Is The End of Cash Proffers Near?

By. Neil Williamson, President

If the goal of cash proffers is to “make growth pay for itself”, the policy has failed.piggy-bank

If the goal of cash proffers is to suppress market demand with increased regulatory costs, the policy has succeeded.

On Tuesday afternoon, the Albemarle County Board of Supervisors and Planning Commission will hold a special joint meeting to discuss cash proffers.  The Free Enterprise Forum is hopeful the discussion includes success metrics.

A cash proffer is an amount money that some (not all) new home builders must pay a locality for the privilege of constructing  a new home in the community.  These funds are in excess of the water/sewer hook up fees, sidewalks, streets, street trees, stormwater management, open space and affordable housing requirements.

But not all localities inflict cash proffers on their citizens.

The vast range of costs locally are illuminating.

 

Locality Maximum Cash Proffer
Albemarle Single Family Detached $20,986.76Townhouse $14,870.61

Multi Family $14,270.99

Charlottesville No cash proffers
Greene $5,778 per unit
Fluvanna $6,577 per unit
Louisa $4,362 per unit
Nelson No cash proffers

Albemarle has been aggressive in their regular increase in proffer cost while the BOS has been underfunding their required capital improvement program (CIP).

Albemarle proffer amounts 07-14

Those supporting cash proffers would say this is one way to get development to pay for itself.

But it doesn’t.

Too often this is just a new piggy bank to fund pet projects that have tangential relationship to new development.

Attachment F in the Staff Report highlights proffer expenditures including almost $300,000 for North US29 Study, $50,000 for a Western Park Master Plan Study and $15,000 for a feasibility study for Northside library.  While each of the studies may have merit, can the case really be made that rezoned property created these needs?  Why should the new home buyer have to bear the burden of determining if the community has ALREADY outgrown their existing library?

Other expenditures are equally disturbing

$150,000 to upgrade the Wireless Area Networks at 4 Schools serving Still Meadows Residents

Did the rezoned land make the existing Wireless Area Network obsolete?

$302,199.32 for the Crozet Library

Crozet had been seeking a new library since the 1990’s.  New development did not create this need but it did pay for it.

$83,379 for the Ivy Fire Station

Is the new development that partially funded the construction of this new station even in the response area of the station?

The reality is the cash proffer policy is fatally flawed and produces  unintended negative economic and planning impacts.  Some localities have already done the right thing and repealed this “rezoning ransom” and replace these funds with more dependable and equitable infrastructure funding options.

The discussion Tuesday should not be about how to tweak the existing cash proffer system instead it should be a discussion by the Board on how to equitably dismantle the system.  A full repeal is a much more economically and ecologically sensible and sustainable alternative.

Cash proffers are per unit fees “voluntarily” extracted from applicants seeking to rezone their property. In theory, such “voluntary” proffers would be directly tied to the costs associated with the increased density of a rezoning. In reality, cash proffers lower land values, encourage development contrary to comprehensive plans, and create false hope for outside infrastructure funding.

Cash proffers have produced a plethora of Contradictory Consequences without achieving significant benefit. Now is the time to repeal this rezoning ransom and replace it with a more sensible and equitable alternative.

clip_image0024_thumb.pngNeil Williamson is the President of the Free Enterprise Forum, a local government public policy organization located in Charlottesville. The full Contradictory Consequences report can be found at www.freeenterpriseforum.org

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2 responses

  1. Neil, since you acknowledge that, “…the BOS has been underfunding their required capital improvement program (CIP).” How would you propose we pay for these services without a cash proffer? A property tax hike so that all taxpayers in the county share the burden?

  2. […] projects that increased capacity in their cash proffer calculations.  Surely this will prompt significant action in Albemarle.  In September, the Supervisors sent the issue to the Fiscal Impact Advisory […]

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