Monday, July 6, 2009

What Does the Recent Proffer Debate Tell Us?

Well, the Chesterfield County Board of Supervisors took another stab at the Cash Proffer debate last week. I have been awaiting many of the members, including I-Daniel Gecker of Midlothian to deliver on some of his campaign rhetoric from 2007 when he launch attack after attack against incumbant R-Don Sowder for being unwilling to make developers carry a bit more of the burden regarding growth, but again Gecker failed to live up to promises he made to voters.

In a 3-2 vote, the Cash Proffer rate was increased but by any standard it was again a victory for the developers who seem to be entrenched with sentiment within our current Board which promised sweeping change during the campaigns of 2007. Unfortunately, only I-Marleen Durfee and D-Holland seem dedicated on delivery what they promised.

Again this time around as in last year it seem to come down to the forces of Durfee and Gecker. Durfee managed to get a compromised rate increase last year in the face of Gecker's continual objections to any increase initially. Durfee sought much higher rates than the approved 18,080 that was passed then and this time around the Board fell short of the estimated 25,511 break even analysis by increasing the rate a mere $886 to $18,966.

Some would say its a small victory, but given the rising costs of infrastructure and the fact that the County already lags considerably behind other juristictions of its size in proffer rates the Board again has failed to begin the process of bringing the tax burden of growth to more of a shared contribution. Gecker in his campaign of 2007 stated publically that he flet that the 80/20 citizen to commercial/developer ratio was unfavorable and used this ratio as a sword against his opponent and yet in two years this citizen fails to see in any instance where Gecker has delivered on policy where that ratio will realistically change.

We have to remember that after years on the Planning Commission, Daniel Gecker has had a sustained relationship with the developer community throughout the planning process for some of the largest scale developments in the County's recent past. It was the hope of voters in the last election cycle that because Gecker understood the developer dynamic that he would better serve citizens at narrowing the gap between offsetting the costs of growth.

Loudoun County whose growth is mirroring Chesterfield in many areas has proffers of 48,000 per lot, Stafford County 43,000 and Prince William County 37,000. Are we really to believe that it costs these areas fifty percent more to deliver on services to its citizens or is it simply a fact that Chesterfield has determined not to have business pay its fair share in large part because of the stranglehold developers have had on the Board in recent years?

We continue to get the same arguements from the developer interests regarding the passage of such fees on to home buyers and how the Proffer System itself is broken and the debate over other methods is still unresolved. Meanwhile, many of these developers, especially the public firms continue to pay those proffers in the other areas of the State without too much debate.

Why?

Developers understand to to penetrate and gain access to markets as favorable as Loudoun and NOVA there comes a price. There is tremondous income demographics for them to provide the housing to offset any of the proffer rates being imposed there. Are they saying that Chesterfield cannot support such home prices or housing specs to offset the increase? And is the rhetoric its about affordable housing sincere or merely just another smoke screen?

In my view, access to markets such as Chesterfield or Henrico is in high demand because of the People who live here and the adjusted gross income that remains stable in the area to support new housing. Developers have yet to make the case, other than in rhetoric (fear rhetoric) that rising proffers would make economic development suffer. Besides it is my understanding that commercial development is not paying proffers and the system is set up for residential development. If the Board is really concerned with balancing the cost of true growth in the County, should not commercial interest pay their share as well as the residential developers?

Another profound Gecker quote,

The proffer increase is "really meaningless in the grand scheme of things".

Really? I think the case very well may be made in 2011 that that assessment can applied to Geckers leadership as well.

15 comments:

Anonymous said...

Alter this debate goes on every year with the Board and very little ever changes.

The influence the developer interests have upon the members is significant and always has been. Until the average tax payer begins to stop focusing these little "tea parties" on the Federal issues and stop sitting by and allowing local officials to continue destroying the quality of life in the County nothing will change.

The Board is serving is main constituency; the commercial intersts.

Ever attended a Board Meeting? Is always dominated by the fiocus who have "business" with the Board and rarely citizens unless there is some issue driven by the local media like the immigration debate or a zoning case that effects a certain neighborhood but rarely does the County show up in large numbers to put the clamp down on the Board.

The increase in the proffer rate was a joke given the number that the County needs to pay for services per lot. What does it say about members who will not even make the call to bring the level of the proffer to the recognized required amount?

James in Bon Air said...

AOF- I know you are taking your support for Gecker very hard. He has not delivered to be sure. You were not the only one duped. Many of us who supported him are left with the same feeling. The problem is no one locally has seem to be willing to step up to the plate as of yet in opposition, like say a Durfee did to the Board in 05/06.
The Observer seems content on not being very critical either of anyone, but then I imagine there a bit of a realtionship there given the County releases all its news/updates as well cases in that paper.

Anonymous said...

Chesterfield County is paying about 40% less for current road projects such as the Swift Creek Reservoir causeway upgrade than budgeted. $7.5mm vs. $12mm that was budgeted. School projects consistently run over budget, but it is the fault of folks that want to buy a new house in Chesterfield? How in the world can the County say infrastructure now costs more when it is paying less, by huge amounts, on it's own projects?

Companies that operate this way go out of business. Government simply raises taxes to compensate for its inefficiencies.

How do you suppose the BOS justifies increasing proffers when Chestrfield's own costs for the same infrastructure are less today then they were a year or two ago by almost half? Henrico just announced a major road infrastructure project. Why? Because they recgnize now is the best time to invest - costs are LOWER!!!

The $25,000 figure for capital impacts per house is a joke. Raise proffers to $25,000 and the government will tell us how it costs $50,000 per unit.

One thing is clear. The private side can build infrastucture better, faster and cheaper. Provide incentives to some of the companies looking for work and see what happens.

The more government justifies increasing taxes to do things that prvate risk and equity should be responsible for the closer we all get towards socialism.

Will said...

Excuse me, but the private sector IS building out the infrastructure on behalf of the County.

The problem is the County continues to use non-County consultants and compnaies to do their bidding.

It makes little sense that other localties with the same growth rates have both proffers and tax rates higher than Chesterfield. Is it that Chesterfield is just a reasonable place to live or is it that the County has artificially kept these rates lower to appear to be pro-business. The result of such rates will trickle into the long term planning shortfalls in terms of budgets.

We have yet to see any real major substantial cuts to Capital projects in the CIP. There has been talk but as Alter has noted given the environment do we really need an 18 million dollar library on Robious Road? Regardless of how/where that funding is allocated, it still has come from residents primarily in one way or another and I think we all can find a better way to be spending that kind of money on projects that are better worthwhile both in the short term and the long term.

Anonymous said...

Apparently Mr Gecker believes that developers need a shot in the arm during a difficult economy, but I am astonished that Gecker has so quickly forgotten how the county got into this mess in the first place. For too many years, Chesterfield leaders thought roof tops would build a prosperous economy, and while more housing certainly did have its benefits, it was only regulated by the market place. Noone was concerned about the growing burden on the taxpayer, the environment, the lack of transportation choices, or the safety of our citizens, that is, until home values fell and the revenue dried up. Only now, does the county have "buyers remorse."

I wish our economic problems and housing crisis could be eased by simply lowering proffers, but it isn't a long term, sustainable solution. Hopefully Chesterfield leaders will eventually come to learn that managed residential growth is achievable and beneficial if they make decisions based on what taxpayers and the community can sustain. If what Gecker says is true and lower proffers would help homebuilders in a difficult economy, how many of us are willing to pay more in taxes so we can subsidize more jobs in the private sector? I, for one, have had enough with bail outs! Until we can pay our bills, we should worry more about our own economic house and less about the financial distress of the homebuilding industry.

JD said...

I agree with alot of what is being said in the comment thread here.

I fear there appears as if there is a legitimate question regarding the balance of interests and just whose interests are truly being served when we talk about proffers.

The typical rhetoric is that those fee increases will be passed on to the consumer and thus is an artificial tax of sorts. The other fear tactic is that with rising proffers developers must build higher cost units to offset such costs given the proffer expense is fixed on a per lot basis.

In short, the developer community is telling the Board they will not build out "affordable housing" if the proffer rates are raised substantially to the 25,000 level or more. My real concern for the future of the County is that the Board in years past and this one is not concerned with affordable housing for those families who fall below the average adjusted income range for the County.

The Board has been quite content approving zonings for developments where the base unit starts in the 400K range over the years for single family homes, especially in Midlothian. They have created a situation where there is no middle range between the older neighborhoods along the Robious/Huguenot corridors and the new developments. For example you have home values hovering around 230K along Robious between Midlothian and Huguenot and then you have them skyrocket to 500K to 800K for the newer homes. Eventually a rental sprawl district will result without any medium housing.

The solution in the past has been for the Board to use multi-unit, condo or townhome developments as the means of "affordable housing" where they use this requirement for larger scale approvals simply as a bone to say they are doing something about affordable housing.

Gecker is right in that they have made the proffer rate "meaningless" because they are not serving the interest of the County by continueing the tradition of cow-tailing to the developer community.

The County must look at its policy concerning commercial development as well. There must be an established relationship between citizen, residential developers and commercial developers in terms of the shared expense for the future.

Gecker has been at the wheel of sorts for many years. After years on the Planning Commission he oversaw a substantial amount of the buildout of the County and now as a Supervisor apparently wants to continue what he professed to change in Chesterfield. He knows these interests well and has been working with them for years and appears to be comfortbale with placing those interests above that of his District.

Couple the proffer issue with Gecker's issues with the SB and the fact that he recently stated that he believed that spending funds on middle schools was a waste in the future and it makes you wonder just where Gecker is coming from on these matters.

Anonymous said...

If this post was meant to be a debate about proffers, it’s going down the wrong road. The BOS did, in fact increase the proffers. Mr. Gecker did not support the increase because the budget director could not justify it. After all the years we have had the proffer system, permits that pay proffers have not even reached 40%. The methodologies change every year to reflect what the administration wants, and between now and next June (when the proffers are reviewed again) there won’t be enough units zoned to make it worth the paperwork. FY09 total residential building permits are something like 600. How do you think you are going to provide infrastructure with no activity? In this case, Mr. Gecker was right. All five supervisors are on record stating the proffer system is broken. It seems that the three that supported the increase are the ones breaking their promises. Why in the world did Mrs. Durfee not mention Impact Fees? If she understood planning, she would spend more time listening and less time telling everyone that she brought smart growth to Chesterfield. (The principals of smart growth have been in the comprehensive plan since the 80s)
The county has impact fee authority for transportation. They should continue those discussions now, while activity is low. They should also be communicating with every constituent they have to start a strong public outcry to the General Assembly to include other facilities with impact fees or to allow a funding mechanism that has a chance of providing infrastructure in advance of development.
From what I have seen, some of the BOS members are actually trying to improve funding and transparency and some just like to talk about it. Either way, the increase in the proffer this year won’t produce enough money to buy a trash can for all of the bologna coming from some of our fearless leaders.

J. Scott said...

Why should Durfee mention "impact fees" when the General Assembly has yet to legitimize such fees under State Law.

Mr. Gecker did not support the impact fee equation either and was critical of State Senator John Watkins (R) representing a good portion of Gecker's own Midlothian District who brought the debate to the Assembly.

Gecker is on record last year challenging the increase that was supported by members of the Board and a compromise increase was voted on and approved. Had Gecker not voiced opposition last year than many of the lots that have come through zoning would have fallen the last year under a much higher rate than the 18,000 range that was settled on.

Again, this year Gecker broke with members in support of developers by keeping the rate lower than the initial suggested rate change.

Regardless of whether the proffer system is broken or not, these members have only the proffer system in place and not "impact fees" to work with. One can quibble all day long about its merits, but I fail to see any solutions being offered up while the County awaits the results of the impact fee debate.

The fact remains that Gecker can be tied to much of the zoning approvals of the last decade. hacving been appointed by Ed Barber (D-Midlothian) to the Planning Commission and later becoming Chairman, he has had a hand in every major project inmpacting the County.

What gecker has done is transition his pro-developer agenda from the Planning Commission to the Board in the last year even after campaigning to bring about controlled growth. His rhetoric may have been pragmatic but in the end his results are unimpressive on delivering what he campaigned on.

Gecker sent out direct mail pieces emphasizing the role of the Republican Board in failed growth policies and yet his tenure on the PC ties him directly to that history as well. If the Upper Swift Creek Plan debate is any indication of how our growth issues are to be resolved we are really in trouble.

"impact fee authority" is exactly what Gecker has supported via his involvement with various regional planning commissions that endorse Transportation Authority premises which will allow taxes to be levied upon residents in certain areas of the County. We have already seen this implemented where certain property tax rates are higher than others to offset infrastructure costs have we not?

Its not just a flawed revenue model regarding costs offset by proffers but also an ill-advised and misallocation of resources within the CIP authorized by the County as well. The County not only wants to continue opening the flood gates of growth (residential) with new home development approvals but at the same time wants to fight with the School Board over projections of the number of students and over capacity.

If you build it people will come folks. They have been coming for decades and I wonder just what Gecker and the others think will happen when ground is really broken at Magnolia Green, Roseland, and others?

I will tell you. Gridlock on our roads and infrastructure. They will say that it will not happen all at once and it will be a process of 15 years, but given the history of flawed long term planning we will still be in the same state then; trying to play catch up.

Our schools have had trailers outside of them for almost thirty years folks. 30 years. If there is any other indication of poor planning I would love to have someone spell it out for me!!!!

Alter of Freedom said...

For the record since the Watkins Bill has been mentioned in this thread that came about in 2008;

Watkins illustrated that under his Impact Fee provision Chesterfield County would have garnered some 88.7 million in fees from 2004 thru 2007 VERSUS the 27.1 that the County garnered with the cash proffer system.

One important issue in the bill was the fact that it would have broaden the contributions to include "by-right" residential and commercial developments that were currently exempt under the proffer system. The more contributions thus the lessor the overall per unit cost or so the arguement goes.

The big issue is control. Do you want the County to be in control of land use or do you wish it to be controlled at the State level?

Another aspect that went rather unreported was the real Property Relief Fee. This measure would provide 20 cents per $100 of value a property garnered at sale to be allocated to the Capital Improvment Fund. Thats right. This is already done in places like NOVA, but no one last year or this year has talked much about that proposal of fees. Think of that as simply just another "closing cost" of sorts or a tax on the sale of your property. The kicker is it keeps repeating everytime a property is sold eventhough it may have already covered the costs the County incurred for services.

Anonymous said...

Proffers are nothing more than a tax on buyers of new homes. Before a house starts the builder pays the County 750 for a building permit, 8000 for a utility connection, and any applicable proffer. These are passed on to the buyer like any other cost.

The proffer cost is actually going up alot as a percentage of the home price. How is this? Simple. Future new homes will be smaller and less expensive than new homes of 2000-2006. They will also be less numerous.

It looks like Magnolia Green will be built out by the national builders who will construct less expensive units than what was planned.

As for Durfree there are many who have worked with her in the past only to learn it is all about her. The PTA moms have already stared organizing to see that she is not re-elected.

James said...

That ntion that the builders are "downsizing" is catagorically false.

Builders such as Ryan, Toll anf the old Centex (has been acquired) are reallocating those lots that were financed and as they right down those lots that have yet been built upon are buying those very same lots back at better rates. This is going on nationally and not simply locally.

As to proffers being a "tax" on consumers. This analysis by the critics is merely a scare tactic bent on convincing the public that is an unneccessary item. This is false as well. The fees generated by proffers enable a housing unit to be connected for services. How many houses in Chesterfield are selling that are septic? Fewer and fewer. Why? Buyers want new homes connected to public sewer, water, electricity , ect. The proffer is meant to offset the expenses associated with this.

IF the developer had to cover the costs of these service hookups the price of the new home would certainly be as high or higher. Either way, consumers want these services that are independent of the actual home construction per say but provide a level of resale value as buyers demand such services, especially for new home developments.

We are not even really talking about public safety requirements. What about the costs associated by the County to provide such services as EMS/FIRE or police in such areas as say deep Chesterfield.

I have always bee a major proponent of NOT appriving any zoning or rezoning unless Fire/EMS or police can respond to the site in less than fifteen minutes. Currently, their are areas of the County with much greater response times. I believe that some of these zoning approvals have put residents at risk. I am a supported of property rights, but if one is to build a new home on such rural lots than their should be a level of standard in place to offset the costs with regard to safety. You can bet if something was to happen, homeowners would demand response to meet an emergency.

The Proffer debate is a critical one and it seems to me that the Board is still sitting on its hands. Until they can prrovide a reasonable and equitbale solution, all zoning cases should be held up until the system is fixed. We all know the system is broken, but we all also know that our schools lag behind growth and at or near capacity.

If there is some silver lining in the poor economy and the slowdown in housing it is that it has afforded the County an oopportunity to correct past mistakes.

The question is whether or not this Board will seize the opportunity to make the required changes.

Anonymous said...

The utilities connections are charged whether or not there is a proffer paid.

It is a tax on SOME new homebuyers as there are many lots they were zoned long ago.

New home buyers are not the only new folks consuming school services. Many older folks sell their homes to County newcomers. A house that was not using schools has new owners with students.

Builders may be buying lots but they are not building right now.

Anonymous said...

And is not the proffer paid at the time that builder is authorized to build or approved and NOT when they actually build????? Is not the proffer predicated on the zoning case and not when they begin construction?

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