Declining Home Values, Looming Recession Cited
By Christy Goodman
Washington Post Staff Writer
Sunday, October 21, 2007
The cost to build a house in Prince William County isn't rising anytime soon.
The Board of County Supervisors ended its meeting Tuesday by rejecting a resolution to raise proffers, fees paid by builders to mitigate the impact of new development on roads, schools and public safety. The resolution called for raising proffers 36 percent, from $37,719 to $51,113 for a single-family house. Had it succeeded, Prince William would have had the highest proffer payments in Virginia.
John D. Jenkins (D-Neabsco), one of five supervisors to vote against the resolution, said no one is building houses in the county as residential home values continue to fall. The supervisors recently learned that the county is estimating a 14 percent decline in values and is facing a $10 million shortfall this year.
"Zero times 51,000 equals zero," he said. "We are very much heading into a recession, and we need to make sure everything we do as the board of supervisors helps the local economy, helps the community and keeps our tax base stable. This increase in proffers is nothing but a tax anyway. The builders will pass that cost on to the consumers," said Jenkins, who estimated the $51,000 would have added $350 a month to a new house's mortgage.
Several supervisors said they wanted to wait until after the Virginia General Assembly gave them more information about impact fees, which could be placed on developments that were approved years ago without proffers.
Supervisor W. S. Covington III (R-Brentsville), who voted against the resolution, said there needs to be more discussion on proffers and where they are used. Covington said the current system allows proffer funding that came from one development to be used in another area of the county.
"People can see that . . . money moving all around the county to fix problems of yesterday, and there is not enough consistency and accountability so that the people paying the tax should get at least some benefit out of it," Covington said.
Supervisors said the issue will return after further review and more updates have been made to the county's Comprehensive Plan. Jenkins speculated that the supervisors would have the opportunity to vote on the proffers again in the summer.
"The proffer at $51,000 exceeds 10 percent of the average house sales price in Prince William County, and that is too high," said Mark Granville-Smith, president of the Prince William chapter of the Northern Virginia Building Industry Association, which lobbied against the increase. He said the association appreciates the board "trying to keep from hurting the building industry any more than it is already suffering."
Builders obtained approximately 350 new building permits between July and September, which would translate to 1,400 new units this year, Granville-Smith said. The county projected 3,200 new units for its tax rolls, he said.
"These are significant downturns from the county's projected rates," he said.
Board Chairman Corey A. Stewart (R) said he was disappointed that only Supervisors John T. Stirrup Jr. (R-Gainesville) and Michael C. May (R-Occoquan) joined him to vote for the increase.
"The reality is the longer we delay the increase in proffers, the longer the citizens must pay to subsidize development," Stewart said. "Fifty-one thousand dollars, that is the actual cost to the county to build the schools and the roads necessary to support that new home. And if a developer doesn't pick up that cost, then the taxpayer does."
The board also voted to defer Comprehensive Plan changes to parks and open space. The proposal, approved by the Planning Commission, recommended a goal of 25 acres of open space per 1,000 residents, which would require $790 million in additional funding, not including program, staff and maintenance costs. County staff preferred a goal of 15 acres per 1,000 residents, which would cost $346 million. Currently, the county has less than 10 acres of open space per 1,000 residents.
The county's $27 million parks bond from 2006 has yet to be sold because of financial constraints. The majority of the bond was for amenities such as ball fields, Covington said, not open space. Covington, who favors counting national parks and historic properties as parkland, said he wants to find a revenue stream outside the general fund for parks before approving the plan.
"Just saying you are going to aim high means you are stepping on top of something else or re-prioritizing something else in order to pay for it," he said.
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