after the proffer authority instead.’  He added passing the proffer change ‘may send the message we’re not doing the right thing.’  He said he wants the impact fees, but does not want to lose proffers.

“Jenkins contended the proffer fees are really ‘hidden taxes.’  He said the higher fee on single-family homes would be pased on to homebuyers.

” ‘The $51,000 would come to $305 more per month on a mortgage.  In Stafford, the proffer for single-family is $38,151,’ Jenkins added.

“Caddigan said she was in favor of proffer increases, but that the timing was wrong.

“Stewart asserted that the proposed increases represent ‘the true costs to the county to support residential development.  If the developer doesn’t pay, the taxpayer and the county pay.’ ”


PW Pulse in a 25 October 2007 article by Keith Walker on p. A5 adds the following:

“County staff recommended that the proffers be increased.

“Planning director Steve Griffin said each year the county analyzes the impact that building will have on the cost of fire and rescue, police, roads and schools.

“He said he thought the increase was justified.

” ‘Based on the expensive buildings and land purchases, they needed to be adjusted to this amount,’ Griffin said.  ‘It was all about construction and the price of land that justified the higher amount.’ ”

 

“New Group Pushes Proffer Hikes”

 by Tara Slate Donaldson, The Gainesville Times

10 October 2007

“A new group has formed in Prince William to encourage proffer hikes and a slowdown of residential development. But though Prince William Citizens for Balanced Growth [PWCBG] claims to be a bipartisan organization, the founders spent much of their first press conference Tuesday refuting claims that it is just another front for Republican candidates.

“It may be too early to tell which is true. It is also too early to tell whether the group will have any appreciable impact on the proffer debate.

“On Tuesday, group founders Bob Pugh and Ralph Stephenson hosted a press conference at the McCoart Building. They were joined by Prince William Republican Committee member Denny Daugherty, Board of County Supervisors Chairman Corey Stewart, Gainesville Supervisor John Stirrup and candidates Faisal Gill and Chris Royse, all Republicans.

“Planning Commissioner Gary Friedman was also present and though he has run for public office as a Democrat, several Democratic Committee members who watched the press conference pointed out that the Democrats are no longer claiming Friedman after his break with the party to align with Republicans.

“The stated purpose of the group is to encourage the Board of County Supervisors to increase proffers on residential development — something they are expected to do anyway next Tuesday.

” ‘For an industry or company to try to force taxpayers to subsidize a product that is already in oversupply or glut may be good politics for some, but it is not good economic policy,’ said Stephenson. ‘Nor does it represent good government or the best interests of taxpayers.’

Stephenson and Pugh said they had invited all of the supervisors and Democratic candidate for chairman Sharon Pandak to attend their press conference.

“The absence of any Democrats was notable, although Pandak sent an e-mail to the group and the press beforehand saying she isn’t opposed to proffer hikes.

” ‘The proffer guidelines have been updated over the years and they need to be updated again, as recommended by county staff,’ she wrote. ‘They must better reflect current costs and impacts.’

“Next week, the board is set 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.

” ‘We’ve been getting overwhelmed by residential development,’ Stewart said. ‘The commercial tax base has slipped.’

“The proffer hikes would only affect residential development, not businesses or nonprofits.” …


“Pending Supervisors’ Votes Rile Public:  Protest, News Conference Address Proposals on Illegal Immigration, Proffers”

by Christy Goodman, The Washington Post

11 October 2007, p. PW01

“For a change, most of the action Tuesday was outside the Prince William County Government Center instead of inside at a meeting of the Board of County Supervisors. In the back parking lot, a protest formed. Out front, a news conference took place. And later, people gathered for a community rally.

“The protest: the board’s pending vote on restricting services to illegal immigrants.

“The news conference: the board’s pending vote on raising residential proffers by 36 percent.

“The meeting: See the protest.

“People were riled up… [passage omitted on illegal immigration issue]

“At a news conference before the meeting, several Republican candidates, two Republican board members and a few residents announced that they would be watching the supervisors’ vote Tuesday on raising the fees developers pay to build residential properties, making them the highest in the state. The group, dubbed the Prince William Citizens for Balanced Growth, vowed to post a report card of the supervisors’ actions, including board Chairman Corey A. Stewart and Supervisor John T. Stirrup Jr. (Gainesville).

“Enter the opposition.

” ‘I see the leadership of this organization as all Republicans,’ said Harry Wiggins, the finance chairman of the Prince William Democratic Committee, who repeatedly interrupted speakers to call the group ‘a Republican front.’  ‘This has nothing to do with proffers or growth or anything. It is all about Corey Stewart,’ Wiggins said.

“Stewart had just finished explaining that $51,113 per house in fees to pay for schools, parks and transportation, called proffers, was ‘the true cost of residential development in the county.’

“Stewart and the Citizens for Balanced Growth said the 36 percent increase in proffers was needed to help slow residential growth while boosting commercial development.

“Another resident, Claire Rollins, told the board, ‘As far as proffers are concerned, you know that is extortion. . . . It is going to be passed on to the buyer.’

“Chris A. Royse, a Republican candidate for Woodbridge supervisor, tied the day’s issues together, saying his district has been consumed with unruly development and the ‘lawlessness’ of illegal immigrants for too long, which he said was one of the reasons he supports the efforts of the group” …  [passage omitted on illegal immigration issue]

Speech at 9 Oct PWCBG news conference supporting increased proffers

by PWCBG’s Ralph Stephenson

For an industry or company to try to force taxpayers to subsidize a product that is already in oversupply or glut may be good politics for some, but it is not good economic policy.  Nor does it represent good government or the best interests of taxpayers.

As noted repeatedly in recent articles in the WSJ, including a page one article on Sep 26, the housing market is experiencing a serious downturn largely due to overproduction and oversupply.  Quote:  “[Lennar Homes] Chief Executive Stuart Miller said the problems are broad-based and stem from an oversupply of homes, turmoil in the mortgage market, and weak consumer confidence…

“…Sales of existing homes tumbled…in August to…the slowest [pace] in five years, the National Assoc. of Realtors said [Sep 25th]…Analysts cite excess supply in forecasting that an upturn in [housing] sales and prices may not come until 2009.”  End quote.

In Prince William County, there is already an oversupply of housing, houses are selling more slowly and prices have fallen considerably, and reportedly an additional 40-50,000 homes have been approved but not yet built.

So why would the Board of County Supervisors want to increase the glut of residential housing in Prince William County by subsidizing residential development at taxpayers’ expense?  This is in effect what the Board is doing when it keeps impact fees and proffers required of residential developers at levels well below the true infrastructure burdens created by residential development.  When you think of the infrastructure burdens created by residential development, think of heavily congested roads, overcrowded schools, rising property taxes, damage to the environment, falling property values and rapid deterioration of older neighborhoods when there is an oversupply of housing, etc.

Subsidies to business by government sometimes make sense when vital goods or services are in short supply.  But none of those conditions apply or will apply to our county’s housing market anytime in the foreseeable future.  Indirect taxpayer-funded subsidies to the housing industry make no economic sense, are not good government, and are certainly not in the interests of taxpayers.  They are, in essence, corporate welfare that benefits only the housing industry and its political clients.

Prince William Citizens for Balanced Growth, a citizens’ coalition that grew out of the successful fight to stop the 2006 Brentswood rezoning proposal, went live today with a website [pwcbg.org] that tracks supervisor and chairman candidates’ voting records and/or statements on major balanced growth issues.  We strongly support increasing residential developer proffers, and after the 16 October Board of County Supervisors vote on proffer reform will finalize, publicize, and post on our website Balanced Growth Report Cards for all seven of the current supervisors, Chairman Stewart, and Chairman-Candidate Pandak.

My name is Ralph Stephenson.  I’m the content manager for the PWCBG website.   I’m now passing out information from PWCBG explaining its goals and why it’s important to encourage commercial development and balance residential growth with traffic, tax, job-growth, public school, and quality-of-life concerns.   Thank you.

“No New Housing in County Without Payment of Impact Fees, Says Stewart”

by Rose Murphy, Bull Run Observer

7 September 2007, pp. 7, 10

” ‘What dollars do we need for development to pay for itself?’

“This is the question Corey Stewart says he asked Prince William County planning staff before proposing that $51,113 would be the necessary proffer for each single-family home built. Stewart is chairman and at-large member of Prince William Board of County Supervisors.

“Proffers are monies or other items ‘volunteered’ by developers to mitigate the impact of their projects on county roads, schools, libraries, parks, and police and fire and rescue services.

“In an interview Aug. 30, Stewart explained the higher proffer figures for residential construction would come to a vote before supervisors ‘in the fall.’  Also taking part in the interview was Gary Friedman, Stewart’s representative on the county’s planning commission.

“At a June 5 supervisors’ meeting, the board decided unanimously that higher proffers would not be required for commercial and church projects for this review. The panel also voted unanimously to defer action on residential proffers.

“Friedman said supervisors decided not to hike proffers on church and commercial construction ‘because the county and Corey want to do all they can to encourage business and commercial development and to expand the commercial base.’

“The planner contended that non-residential revenues have been going down as a percentage of the total county revenue.

” ‘And they should be going up,’ Friedman added.

“Stewart remarked, ‘We want more office and commercial uses and more high-end retail. We want to discourage more homes. We want to ensure that homes to be built pay for themselves.’

“The proposed proffer on single-family homes would rise from $37,719. Townhouse proffers would go to $43,262 from $31,927, and multi-family construction proffers [would] be upped to $26,545, up from $19,526. All figures represent a 36 percent increase.

” ‘The county has an on-going policy that each year staff updates the numbers to identify what contribution is needed from developers for parks, schools, transportation, the environment, police, fire and rescue and libraries. These numbers tell us what’s needed from developers so the development pays for itself,’ Stewart explained.

“We told the staff we wanted honest numbers, and the staff came back with the figures we’re proposing. We’re satisfied they’re objective numbers and we want to see them adopted. This is the first time development will pay the true costs for new roads, fire and rescue, libraries, parks, transportation and schools, the chairman asserted.

“Friedman observed that ‘this is probably the first time these numbers are reality based.’

“The chairman noted that, when the proffer system began in the 1980s, ‘we were getting about ten percent of the costs of public infrastructure.  The taxpayers were paying the balance. We’ve been getting closer and closer to development’s paying its own way.’

“Friedman explained Craig Gerhart, county executive, ‘has told the board that if proffers don’t keep pace with development, we’ll fall farther and farther behind.  The gap will grow wider, and then it will be even harder for future boards to address.’

“Stewart pointed out that the transportation package passed this session by the state included impact fees. He said he and Scott York, chairman of Loudoun Board of County Supervisors, lobbied in favor of the fees.

” ‘Impact fees are something this county wanted for decades,’ Stewart said. ‘These fees let us charge developers for roads on the 50,000 approved, but yet not built, units in Prince William County.’

“The chairman noted impact fees are separate from proffers, and that proffers only are part of a new rezoning process.  A consultant has been hired to analyze impact fees and how to assess them. The analysis should be finished by August, 2008.

” ‘Impact fees are enabled by the state, but the county decides how to implement them,’ Friedman said.

“Stewart added impact fees would be assessed on all residential development, ‘no matter when it was approved.’

” ‘Prince William County will probably be the first county in the state to impose impact fees,’ the chairman. said.

“By law, impact fees cannot be assessed before August 2008, so Stewart wants the new proffers ‘in place before the impact fees.’

“Both officials said they would I like to see impact fees expanded to include schools.

” ‘Why should taxpayers pay the costs of new development?  If development doesn’t pay, then the taxpayers subsidize,’ Stewart remarked.

“Mark Granville-Smith, head of Prince William Chapter of Northern Virginia Building Industry (NVBIA), told the September 4 supervisors’ meeting he and his group object to the proposed proffer increases.  He cited a ‘record downturn in the industry’ as a reason for his objections.  He said there were 31 property foreclosures advertised in an area newspaper that day.

” ‘The same day chairman Stewart was holding his press conference to bring up raising proffers again up to $51,000, President Bush was proposing legislation and relaxation of credit qualifications to FHA homebuyers having trouble making their mortgage payments in an attempt to help a struggling industry with record foreclosure rates,’ Granville-Smith told supervisors.

“The builder noted that earlier this year he had cautioned the board that the ‘finance projections of 3200 new residential units being built this year could be grossly over-estimated by 1000 units or more.  In addition, the two-percent projection in home value devaluation was already in the eight to 12 percent range. A recent newspaper article revealed that the finance director of the county, Mr. (Chris) Martino, has now realized property value depreciation of at least four times what the county expected.’

“Granville-Smith added that it ‘has become politically corrrect to bash the building and development industry. However, it is simply wrong for chairman Stewart to say that new homebuyers do not have the cost of proffers passed on to them.  Proffers, or what really is a new home sales tax paid by the purchaser, is a cost of a new home just like sticks and bricks.’

“The NVBIA head contended that the board recently voted to defer a vote on proffers until ‘additional second and third quarter occupancy permits, building permits and assessment date could be reviewed. This would give a better picture of the market conditions than what was available to the board earlier this year.’

“Granville-Smith added his industry ‘strongly supported the Transportation Funding Bill passed recently by the state legislature.’

” ‘We proposed and supported the grantors’ tax which result in over half the transportation authority funding sources, from the real estate industry. We just supported a 12 to 40-percent fee increase for permitting and plan review for the county’s development services division to survive the downturn,’ he explained.

“Granville-Smith said, ‘increasing the proffers now will further tell all industries — commercial, retail and residential — that Prince William County is not really open for business, and you can’t live here.’ “

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