Two weeks ago, I blogged how the real estate crash is threatening Prince William County’s bond rating and prompting county officials to hold off its road-building program. I thought the story was so important that I asked Peter Galuszka to take a more in-depth look.
In fleshing out Prince William’s dilemma in “Boxed In,” Peter shows how the Board of Supervisors is between the proverbial rock and a hard place. Writes Peter:
The total units of housing sold from 2006 to 2007 in Prince William County declined 24.65 percent and the total dollar volume declined 33.26 percent. Assessed value of homes overall is down 35 percent, says [Board Chair Corey] Stewart. Meanwhile, revenue from deed recording fees has taken a nose dive as well.
One thing Prince William isn’t willing to sacrifice is its hard-won AAA bond rating. To keep it intact, bond payments can constitute no more than 10 percent of the county budget. As revenues plunge, supervisors have little choice but to stretch out the schedule of bond issues that voters had approved a few years ago.
Nobody’s expecting the Comprehensive Transportation Funding and Reform act of 2007 to be much help. The Northern Virginia Transportation Authority is expected to bring in roughly $300 million a year, but only $17 million a year will trickle down to Prince William in the form of discretionary spending.
Needless to say, raising property taxes is never an attractive option in Republican-dominated Prince William. With thousands of homeowners already facing rising payments as their adjustable rate mortgages reset, a tax hike would be political suicide.
There’s talk of raising the impact fee on new houses from $30,000 a unit to more than $50,000. But home builders, already wounded by the housing crunch, are talking about rolling back proffers and impact fees. Talk about a battle royale.
I would concur with the observation of Stewart Schwartz, executive director of the Coalition for Smarter Growth. Supervisors should use the opportunity presented by the growth slowdown to think through the county’s growth strategy. Even when real estate markets return to normal, it’s unlikely that Prince William can return to its heroic go-it-alone strategy for building and financing new roads. Ideally, the supervisors will strive to plan more transportation-efficient development. But even won’t help in the short run: Prince William has a backlog of more than 30,000 houses in the development pipeline.
Prince William is boxed in. There is no easy way out. It’s going to get ugly.
