Higher Builder Fee Sought; Home Price Increase Feared

Prince William County officials yesterday proposed a 36 percent increase in the amount that developers pay the county for permission to build houses, which industry officials warned would probably drive up home prices.

County officials said they need the additional money -- $51,113 for each house, up from $37,719 now -- to build the roads, schools, parks, libraries and police and fire stations that are needed because of growth.

Representatives of the building industry said the proposed increase in so-called developer proffers would come at a bad time because of the slowdown in the housing market. If the higher proffer rate is approved, industry officials said, the costs would be passed along to buyers of new homes.

The Prince William Board of County Supervisors is scheduled to consider the increase at its meeting Tuesday but probably will not act on it until at least next month.

Chairman Corey A. Stewart (R), who has advocated a higher rate, said the increase is "an honest number" on the cost of developing roads and public facilities to keep up with residential growth.

"We asked the county staff to give us the best number they could, the actual cost to the county for capital improvements. And they spent a lot of time, hundreds of hours, trying to come up with that number, and that is why I am convinced that it is the correct number," he said.

Jim Williams, executive vice president of the Northern Virginia Building Industry Association, disagreed.

"The industry thinks it is totally outrageous," he said. "Now the tax on new homes that the county is imposing exceeds 10 percent of the average sales price. Corey Stewart has basically gotten the county into a position of defeating growth by making it so expensive."

Mark Granville-Smith, president of the Prince William chapter of the Building Industry Association, said he hopes that the county will not raise the proffer fees in the near future.

"Now is not the time to raise our proffers," he said. "We just raised them from $23,000 to $37,000 last July. There are only six zoning cases before the board that are active. We've had a rezoning moratorium in place since the first of the year. Our building industry worked with the county and agreed to a 60 percent increase in building development fees to make up for the revenue shortfall in the county, so that they didn't have to lay off any county employees in building services, so we can still get our permits processed."

Michael Minnery, president of the Prince William Association of Realtors, said he has mixed feelings about the proposal.

"You know, something like this will greatly affect the affordability of homes; however, it would greatly enhance the ability of the county to improve the infrastructure," he said. "I am sure that it is a significant amount of money and, if it wasn't needed, it wouldn't be proposed."

The proposed increase would raise the rate on new townhouses from $31,927 to $43,262 per house, a 35.5 percent boost. On apartments, the amount would increase from $19,526 to $26,545 a unit, or 35.9 percent. County staff prepared the proposal with comparisons to proffer rates in Loudoun ($47,000), Stafford ($38,151) and Spotsylvania ($35,295) counties. The comparison did not include Fairfax County.

Stewart, who is running for re-election in the fall, said the board might consider implementing the proffer increases in phases. "I want to hear both sides on this," he said. "I think our economy is very sensitive right now, and we are going to hear both sides. We are going to be very careful in what we do. I think the question is the timing or whether we can phase it in."

He said he is sensitive about the impact raising proffers could have on the housing market. "We don't want to do anything that will further shock or further damage our economic development efforts," he said.

"On the other hand, I am very pleased that one effect of the turndown has been positive. It has really slowed down the rate of development in Prince William County, and that is going to give us time to catch up with building roads and schools and infrastructure."