I’m sure that the account managers at the public relations firm Capital Results are not sitting around a conference table at two in the afternoon sipping bourbon. These modern day “Mad Men” don’t have time to full around like those in the TV program; they have the interests of a large cadre of builders, developers and businesses in Chesterfield paying them to change the hearts and minds of citizens, government leaders and Chesterfield’s Board of Supervisors about cash proffers.
You know what proffers are and probably tired of hearing about them. In fact you may have already turned the page. But in my opinion you should dog-ear this page and make sure you return.
A cash proffer is an instrument that many jurisdictions use to offset the impact of new dwellings have on the infrastructure of the community. These funds help pay for schools, libraries, fire stations, parks and local road improvements.
The current proffer per dwelling is $18,966, and a formula assembled by Chesterfield’s finance department calculates the number which is actually reduced from about $25,000.
The case against proffers according to developers is that they impede home builders, due to added costs, from moving forward and growing the community and the cost makes them uncompetitive in the market.
According to Citizens Against Proffer Taxes website, “Chesterfield’s cash proffer system is outdated and damages the County’s economy, kills jobs, and hurts the availability and affordability of housing.”
There has been a lot of disagreement over how proffers help or hurt the economy of Chesterfield. According to Chesterfield’s Director of Budget and Management, Allan Carmody, even with cash proffers in Chesterfield and no proffers in Henrico, Chesterfield homes are comparable in price. And, in some cases less expensive.
Chesterfield is beginning to climb out of the slump of the housing recession and is on its way to recovery. For instance there was a 35 percent increase in single-family home permits in the first quarter of this year. Year-to-date permits at the end of March 2013 – 248 and at the end of March 2012 – 185.
Chesterfield is on the road back. But as any builder or developer will tell you, it’s been a long haul. But I submit it’s been the economy in general not the proffers that had stifled the building business for the last five years.
Currently cash proffers pay for 27 percent of county infrasture. Cash proffers currently offered in cases since 1990 is $563.1 million, equal to five high schools or about 80 miles of roads. Cash proffers collected to date is $69.1 million or one-plus middle school, about eight libraries or seven miles of roadway.
Chesterfield formed a committee to assess how the county should handle proffers as it moves forward. In their final analysis the group in a 3 – 2 vote reported that proffers should be reduced but not completely eliminated.
Even if the minority vote had their way, how would the county replace the revenue? Right now it wouldn’t be difficult; even though building numbers are improving they’re not there yet.
But as each subdivision is built it puts more and more pressure on our schools for example. The way we pay for new schools and renovations of older ones is by selling bonds (there’s a new one in November.) Who pays the interest on bonds? We do. If some type of proffer isn’t in play, who pays for other infrastructure depletion due to growth? We do.
We’re on par with Henrico on the price builders charge for new homes. Cost per square foot of a house in Chesterfield with cash proffers is $116.82. In Henrico without cash proffers the cost per square foot is $136.95. Do you think that a builder here is going to drop his home price by $20,000 just because he’s not paying a proffer? I would guess he would put that 20 grand in his pocket.
Chesterfield outpaced Henrico in population by an average growth of 3,500 from 2005 through 2011 (latest figures). Point is how are we to replace that revenue. Some other type of tax is the only solution and that tax would be on all of us not just the new residents who are adding infrastructure costs and would not pay there fair share.
If you disagree on an issue, you have to offer a solution.
Sometimes called differential proffers it involves a sliding scale. Say if a builder can build an affordable home under $200,000 he pays a minimal proffer. This scale slides up to the cathedral size home where the larger proffer is not such a great percentage of the cost of the home.
How about by location? If you build homes in revitalization designated areas you pay a lower or no proffer. Infill areas much the same idea, although many have no proffer attached to them anyway. Build in an area outside the comprehensive plan development areas – higher proffer. If a new subdivision overloads a particular school – higher proffer. Apartments which can prove a lower impact – lower or no proffer.
We have many financial and planning experience at the county who can figure out a fair and equitable system. But don’t let the fox into the henhouse. Chesterfield should put a few options together and bring them to the public and be sure to allow citizen’s opinions to be weighted the same as developers.
We are all in this together. We all want a successful community to live in. We can’t be selfish and we must get involved in this one. When we talk about quality of life, this is where the rubber hits the road. Bottom line, just leave the cash proffers alone.