Stonehaven Development and “Getting” a High School

Several days ago Planning Office Director Chris Price presented the recommendation for development of the Stonehaven property in the Gainesville / Bristow area.  The proposal from county staff was to reduce the amount of land in that parcel that was to be dedicated to employment centers and increase the number of houses to be built there from about 1200 to 2000.  During the presentation it was implied that this would be a good thing for area residents as we’d “get” a much needed high school that would relieve overcrowding at Patriot and Battlefield high schools.

This folks, is malarkey.

First, we county residents won’t be getting anything.  Under state law developers are required to provide land or cash when they want to build in Virginia to compensate residents for the cost of providing infrastructure to support that development (like schools, roads, sewer, police, and fire and rescue).  How much they have to provide, called a proffer, is set by the county or jurisdiction; in PWC the proffer amounts are set by the PWC BOCS.

So, with the Stonehaven development, county residents won’t be getting anything they aren’t legally entitled to receive and the developer isn’t legally obligated to provide.

Second, we won’t be getting a school. What we might receive as a proffer, if the development is approved, is land for a school site.  The school division would have purchased land in the west end whether Stonehaven was approved or not, so having a site for a high school isn’t dependent on Stonehaven being approved.  We’ll be paying for it anyway as the value of the land will be deducted from the total cash proffers the developer is required by law to provide.  In fact, as the zoning for the land will be changed from Agricultural to Residential, the value of the land will increase, and the amount that is deducted from the cash proffers will increase as well.

As a CPA I’ve always gotten a kick out of that one – get the BOCS to approve a zoning change which will increase the value of the land and then take the increased value of the land as your proffer.   Better yet, take less than the acreage needed for a high school that has power lines and a couple of streams running through it that are designated Resource Protection Areas and can’t be built on or will require extensive and expensive wetlands remediation before construction can begin, and dump it on county taxpayers as a school site proffer with no reduction in value due to the amount / cost of work that will be necessary to prepare the site for a school.  Of course, that can’t be confirmed until detailed plans are provided and so far all we’ve gotten is general plans without sites, power lines, or RPA areas specifically delineated.

Third, the western end of the county needs a new high school due to overcrowding at Patriot and Battlefield right now.  Adding 2000 more houses and the children that will move or be born into them will add roughly enough children to fill an elementary school, and almost fill a middle school and a high school.  All we’ll be getting is a site for a school, and not necessarily a high school as a high school requires 80 – 90 acres and the proffer reportedly provides 60 acres.  I find it difficult to call those 2000 additional houses a plus when I realize that with them added into the mix, we’ll need another elementary school, middle school, and high school – that’s $175 million in current construction dollars.

Fourth, the amount we’ll be receiving as a proffer is a lot less than what we should be receiving.

Ever wonder why PWC is so deeply in the hole, why all these houses keep getting built here but no businesses, why we don’t have the cash to build schools when we need them, why we have no parks, and why we may have to face the possibility of a high school that’s more than 1000 students overcapacity sitting beside another high school that more than 500 students over capacity?

It makes no sense for us to be in such a bad position.  We’re one of the wealthiest counties in the country.  Our unemployment rate is well below national and state averages.  We’ve been building schools left and right.  Our property tax rates are among the highest in the area.  Housing development for the past 4 years has been stagnant.  Yet our classes are the largest in the state by a significant margin, our teachers are among the lowest paid, and we have the most overcrowded schools in the state.  It makes no sense.  Until you start looking for answers, and one answer comes from the proffers we expect from developers.

As I stated previously, proffers are money developers are required by law to provide to municipalities for infrastructure improvements the development will require – things like roads, fire and rescue, schools, etc.  Looking at the proffers required by Prince William, Stafford, Fauquier, and Loudoun tells you exactly why the hole we’re in keeps getting deeper, why we have no money to build schools, and why we keep getting houses instead of businesses and jobs.

This chart, PROFFERS, contains the proffers required by Fauquier, Stafford, Loudoun, and Prince William.  It’s a pdf, so you have to clink on it to see it.

Prince William County has the lowest proffers.  For schools, for a single family home we’re over $4,000 lower than Stafford, $7,000 lower than Fauquier, and almost $19,000 lower than Loudoun – and that’s against Loudoun’s lowest costing region. And that underage isn’t being tossed into transportation or other government services.

Fauquier estimates transportation costs on a site by site basis, so we can’t compare transportation proffers there.  But the single family home proffers Fauquier requires for other government services, like police, fire, and rescue or parks and libraries, are almost $2,000 more than PWC requires.

Stafford’s proffers for transportation are about $3,500 less than ours, but their other government services proffers are about $2,000 more, primarily for parks. Combined together, Stafford’s total proffers, including schools, transportation, and other government services, are nearly $2,500 more than Prince William’s for a single family home.

Loudoun’s total proffers, including schools, transportation, and other government services, are roughly $12,000 more than Prince William’s for a single family home.

It’s the same for single family attached homes, like town homes. The only area where Prince William comes close to Fauquier, Stafford, or Loudoun is with multi-family homes.

So what happens when proffers go up?  That cost is passed on to new home buyers and increases the price they have to pay for homes.  Builders and realtors will tell you that the increase in price sends buyers running away in droves, except it hasn’t reduced demand or construction in Loudoun, Fauquier, or Stafford.

In fact, what it has done is create the situation we find ourselves in right now.

Increased proffers caused housing prices to go up in Loudoun, so builders began building more expensive homes in Loudoun.  More expensive homes have higher tax assessed values and result in higher property taxes.  That means more tax revenue coming into the county and more money to build schools and provide parks.   It also means more affluent families moving into the community, so you get more shops and more jobs, and while it pains me to say this, lower education costs as affluent kids don’t generally need the additional support financially challenged kids need.

It means you end up with more and more houses in Prince William, when what we really need are businesses to provide is with the tax revenue to support government operations.  At roughly $12,000 less per house in Prince William, 800 houses are roughly $9.6 million less in Prince William than Loudoun; 2000 homes are roughly $24 million less. If you have a set amount you can spend on development, are you going to build 2000 houses in Prince William or Loudoun?  If you can change the land designation from office to homes and build 800 more homes in Prince William which will cost you $9.6 million less than it would to build those same houses in Loudoun, wouldn’t you push to build the houses in Prince William?

You may think this is a good thing.  It may be houses, but we still get the development and tax revenue.  Unfortunately, houses cost more than businesses from an infrastructure and government services standpoint.  Businesses don’t need schools.  Businesses don’t need sidewalks,  Businesses don’t need libraries.  Businesses don’t need parks.  Businesses bring us jobs, sales tax revenue from goods sold to them, property tax revenue from their building, and demand less infrastructure and government services than houses.

Houses, and the people who live in them, need schools, sidewalks, libraries, and parks; and schools are tremendously expensive to build and operate.  A high school, with current construction prices, is about $100 million.  The cost to operate a high school for one year – just the school – is roughly $16 million, and that excludes transportation and administration costs.  All the developers proffer is the land for a school site; the rest of the cost is on county taxpayers.

Just bringing our proffers up to regional norms won’t bring us the business base we need. Attracting businesses to Prince William instead of Loudoun and Stafford will take a huge effort that has little to do with housing proffers.

But the proffers we require from developers are not reasonable.  Being lower than Loudoun is one thing, but being so much lower than Fauquier and Stafford is mind boggling.  Digging ourselves out of the hole we’ve created starts by having proffers that are reasonable and reflect regional norms.  It also starts with county staff being honest and not promising that county taxpayers will be “getting” things developers are legally obligated to provide and aren’t dependent on the development in question being approved.