Growth that Pays for Itself

One of the recurring debates on this blog addresses the extent to which growth should “pay its own way” — or, to be more specific, the extent to which developers should cover the capital costs of public investments such as road improvements, schools, fire, police, libraries and other public facilities — a number that could reach $90,000 to $100,000 per dwelling unit in Northern Virginia.

There’s a raging case study in the South Dulles area of Loudoun County, where Greenvest is proposing some $800 million in proffers and $200 million in Community Development Authority funding over the 20-year life of the project. Just think of that: One billion dollars in private-sector contributions, over and above the taxes that developers, business tenants and homeowners normally pay in taxes to fund the cost of local government.

In my latest column, “Growth that Pays for Itself,” I delve into the pros and cons of the Greenvest proposals. What I find ironic is that Greenvest has taken on so much public cost that it increases the risk that its projects will fail financially — at least its critics see it that way. It’s kind of a damned-if-you-do, damned-if-you-don’t thing. If the proffers are too small, you’re not paying your fair share. If they’re too big, you run the risk of failure. That makes it pretty tough to get anything built.

To my mind, the best argument against the project is one the critics I talked to didn’t raise: Greenvest has not designed its South Dulles projects from the ground up with transportation-efficiency in mind. To Greenvest’s credit, the projects are mixed use, with pedestrian-friendly elements, and Greenvest is willing to proffer some 15 transit buses. Also to Greenvest’s credit, development in the South Dulles area would provide elements of what Ed Risse calls a balanced community, with a mix of residential, commercial and amenities — even a satellite campus of George Mason University (land donated by Greenvest) and an Inova hospital facility on a neighboring property.

But the prospect of gridlock in that corner of Northern Virginia is so great that any development in any location must make transportation mitigation a top priority. That includes not only contributing to road improvements, as Greenvest proposes, but an aggressive traffic demand management program — encompassing, walking, biking, vans, buses, carpools and telework — to reduce the number and length of car trips.

I will continue to track the Greenvest proposal as it plays out this fall.

(Rendering shows the proposed Arcola project town center and GMU satellite campus.)

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24 responses to “Growth that Pays for Itself”

  1. Ray Hyde Avatar

    I thought this article was one of your best.

    Based on your analysis of the pros and cons, and how difficult this will be on a relatively clean slate, can you imagine trying to superimpose this project over the top of any other existing area?

  2. nova_middle_man Avatar

    Echo on the quality and balancing it as well. How long did that take? (see first point below) The last paragraph speaks volumes

    “Bottom line: There are no simple solutions for Washington’s runaway growth. Every alternative poses an element of risk. Someone always ends up holding the short end of the stick. If planning for growth were easy, someone would have stumbled across the formula by now. But no one has. If we can avoid monumental fiascos, we’re doing about as well as we possibly can do.”

    Sometimes I get concerned that the BOS/Planning Commission or about 30 individuals has so much power (how could they possibly have the time to collect this information while dealing with life and all of the other concerns of the county) but the beauty of the democratic system holds them accountable.

    The sticky point is the pro-growth/no-growth flipflopping of the board. The comprehensive plan provides some stability but not when it is constantly being amended.

    Is the solution a complete overhaul of the comprehensive plan but then somehow locking it until 2025? Would it be possible to get Fairfax, PW, Fauqier, to buy-in as well creating a greater Northern Virginina Plan also tied to transportaion. Is that a pipedream? 🙂

    The current piecemeal disconjoined approach is a slippery slope to disaster.

  3. Jim Bacon Avatar
    Jim Bacon

    Ray, No, I can’t imagine superimposing this project anywhere else. Greenvest designed it for the zoning density it thought it could obtain, which is what I would categorize as low-moderate density. You wouldn’t go with this plan if the permitted densities were higher. Also, I don’t see this working outside of Northern Virginia. Where else in the state could a developer even dream of contributing $1 billion to public infrastructure?

    Nova Middle Man, you point out a very real problem — the lack of regional planning. Fairfax, Loudoun and Prince William frequently make zoning decisions the impacts of which spill into neighboring jurisdictions. Major planning decisions need to be made with a region-wide perspective in mind. Will that ever change? Don’t hold your breath.

  4. Jim Bacon Avatar
    Jim Bacon

    On the topic of regional impacts of major zoning projects, I received the following admonishment from Greg Gorham, of Prince William County:

    In the article about the Greenvest proposal you state that it represents a buffer between the suburban east and country west. This is false. There is no buffer between the Rural Crescent in Prince William County and this dense development. This proposal is going to put huge density on the Prince William county line and guess where they will drive to get to Fairfax County … right down two-lane roads. Prince William and Fairfax citizens groups and government planning staffs are against this Loudoun growth. Remember this Loudoun development will spill over into the neighboring counties.

  5. Toomanytaxes Avatar

    While there may well be serious problems with the proposal, Greenvest deserves some level of praise for listening to citizen and government concerns and making what appears to be a good-faith attempt to address those concerns. Whether the proposed solution is adequate is yet unknown.

    NoVA MM – Very interesting suggestion about regional planning. At some level, it needs to be done. I suspect, however, that there’s too much distrust in the process for the necessary consensus to develop. Recall that the proponents of the sales tax referendum also proposed a regional authority to manage projects. An awful lot of ordinary people were concerned that such an authority would be just another place for the developers and their lobbyists to manipulate the process. I also recall a fear of Fairfax County domination of the authority.

    IMHO, we may well be well down the road to that disaster.

  6. Ray Hyde Avatar

    That wasn’t exactly what I meant. I was thinking more along the line of superimposing the planned density on top of someone else’s existing density over an area of equivalent size.

    I imagine if you did that you would have a whole lot of people come out of their cubbyholes with arguments similar to those that TMT makes: why should we get saddled with more density just because we have some. Whereas in Loudoun the question is why should we get saddled with density, we have enough growth problems already.

    Nobody wants it anywhere, but it is going somewhere, and we need the best accomodation, not the most resistance.

    The comprehensive plans are not really plans at all, the ones I’ve read are mostly vague policy statements. Even if they were truly comprehensive and truly plans, you would expect a lot of changes over the years.

    As you say, no one has figured out the magic formula. It is hard to imagine that in 2024 people are going to pay much credence to a bunch of graybeards from back in ’06 who didn’t have a clue and who are probably dead by then.

    Trying to prevent change takes a lot of effort, and in the end what you wind up with is what you have now – if you “succeed”. Rather than try to fortify the comprehensive plan, which will take still more regulations, we should be trying to put together a system that makes changes easier to accomplish and opposition harder to mount.

    That means you don’t want megaplans and megaprojects, like are giant and antiquated arterial transit systems. You want little modular plans that you can change, abandon, or demolish at will. We’ll have more transit capacity and more transit options with a million golf cart lanes than with a thousand freeways. I’d rather see a thousand neighborhood ball parks than one giant RFK that is obsolete anyway.

    We can build giant sea walls to hold back the surf, or we can just go with the flow and learn to enjoy surfing. The beaches make the best seawalls precisely because they give and shift with the forces applied to them, instead of resisting change, and they cost a whole lot less.

    I’d say the overarching master plan is the slippery slope to disaster, and a surefire way to guarantee that the maximum number of people don’t get what they want. If we think that is the purpose of government, then we really do need fundamental change.

  7. Ray Hyde Avatar

    There you go. Not only the people who will get hit with this are against it, so are their neighbors.

    There are over 13,000 jurisdiciton with growth control ordinances. It’s like what Bertand Russell said about the one true religion: they can’t all be right.

  8. Tobias Jodter Avatar
    Tobias Jodter

    It’s simple. It’s too many people. Why should Loudoun County residents cheerfully increase their population by 183%? In whose interest is it to add 821,000 new households to the DC metro area?

  9. nova_middle_man Avatar

    humm I would argue what we have right now is three bordering counties with seperate and often diverging views of growth and development patterns

    Transportation is done at the state and regional level while zoning is done at the county level. These decisions should be made at the same level and hopefully some of the recent legislation passed will begin to accomplish this.

    As far as changing the county plan there should be some common standards say to go from R1 to R6 you need to plan for an additional lane of roadway for example.

    I had never seen the Loudoun county plan before Fairfax county specifies each parcel in the county instead of using general classifications like Loudoun. No wonder there is so much confusion.

  10. jujhpkjuhpkjh[pkij Avatar

    Tobias — So, if we do not want to allow population increase, how do we stop it? Walls at the MSA border? Also, do we tell existing businesses that under no circumstances are they to expand or otherwise do anything that would add addtional jobs? Do we by government fiat simply shut down the economy?

  11. Ray Hyde Avatar

    I know, why not let the Feds control zoning, transportation, job availability, housing allotments and the ability to have children.

    All our problems will be solved at one level, and we will have no reason to complain.

  12. tobias jodter Avatar
    tobias jodter

    So this is what it comes down to?

    I am a pro-business, life-long “Rush Limbaugh” Republican – never voted for a democrat in my entire life and yet I get my intelligence insulted for daring to raise what I feel are legitimate issues regarding the targeted overpopulation of the US.

    Is it possible that the demand for goods and services that are driving the expansion of businesses is partly a result of the increased number of immigrants requiring these goods and services? I take it no one here believes that immigration policies should be subject to government regulation?

  13. Anonymous Avatar

    What is the difference between Fairfax pushing its population overflow on Loudoun and the US pushing its overflow on Mexico and India?

    Wherever you push them, the existing people will complain.

    Yes, in fact, many American corporations now adverize on ethnic media in order to sell more goods to immigrants. I don’t think the issue is whether to have immigration procedures but whether to have ones that actually work.

    Would you rather have a bunch of low paid people here working for you, or overseas competing against you?

    Fairfax has one answer for the immigration problem and Loudoun has another. Fairfax has the Maquiladoras and Loudoun has the Haciendas.

  14. James Atticus Bowden Avatar
    James Atticus Bowden

    Tobias: The Federal Government doing their job on immigration won’t reduce the increasing supply and demand (more people – more housing) enough to really slow growth. How many illegals are in NoVa – good question for a separate blog entry.

    DC is Rome. It’ll be Rome for the rest of this century or more unless we exchange nukes with the Chinese (and have to rebuild) or surrender to the Islamists and retreat to ‘fortless’ America. The center of World Power will attract the people and money that are magnetically drawn to power. It’s going to keep growing, ceteris paribus.

  15. tobias jodter Avatar
    tobias jodter

    These little exchanges only serve to illustrate exactly what is wrong with the land use debate. Only the supply side can be considered. The demand side is not an option. The bottom line I come across all the time is what has been summarized here. “There is nothing that can be done about it” and “I don’t care”.

    And I’m not talking about just illegal immigration. I am also suggesting the amount of LEGAL immigration be reduced.

    When 1/3 of all new residents of Virginia are immigrants I would argue that slowing immigration would slow the increase in population growth.

  16. Toomanytaxes Avatar

    Whoever is elected president in 2008 simply will not spend the amount of money on government contracts for defense and homeland security that the Bush Administration is spending. Virginia is flush because of all of the government contracts given to companies in NoVA and, to some degree, Tidewater.

    Let’s face it, Virginia is dependent on federal government spending and other programs for a large amount of its prosperity. With the out-of-control spending at state and local governments and the never-ending quest for new and higher taxes, it might be a bit more difficult for the Old Dominion by the end of this decade.

  17. jujhpkjuhpkjh[pkij Avatar

    Tobias — Your initial comment seemed to refer to all newcomers, including American citizens moving into the area to take a new job, and it was to that reference that my toungue-in-cheek comments were directed. That stated, the reason people move to an area is economic. The notion that you can have economic progress but no newcomers just doesn’t compute. If you create a net number of new jobs (one of the upshots of economic growth), then you need folks to fill those jobs, and they generally want somewhere to live.

  18. Jim Bacon Avatar
    Jim Bacon

    John Dalton, you raise an interesting issue. It is true that economic growth and progress in the United States has been accompanied by population growth. But in theory there is no reason that this should necessarily be the case. Look at Japan. Japan has one of the lowest birth rates in the world. Indeed, were it not for the fact that the Japanese live so long, they would be losing population. Yet before the 1980s bubble-induced slump that they’re now coming out of, they had no trouble growing their economy at prodigious rates. The key is productivity, innovation and automation. In theory, any community of people can enjoy economic growth and prosperity by increasing the productivity of its workforce, the innovation of its technologies and business models, and automation of the most mundane and routinized tasks.

    Could that apply to Northern Virginia? I don’t see why not. We could well see a phenomenon like Silicon Valley in which only the most highly value-added jobs stay in the region, and other jobs are outsourced to satellite operations. That is, in fact, the very strategy that the Virginia Economic Development Partnership is urging — of course, they’re trying to get NoVa companies to outsource downstate.

    Hmmmm… Sounds like an idea that needs to be fleshed out in a full-length column.

  19. Jim Bacon Avatar
    Jim Bacon

    This correspondence comes by e-mail from Marcia de Garmo in Aldie, located just west of the proposed Greenvest project.

    As a Loudoun resident and someone who has been quite involved in Loudoun growth issues for a number of years, I thought your article was good but not as tough-minded as usual. There was a sense of wistfulness — you really seemed to like the pretty pictures Greenvest provided — and they are masters of sweet talk as well.

    To my mind, the best argument against the project is one the critics I talked to didn’t raise: Greenvest has not designed its South Dulles projects from the ground up with transportation-efficiency in mind.

    This sentence is absolutely fundamental, and this project needs to be looked at in context.

    – This Transition Area location in Loudoun could never (in the foreseeable future) be “transportation-efficient.” The location is the #1 problem with this.

    – You are not looking at the project in the context of the entire Washington region. The bulk of the population, and thus the bulk of the jobs, are going to continue to be inside the Beltway, or east of Dulles airport.

    – Jobs and commercial development. Your article touches lightly on the fact that Loudoun is already shockingly overzoned for commercial development. I actually heard an Office Park developer acknowledge, in public testimony, that Loudoun has a 175-year supply of already zoned office! But his project was going to be special, of course. Much of it is better located for access from existing communities in Loudoun or Fairfax. There is absolutely no good reason why this project would win out over other properties in attracting jobs.

    More context:

    – 37,000 houses have already been approved (as you note), many in this same area.(Loudoun currently has about 100,000 houses so the backlog is huge, and does not even include what could be built “by right” in the rural area or in the western towns.)

    – The Route 50 corridor, and connecting roadways are already overwhelmed

    – County residents are already overwhelmed with tax increases to pay for the overheated development that has been occurring.

    The Greenvest proffers would not come close to covering the costs of this massive development. As always, only capital costs are even talked about. The impact on operating budget would be staggering. The county has been straining to find, hire and pay for teachers and other service providers for the development that we already have and know is coming.

    The previous Board of Supervisors approved Moorefield Station (I thought prematurely), which is to be a lovely mixed-use development of a mere 6,500 or so units — BUT which at least is located around a future Metro stop, albeit the end of the line. As you know, no Metro or any equivalent is even in the dreaming stage for the Route 50 corridor. Greenvest would love to have you think that people will live, work and play there, but there will mainly be places to live. Even retail, by the county’s own study, has a theoretical (unbuilt) oversupply in the Dulles South area.

    I am not even addressing the other financial aspects, which Ed Gorski touched on in your article.

    I will, however, add one further comment on reality. There is considerable history in Loudoun and elsewhere of developers coming in with great-looking mixed use projects. The sweetener to the Supervisors is always the commercial/office portion, which is what makes the project look appealing from a fiscal standpoint. Then time goes by, and the non-viability of the commercial/office becomes clear (if it wasn’t to the developer all along), and they come back in for a re-rezoning to — RESIDENTIAL! The pretty pictures are just that — and they disappear, along with the dollars. And of course, they usually get their rezoning!

  20. Toomanytaxes Avatar

    What would Virginia look like if the General Assembly passed a law that required one quarter of all jobs (to pick a totally arbitrary number) located within NoVA to be performed by telecommuting? The law would permit businesses, nonprofits and government agencies to trade in telecommuting credits. For example, an entity with many positions that could be performed by telecommuters (let’s say 60%) to sell its excess credits (60%-25%=35%) on the market. Entities that needed or felt they needed more onsite workers could buy the credits.

    I fully recognize that there are a large number of practical problems with this straw proposal. Indeed, I could rip it to shreds myself. But there seems to be huge economic, technical, political, etc. problems with virtually everything else – building roads, building transit, Mixed Use, TOD, etc., etc., etc.

    Let those entities that can avoid having more than 75% of their employees commute to work sell their credits and those entities that cannot or do not want at least 25% of their employees telecommute buy credits. The latter could also move some of their jobs outside NoVA — more places, Ray.

    Have at it.

  21. Ray Hyde Avatar

    I’m not sure I understand how Marcia de Garmo figures she is over run with taxes.

    Loudoun County has the fastest growth and highest appreciation in the nation, or nearly so. To hear those who beat the drum about the costs of growth Loudon should have out landish taxes.

    Fairfax has the highest job growth and the highest ratio of jobs to homes in the area. Considering that jobs are said to subsidize housing Fairfax should have the lowest taxes, especially considering that much of its infrastructure is mature.

    Both counties have the same tax rate. And Arlington’s is similar.

    Fauquier is legendary across the nation for its anti-growth position, and success in preventing growth. Fauquier’s tax is slightly lowe than Loudoun and Fairfax, but they admit they set the rate artificially low and it will need t be raised before the next round of assessments.

    Prince William has the most aggressive road building program in the area, and one would think their taxes would be through the roof, but they are nearly the same as Fauquier.

    So what’s the story here? Is there really any connection between density and efficiency, between growth and maturity, between homes and jobs, or is it mostly a smoke screen and an excuse to try to prevent change?

    Marcia says she’s been active in grwth issues. I assume she hasn’t been promoting growth. Sure, there are sme homes n the market right now, but that does not mean there are excess homes: there are still plenty of people who want homes.

    What it means is the prices are too high. The way peple are fighting growth out there, you wuld think they associate it with poverty.

  22. Jim Bacon Avatar
    Jim Bacon

    Tobias, you asked, “I take it no one here believes that immigration policies should be subject to government regulation?”

    I agree with you that the United States needs to get a handle over illegal immigration. We have the weakest control over who enters our country of industrial or post-industrial nation-state on the planet. One can argue whether legal immigration is too strict or too lenient but, frankly, that’s outside the sphere of Bacon’s Rebellion. I leave the broad discussion of national-level debates to others, unless there are specific applications of those debates on a state or local level — such as the Herndon controversy over creating a hang-out for illegal day laborers.

  23. Ms. de Garmo’s comments on the Greenvest project in Loudoun County need some fine tuning–and full disclosure.

    Ms. de Garmo might have provided her frame of reference to the rest of Bacons Rebellion by telling all that she, is according to their website, in fact, a member of the Board of Directors of the Piedmont Environmental Council, a no growth group with no solutions to the problems facing Northern Virginia.

    To the point, consider several accepted facts:

    • Over the next 25 years COG forecasts over 180,000 new jobs, 311.000 new residents, and 110,000 new households in Loudoun County.

    • The Dulles South area of Loudoun County has existing traffic challenges, substandard dirt roads and failing levels of service–TODAY. There seems like sound consensus on this blog that Richmond and VDOT cannot and will not help– so Loudouners are and will be left to find their own solutions.

    • The by right pattern of growth is detested by planner and pundit alike: low density, large lot, sprawl development with no proffers is simply bad, ostrich-like planning. Moreover, it is fiscally irresponsible to continue to shift the tax burden for new by-right development to existing residents.

    • It’s by right development with no roads or parks or libraries or proffers that costs taxpayers money.

    • Housing in Northern Virginia is unaffordable, this we all acknowledge. The Greenvest proposal calls for almost 20% of it’s housing units to be below market, so our teachers and fire fighters can actually live in the communities they serve. Talk to any school administrator, the Sheriff, or employment placement agencies for local businesses and they will tell you that our teachers, deputies, fire and rescue personnel, etc. are forced to live in West Virginia, Maryland, Front Royal, Winchester, Warrenton, Culpepper, etc and commute to Loudoun and Fairfax in order to find affordable housing.

    Yes, these issues of growth and development in Northern Virginia are complex. At Greenvest we believe we offer a sound and contemplative alternative to unaffordable low density sprawl.

    Growth is coming, and Loudoun is squarely in its path. We embrace the opportunity to create “places” here, just two miles west of Northern Virginia’s economic engine — Dulles International Airport. Low density, large lot development should not be an option; likewise, neither should forcing all new residents to live in a high-rise condominiums above a metro stop (even if such development could be approved)!

    So unless we all rise up and vote to move the U.S Capitol to Omaha, or the governments of Fairfax, Loudoun, Prince William, adopt a moratorium on all new business expansion and job growth (surely, the PEC is not advocating this), we are left with the challenge of prosperity.

    We at Greenvest have offered one solution where growth does pay for itself. We welcome continued debate on the issues of today. More importantly, though, we would welcome a partnership approach with the County and the Commonwealth to responsibly grow the County.

    George McGregor is the Director of Community Planning for Greenvest L.C.

  24. Ray Hyde Avatar

    “It’s by right development with no roads or parks or libraries or proffers that costs taxpayers money.”


    I have been a frequent promoter of developers here. I think they are being charged unfairly because of false premises about what residential development “costs” the community.

    But your single statement may have changed my mind, at least as far as Greenvest is concerned. (You really should choose a different name, many people will consider it to be a snide insult to their intelligence. It is unbelievably bad PR.)

    My wife’s family has been here for multiple generations, paying taxes and supporting the community and church all that time. To say that after 300 years, it is we who are taking advantage of the new community that has sprouted around us is a crass and unfeeling insult.

    I’d like to build one (two at most) modest home(s), but I am forbidden because of misguided assumptions about what development costs. I can provide one or two homes for a fraction of the per home cost of your 28,000 home development, and with negligible local impacts. I can provide one or two affordable homes without wrecking the local economy, but I am prohibited.

    To have you say that “by right” development is the cause of the problem is a major insult. Particularly since my “by-rights” have been removed because the local government knows that you can afford to pay major proffers, and then pass the costs on to your high-dollar clients.

    I can’t afford to do that, but I can afford to provide modest housing to my Mother, and maybe my part-time farm hand. Eventually those would continue to be low income housing for the forseeable future. I can do that because I don’t have your overhead or proffers.

    Nor should I.

    I represent the alternative housing that can keep your prices honest. As Bacon would say, it is unjust regulation that is screwing up the market.

    On the other hand, if you provide the same service, the costs will be distributed to your other customers.

    I’m no fan of PEC, for exactly the reasons you mention, but if you keep this up, I’ll be no fan of yours, either.

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