Thursday, December 14, 2006

Cash Proffer Safe in Chesterfield

If you read the Transportation Summit blog you will be well aware that one of the things localities could chose to do is raise the cash proffer fees for home builders. The proffer is the fee the builder pays per lot to compensate the locality for the constructions impact on local services, roads , emergency services, social services and you name it. The proposal was to raise the fee level to maximum of $22,600 from the $7,000- $15,000 or so range it is currently. The measure was hoped to offset increases in transportation woes with regard to roads.
The Cash Proffer increase was denied. Fact is Home Builders had this one in the bag. All the caimpaign rhetoric went right out the window. Chesterfield County schools taught me in civics class in middle school that all politics is indeed local. Local? I get it. Major national construction companies buy up land in a locality for the purpose of having it rezoned for development, lobby the Planning Commission, the Board, etc get approval, build out the development and contribute just enough to local caimpaigns to keep any measure that would "burden" their business from existing. The only thing in this that makes the politics local is that it is our fellow residents sitting on the Commission and the Board selling our community short.
Chesterfield as some great local builders. The increase they say would burden them. This is where the logic goes a little fuzzy. It would seem to me that the majority of the lots being built are being completed in major dvelopments by the big guns. We know the names. The publicly traded builders building all over the country. Richmond has been flooded over the last few years with these projects because we lag behind the country in such fees. It is cost effective to build here. It amazes me how our Board is concerned with the business of this industries bottom line and not the betterment of our community. So the county gets up to $15,600 for a lot that sells in Tarrington in Mr. Sowder district of Midlothian for $300,000 and the county gets about 5%. The builder places a home on the lot that sells for $750,000 and sells it. What we should be asking is how these companies are getting to that new construction price. They already back in the proffer anyway as a cost of business but what is the avergae rate of return on investment in Chesterfield County for a new home being built in the county at the current proffer level. Thats the question. My guess is Chesterfield's rate of return is higher than the national average. That is not to say that the builders are at fault. They are not. They are doing business in the environment that is set. The fault lies with our Board and Commission.
Back to the local builder. If what the board says is true and the increase is bad for business or bad for the local economy then consider this: If the major construction companies are forced to pay higher proffers and decide not to build or slow its exposure to an area then would that not help the Board in its so-called endeavor to "limit" or "control" growth. If thats what they truly wish, could they not solve some of the transportation issues with the increase, reduce the number of lot constrcution at the same time and allow the county to catch back up before flooding the county roads with more residents and having to build more schools. Remember, the construction companies can still build. It is there choice. These companies should have to run the numbers and make that determination. And if they chose to pass, well than doesn't that open the door for the small local builders to fill the void. And if less growth is better, then would not home prices continue to rise since the availabilty of new homes would be lessoned and that local builder would be able to garner a higher sale price for its work. I think Chesterfield County schools taught me something about Supply and Demand as well.
Don Sowder, you had an opportunity to make it right and be the voice of those who elected you to office who seek controlled rational growth for the county. You failed to seize it. Lets watch how Mr. Gecker and the Planning Commission go about business in 07, I think we will see a re-match for the seat on the Board in Midlothian.
When residents in a district are turning homes at such profits as they have in the last three years, it truly begs the question would a cash proffer to the builder really impact all of us in the County when put up against no action at all with regard to our roads. No one really perceives the proffer as a tax except the business interests that the Chesterfield County Board of Supervisors is surrendering to. Exactly how many seats on that Board will be contested in 08? Quite a few I suspect.


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