South of the James

By Conaway Haskins

Note: The following are prepared remarks presented at a Chesterfield County Board of Supervisors public hearing on Wednesday, October 12, 2005. The hearing was on the Board’s proposal to raise cash proffers charged to residential developers from $11,500 to $17,000. Media coverage of this issue highlighted the campaign that area homebuilders and their allies initiated to stir up public sentiment against the move to raise proffers. Following the widely-attended session which had its share of vigorous debate, the Republican-dominated (4 GOP, 1 Democrat) Board unanimously voted to raise the maximum proffer at $15,600. I would like to commend the supervisors for having the courage to stare down the homebuilder interest groups and provide vital resources to help meet the county’s needs in response toincreasing growth and development.

Good evening Mr. Chairman and members of the board. Thank you for extending to the citizens this opportunity to address this important issue. My name is Conaway Haskins, and my wife and I bought a new home last year in the Matoaca District. We moved back to this area from
Northern Virginia to have a better quality of life. We are now concerned that, without better growth management, Chesterfield may fall victim to the same clogged roads, overcrowded schools, and nondescript strip development that hurts the character and livability
of many Northern Virginia communities.

Having been trained as a regional planner, I have gained a few insights into the cash proffer issue over time. As the purchaser of a newly-built home, I am sensitive to the notion of increased home prices. However, given the pressing infrastructure needs that accompany new homebuilding, I want to express my full support for the proposed raise of the maximum proffer from the current level of $11,500 to $17,000.

Claims have been made that proffers will increase property taxes on all county homeowners, will hurt our competitiveness with surrounding jurisdictions, will hurt commercial development, will force buyers to other places, and will not provide a steady income stream for the county. Many of these claims are misleading. Opponents have also proposed a 1% sales tax increase, and or property tax rate increases. However, I don’t accept the premise that proffers will create problemsfor new homebuyers or hurt economic development.

First, no one is forcing folks like me to buy new homes; there are well-appointed existing homes available in good supply throughout the county. While owning a home is the American Dream, owning a new home is a luxury. Second, companies do not make site selection decisions solely based on the availability of new construction. Chesterfield, in particular, does not have this problem as the county is often a prime bedroom community for Metro Richmond. Your recent struggles with justifying the county’s comparably low return on investment of membership in the Greater Richmond Partnership are perfect examples of this as you’ve seen firsthand that companies moving into the region look to Chesterfield first as theplace for their workers to live.

Third, consumers of these expensive new homes make their purchasing decisions on the basis of factors like school scores, commuting times to work, and neighborhood aesthetics, not proffers. In residential housing markets, proffer sizes are not substitutes for amenities. If buyers want to save $17,000 and still access the county’s top-notch schools and quality of life, they have the option to choose existinghomes, or they can forgo certain new-home features.

As opposed to proffers, new homes price increases are governed mostly by: 1) Pure profit-seeking actions by builders such as lot price increases and premium prices charge for options above stand models, 2) Allowable broker commissions and fees, 3) Builder price adjustments for increased material and transportation costs, and 4) Greater buyer financial capacity due to creative credit and mortgage products like adjustable rate mortgages, piggyback loans, and interest-only mortgages. The proposed proffer increase represents only 5-7% of the average new home price, which is now above $300,000 in Chesterfield. Put another way, the $17,000 proffer is the equivalent of a brick front, or a combination of marble floor tiles, granite countertops, and hardwood floors.

I support the higher proffer because: 1) They allow for more strategic growth management by slowing the rate of residential building and leaving more land for potential rezoning as commercial, 2) They provide additional revenues to make up for the negative fiscal impact of new homebuilding due to needs for additional schools, sewer lines and roads, 3) This move sends the message that our community is valuable and has standards that need to be upheld, and 4) They are paid by the very people whose home-buying choices fuel the need for new infrastructure, thus preventing new buyers from free-riding off existing homeowners and other taxpayers by diverting property and sales taxes to benefit new buyers in high dollar communities.

In sum, proffers are fair and give the board another tool to finance our critical needs, help maintain high quality government management, and trulycontinue our status as a First Choice Community.

Thank you.