Proffer issue gets statewide attention

Before the fall of 2008, cash proffers, referring to fees developers pay to mitigate the impacts that an increase in population has on schools, roads, libraries, public safety, fire and EMS, were lower than they are today and the real estate market was moving at a pretty good clip.

But as the bottom fell out of the market the Board of Supervisors continued to raise the amount of cash a builder would need to give the county before selling a new home. The cash proffer now stands at $18,966 per home or apartment unit. In addition the builder must pay water and sewer hookup fees, well over a combined $5,000.

According to an article last week by Commonwealth Partnerships, “Localities throughout Virginia are examining their policies on proffers. Last week, the Hanover County Board of Supervisors voted 4-2 to eliminate cash proffers on new development. The county joins the city of Richmond and Henrico County as Central Virginia jurisdictions without a cash proffer. With the elimination of cash proffers in Hanover County, Chesterfield County now has the highest cash proffer for new homes in Central Virginia.”

Chesapeake, on November 13, adjusted its cash proffer system by going with a flat rate for maximum cash proffers. According to Inside Business, a business journal in Hampton Roads the new rate would be, “$4,000 for each single-family detached home; $3,000 for each single-family attached home such as town houses and condominiums; and $2,000 for each multi-family home or apartment.”

In the entire United States, Virginia is the only state where cash proffers are used, almost statewide, as a growth management tool.

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