A state Senate bill to replace proffers with impact fees has won approval from the Senate Finance Committee and now faces a vote in the full Senate.
As Chelyen Davis with the Free Lance-Star reports, the bill’s author, Sen. John Watkins, R-Powhatan, told the Senate Finance Committee that the proffer system is “out of hand, it is out of control.” Some localities charge proffers up to $40,000 per new house, which raises housing prices, makes homeownership less affordable, and artificially inflates real estate taxes.
Smart Growth groups have criticized the bill, which would cap the impact fees at $8,000 per house in Northern Virginia and $5,000 in the rest of the state, although it would extend to houses built under “by-right” development (not requiring rezoning), which currently are exempt from proffers. Such fees, they claim, don’t come close to the cost of covering the expense of roads, utilities and public services to new development.
And, according to Davis, it appears that Roger Wiley, with the Coalition of High Growth Communities, agrees. Said he: “The dollar caps in the bill are arbitrarily and artificially low. They are, make no mistake about it, designed to reduce the contribution of the development community. Give us some time. We aren’t rejecting the principle behind the bill. We’re willing to talk, as we’ve been doing already, to see if we can come up with some solutions to this problem.”
Davis reveals — as I had suspected but did not know for sure — that the Home Builders Association of Virginia not only backs the bill but helped Watkins write it.
The idea of treating all development, whether rezoned or by-right, on an equal footing strikes me as reasonable. Of course, while large developers, who frequently seek rezonings, will favor the idea, small developers, who tend to build on by-right lots that don’t require zoning, will oppose it. Still, I see that aspect of the bill as a positive because scattered, by-right development is the mortal enemy of efficient human settlement patterns.
The problem with the Watkins bill is that the impact fees are ludicrously low. Compounding that deficiency is the fact that a two-sizes-fit-all system will not work. The cost of extending infrastructure and services varies considerably from county to county, and each jurisdiction may seek a different balance between charging newcomers vs. existing residents for the cost of providing that infrastructure.
If the Watkins bill opens up a broader conversation on the reform of proffers and impact fees, it will serve a useful purpose. If it gets signed into law as is, it will be a travesty.
Update: “The Loudoun County Board of Supervisors voted unanimously Tuesday to “strongly oppose” a Senate bill that would require the proffer system to be replaced with a system of impact fees,” reports Leesburg Today. Chairman Scott K. York called the bill the “anti-taxpayer bill” that would “completely obliterate what we have worked through for 30 years with respect to the proffer system” with about “30 minutes of work.”
