Town Reaps Hard Cash for New Houses

In the frenzy to build subdivisions in Northern Virginia's exurbs, one of the nation's largest housing developers has offered to write the small Fauquier County town of Warrenton a $22 million check, an unprecedented cash donation, according to Virginia real estate specialists.

In exchange, Centex Homes of Dallas would get permission from county and town leaders to build a subdivision just outside Warrenton with nearly 300 luxury homes for seniors, starting at $850,000.

The $22 million -- almost half of Warrenton's annual budget -- would pay off the debt on a new swimming pool complex in the town of 8,000 people. Town and county leaders gave their initial approval last week to Centex's proposal, which involves asking Warrenton to annex property so the builder can connect to the town's sewer system.

George B. Fitch, the mayor of Warrenton, which sits about 40 miles west of the District, hailed the tentative agreement as a major victory for the town and for other communities seeking to have some control over the rapid pace of development.

"I think we're finally coming to a place where growth is sustaining growth," Fitch said, explaining that housing developers seem increasingly willing to pitch in to compensate for the stress on infrastructure caused by new residents. Centex's contribution would amount to nearly $74,000 per unit, more than double what Fauquier County usually receives from a developer.

But development specialists say the unusually large promise of cash highlights a disturbing trend in Virginia's booming housing market. Developers eager to plant new homes in exurban locales are building roads, establishing parks and offering money -- all in an effort to appease increasingly resistant communities. The result, the specialists say, is more expensive homes.

In Loudoun County, the developer Greenvest has offered to spend $192 million on road improvements in exchange for permission to build 15,000 homes near Dulles International Airport. Toll Brothers, another developer, plans to contribute 233 acres of parkland to Prince William County so it will rezone rural land to build 420 houses near Silver Lake.

The Warrenton deal and agreements like it amount to bribes, said John McIlwain, senior resident fellow for housing at the Urban Land Institute, a Washington-based nonprofit research and education organization for the development industry.

"Facilitating the process is a nice way of saying it," McIlwain said. "Centex saved themselves two or three years of controversial negotiations trying to get approval, and that's worth a lot of money in itself."

In Fairfax County and other jurisdictions, developers traditionally have offered land or money to offset the cost of building schools, roads or libraries to accommodate the additional residents that new homes bring. In Maryland, those impact fees are required by state law, but in Virginia, local governments negotiate what are known as "proffers" to cover that cost.

The proffer by Centex is unusual in that the vast majority of the money isn't needed to support roads or schools for the development. Because the new residents will primarily be senior citizens, officials say that the impact on schools will be minimal and that they won't have to increase school capacity.

The subdivision would be built off main thoroughfares, which they say will require few road improvements. Additionally, Centex has agreed to pay for sewer improvements, though the company is still studying what improvements might be necessary.