2008-05-14 / News

Proffers likely to increase about $2,500

By Greg Pearson

Page Dowdy/Chesterfield Observer Builders of future homes like these in western Chesterfield are likely to pay higher proffers when they apply for a building permit.
The Chesterfield Board of Supervisors appears headed to increase proffers from $15,600 to about $18,080 after holding a public hearing on May 28. The board leaders - Chairman Art Warren and Vice Chairman Dan Gecker - are endorsing implementing the Marshall and Swift Building Index for the past three years, which would raise proffers about 15.9 percent based on the cost of building materials for the southeast region.

Warren represents Chesterfield on the Virginia Association of Counties, which met earlier this month. He reports member counties with the proffer system are continuing to increase them according to Marshall and Swift.

"I prefer an [annual] automatic increase with Marshall and Swift…putting Chesterfield in line with other counties," Warren said.

"I was only planning to go with the Marshall and Swift increase," explained Gecker. "Our proffers aren't so out of line that we need to make dramatic changes."

On May 1, Speaker of the House of Delegates Bill Howell wrote eight associations and groups asking that local governments consider "a request…postponing any increases in their present cash proffer guideline amounts prior to the 2009 [legislative] session in order to facilitate more fruitful discussions on cash proffers, impact fees and any other legislative proposals…" The letter was prompted by Senator John Watkins' (R-Chesterfield) Senate Bill 768 last session, which would have done away with proffers in favor of impact fees. The proposed legislation is scheduled for more review next year.

An increase in Chesterfield's proffers is not sitting well with the Home Building Association of Richmond. "With the housing market in such a slowdown, it makes no sense to increase the cost of homes even $1, much less what's proposed in Chesterfield," said spokesperson Warren Wakeland.

County Administrator Jay Stegmaier says county staff is updating the cost estimates for proffers from last year using the existing formula, and that estimate will be shared with the homebuilding industry. "[Howell's] letter doesn't have significant bearing on the issue here," he said, noting that Howell's letter referred to "unbridled residential growth."

Before revising the costs, the Budget and Management Department's current recommendation is for proffers to be increased to $23,072, a 48 percent hike. Proffers are the fees that developers pay when building new homes to offset the costs of providing services such as schools, roads and fire/EMS for new residents. The fee is the same regardless of whether the new home is single-family, a townhouse, condominium or apartment, and is collected when a building permit is applied for.

In December 2006, the previous board declined to raise proffers, saying they were sympathetic to arguments from developers. Developers complained the homebuilding industry was being singled out for a tax and that the fees make it harder for first-time buyers to purchase a home.

During the May 28 hearing, Gecker hopes for board "dialogue on our long-term infrastructure needs."

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