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The public price tag

Some places seek proffers to cut costs

BY REX SPRINGSTON
TIMES-DISPATCH STAFF WRITER, September 10, 2000

Whose money helps create sprawl?

Yours, most likely.

New homes rarely produce enough taxes to pay for all the services they require - schools, libraries, fire stations and the like.

Uncovered costs are paid by the locality's established residents and businesses, creating a subsidy for buyers of new homes, experts say.

"It is not a free market," said Dr. John V. Moeser, a professor of urban studies and planning at Virginia Commonwealth University. "Developers would have real difficulty [building far-flung homes] if not for the significant public subsidies."

Chesterfield County pegs the cost to taxpayers at $8,163 per new house. Spotsylvania County says it's $8,888. Stafford County says it's $20,400. The numbers vary because of differing local conditions and computation methods.

To recoup all or part of those costs, some localities seek "proffers" - money or land voluntarily provided by developers. Chesterfield seeks a proffer of $7,800 a house. Hanover County seeks $6,653. Henrico County officials, figuring proffers don't fit into the county's pro-growth philosophy, don't seek them.

Even in counties that seek proffers, however, homes get built without providing that up-front money. That's because many counties rezoned huge tracts of land years ago - land that can be developed today - before the counties began seeking proffers.

Many fast-growing localities want the General Assembly to allow them to charge "impact fees" - fees assessed to developers to offset the subsidy for new homes. Except in a few limited cases, the legislature has refused.

There's a big difference between proffers and impact fees: Proffers are agreed upon when land is rezoned, but impact fees would be imposed just before the house is built. That means impact fees could recoup money from those thousands of lots rezoned before proffers were acquired.

If Hanover could charge impact fees on such lots, "it would not be the responsibility of our citizens to subsidize that growth," said county Planning Director Michael Crescenzo.

Some legislators fear the developer would pass the fee on to the buyer, driving up home prices.

But Stafford Supervisor David Beiler said the added cost could be spread among the buyer, the developer and the seller of the land, whose price was kept artificially high by the subsidies.

Dr. Peter VanDoren, an economist with the Cato Institute, a conservative, market-oriented think tank based in Washington, said it makes sense to charge a "user fee" for things such as schools, parks and libraries that will be built just for those new residents.

On the other hand, VanDoren said, many older residents who protest having to pay for new growth didn't have fees imposed on them, either. "It leaves me with a muddle. What is the right thing to do?"

Sprawl can be particularly costly because school-bus rides, police protection and other services have to be provided over greater distances, experts say.

"By spreading out your development, the costs associated with development tend to rise," said Dr. Michael Chandler, a Virginia Tech planning expert.

Some taxpayers subsidizing new-home construction are in older neighborhoods that need help themselves.

"A good chunk of what they're paying today is offsetting the cost associated with the new stuff three, four, five, six, 10 miles away," Chandler said.

The U.S. Office of Technology Assessment, now defunct, put it this way in a 1995 report:

"At a time when America's urban cores are struggling with poverty, unemployment, and deteriorating infrastructures, underwriting the costs of sprawl is particularly damaging."


 

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