Every Existing Chesterfield Resident
Wil Pay $5,300 to Subsidize Each of 18,300 New Homes. Yes, that's $97 Million
Dollars!
Volume 12, Number 9
Issue 557
Today marks only the second time in 557 issues of TaxFaxTM that a guest author has written a column. I feel so strongly about certain issues in Chesterfield County, Virginia that I have asked my great friend and client, David O. Webb to write some remarks about his thoughts about over development in our home county.
Thank you, David, for this opportunity to guest-author a column in your weekly newsletter to express my concerns regarding the negative financial impact that rapid residential growth is having on all of us who live in Chesterfield County.
Based on the County’s own Planning Department staff’s analysis, the current voluntary “proffer” system does not recover the full cost to build the necessary infrastructure. Thus, the financial impact of providing much of the infrastructure cost necessary to support growth (roads, schools, water and sewer, etc.) must be somehow paid for by all the residents of Chesterfield County. I would imagine that this would be through the issuance of bonds, an increase in the real estate tax rate or an increase of some other tax.
In its preliminary report of September 18, 2003 regarding Chesterfield County growth, the County’s Department of Planning noted that over 42,000 dwelling units could be built in the County on land already zoned for residential development.
As of October 2003, the Upper Swift Creek Area, which has had residential dwelling unit growth of greater than 65% in the past 10 years, had over 15,800 of these approved zoned lots. All of the very noteworthy and recently-approved cases just before the Board of Supervisors decided to finally agree to a one year deferral period of Agriculture to Residential rezoning added an additional 2,450 residential lots. This results in over 18,300 zoned residential lots already approved in the Upper Swift Creek Area.
To illustrate the financial impact, over 25% of these approved lots did not carry proffers because they were rezoned before the proffer system was put in place. Consider further that many of these zoned lots only carry a proffer of $7,800 per lot since they were approved before the current proffer maximum of $9,000 was approved in 2002.
A reasonable estimate of the average proffer that will be collected on these 18,300 residential lots is only $5,830 per lot. Contrast this average proffer to the Planning Staff estimate two years ago that the cost of a residential lot proffer to fully recover the County’s infrastructure cost would be $10,400 per lot. In the past two years, this amount would need to be increased to reflect increases in the cost of construction materials and labor. This would result in current actual cost of approximately $11,130 per lot.
The bottom line is a deficit of at least $5,300 per lot for each of the 18,300 zoned residential lots. This total infrastructure deficit of approximately $97,000,000 must eventually be either recovered from the citizens of Chesterfield County through higher taxes, which are already the highest of any county in central Virginia, or through financing by bonds -- otherwise a total breakdown in required infrastructure will occur.
It is my understanding, from the discussions at the Nov. 25, 2003 Board of Supervisors meeting, that the present real estate tax system primarily supports current operating costs for the County. New infrastructure costs must be financed from cash proffers and debt financing.
After the Upper Swift Creek Plan has been updated, open to public comments, and approved by the Board of Supervisors, all of us will have a much better platform on which to proceed with future requests for rezoning.
David O. Webb
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