Crozet’s growth pattern

Posted on July 2, 2006 by Jim Duncan

Will Albemarle County listen to the people who signed a petition asking for a population cap?

Lots of questions to be answered at Wednesday’s County hearing at 11:00.

I am dying to see Old Trail’s promised affordable housing:

“We do embrace affordability,” Beights said. He said affordable housing fitting the county’s current definition could start in the $180,000 price range and move up well over $200,000

Will Crozet have 12,000 or 24,000 residents? By what metric of prediction?

Crozet Table

This will prove an interesting exercise in integrity, politics, whether the elected officials listen to their constituents and whether much can be done to prevent growth.

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About Jim Duncan

A Charlottesville Realtor who tries to stay on the bleeding/cutting/functional edge of technology and real estate trends. I have been selling real estate for the past 10 years, lived in C'Ville for twenty+ and am married to one of few Charlottesville natives left.
This entry was posted in Albemarle, Charlottesville, General Real Estate, Growth, Politics. Bookmark the permalink.
  • TrvlnMn

    This will prove an interesting exercise in integrity, politics, whether the elected officials listen to their constituents and whether much can be done to prevent growth.

    I thought it had already been proven that the BoS elected officials, “listen to their constituents” and then turn around and do what they originally wanted to do in the first place. Didn’t the BoS set up a “gripe” board a while back to insulate them from having to listen to every complaint personally?

    And is 180k to 200k really what’s supposed to pass for affordable housing here in Cville?

    Knowing these developers they will probably be something like a 1 bedroom plus den. And you can get that in Southern CA for 200k.

    I guess in order to have affordable housing you might need to have all the big developments (Old trail, Albemarle Place, Biscuit Run, and whatever’s happening up north 29) dump on the market all at the same time. Then you might see some affordable housing. Maybe.

  • Ray Hyde

    Travln Man is right. You cannot have growth restrictions AND affodable housing. You probably cannot even have building codes (as they exist now) and affordable housing.

    It is too bad NOVA didn’t havea growth or population cap 20 years ago. Why not spread the wealth around? while you are at it, throw in a jobs cap, which is the real problem, in my opinion.

    I wonder how many of those that signed the growth cap restition petition have more than one child? A builder once put it to me succinctly, “I’m a businessman”, he said, “If you get your childrent to stop fornicating, then I’ll stop building houses.”

    Travl’n Man: I enjoy your posts and the way you think, even though we sometimes disagree. I hope we can have a beer together some day.

  • cvl

    Fingers should not be pointed at the BOS for this area’s affordable housing problem, nor should regulations be blamed. There are thousands, in fact well over 10,000, housing units already approved, or about to be approved within the county’s designated growth area. Why they aren’t being built faster and offered at more affordable prices is a question for developers.

  • TrvlnMn

    I forgot to add this in my last post…

    Jim wrote:

    Will Albemarle County listen to the people who signed a petition asking for a population cap?

    From the D.P. story:

    At the conclusion of that meeting, the supervisors discussed ways to better convey the county’s point of view to Crozet residents, and appeared to jointly agree that the plan was clearly set with a 20-year view in mind.

    Translation: (The BoS to Crozet residents)- “You see you simply don’t understand, this will happen the way we want it to happen.”

    As if there is a failure to understand, on behalf of the Crozet residents, that the Development is and will be going in the way the BoS wants it to and finding other ways to deliver that message to residents will simply solve the problem.

    Cvl wrote:

    Why they aren’t being built faster and offered at more affordable prices is a question for developers.

    The pricing issue is obvious- they want the profit (and that’s a bigger profit if they’re using illegal labor to build it).

    As to the speed of the building, it’s probably related to their ability to “pre-sell” as many of the units as possible before they actually begin to build the units. Which is also why allowing all the developments to dump on the market at the same time would never result in more affordable housing. The developer would presell the units before begining construction. So there wouldn’t really be the market competition that one would hope to gain by having them all selling at the same time.

  • http://www.realcentralva.com Jim Duncan

    cvl –

    I disagree with that assumption. Take for example today’s discussion about the Glen Oaks development. This development has taken years to get to where it is (deferred again). What has happened to the real estate market and construction costs over the past several years?

    The FEF has a good report on the impact of an inefficient process and over-burdensome regulations on housing prices. Harvard has a similar (pdf) study.

    So, yes, an overly cumbersome regulatory process does in fact affect housing prices. The BOS does share a great deal of that responsibility.

  • cvl

    jim
    I’m not buyin’ it. The County BOS has recently approved thousands of housing units in the growth area, which simply aren’t being built. What more can they do? Should they just allow Glen Oaks type development- i.e. questionable water resources, on steep slopes, not in the growth area- all over the county. I’ve read the FEF report and don’t buy it….FEF is funded by realtors and developers, so their conslusions are no surprise.

  • http://www.realcentralva.com Jim Duncan

    I can understand your perspective about the FEF. I don’t agree, but that’s fine.

    My logic tells me that if a process takes 5 plus years to get approval rather than 18 or 24 months, costs – construction, regulatory, labor, legal – will rise. That $200k house may now cost $350k.

    The County BoS needs to make the approval process more efficient. Encourage growth in the Growth area, rather than push by-right development into the rural area.

    If our area can grow reasonably in the areas we want to grow (and in my perfect world, have sufficient infrastructure and even mass transit … *sigh*) then we will all win.

    Unreasonable delays and silly “affordability regulations” serve only to deter smart growth not “smart growth” and push development outside of the urban core/ring. Government cannot legislate affordability, but it can help to discourage that affordability.

  • cvl

    Jim
    I agree with you about the general goal…keep growth in the growth area and protect the rural areas. I also agree with you that county approval delays do raise the cost of housing, and there are undoubtedly multiple examples of this. However, this can’t be the major culprit, if over 5,000 houses have recently been approved. That’s a hell of a lot of houses…

    Also, “affordability regulations” are anything but silly. Do you really trust developers to voluntarily price a portion of their “product” affordably? They haven’t done this in the past, so why would they now? Do you really buy the FEF’s rediculous logic that requiring 15% of new homes be affordable causes the other 85% of new homes to be unaffordable. I got a good chuckle when I read that….honestly, have you ever heard of a developer having a hard time affording a new house. How much proffit is enough?

  • http://www.freeenterpriseforum.org Neil Williamson

    cvl – This is Neil Williamson, I serve as Executive Director of the Free Enterprise Forum.

    I sincerely appreciate your thoughtful posts on growth and development.

    To Jim point regarding delays being costly: The Daily Progress reported last month regarding the UVA South Lawn Project “Part of the rush is an estimated 1 percent increase in construction costs each month, which translates to more than $1 million a month for South Lawn.”

    FYI, my quote regarding the affordability was “mandating 15% affordability will make 85% of the new homes less affordable”.

    I believe the heart of your disagreement regarding the affordability question is your underlying belief that developers make too much profit.

    IMHO, our free enterprise system dictates that those who create product, price it where the market will bear. If any company provides an equivilent product or service at a better price, the company seeking too high a profit will see a reduction in sales and perhaps the end of their business.

    Land use is a difficult economic subject as there is clearly a limited supply.

    What about a non land use example: If you have a production run of 1,000 widgets and it costs you $100 to produce each widget(including a modest profit) and then the government tells you you must sell 15% of your product at $85.00, what would you sell the balance of your widgets for? Would you eat the loss (and loss of profit) on the 15% or would you attempt to price the widgets in a way that recoup those new “operating” costs?

    If the market will bear, I suggest the price of 85% of the widgets would increase to accomodate this new reality.

    What of the buyer of the 15% (below pre government intervention) market rate widget? Thanks to government intervention the market price for widgets has increased dramtically. If he sells his widget on e-bay, he can reap a large windfall. This is why the Free Enterprise Forum has used the term lottery winners for those who recieve the affordable units.

    While this example is oversimplified I believe the affordability issue is much better served by focusing on helping the buyer rather than subsidizing the product.

    Finally, I believe a close read of the “Locked Out” report will show that we ask if the cost of regulations being put into place in the region are worth the benefits being achieved. Government regulations are but one part of the increasing housing costs but it is the only variable government should control in a free market economy.

    Thank you for your participation in this important dialog. While I may not agree with you, I believe the discussion is helpful for the community.

    Anyone interested in more information about the Free Enterprise Forum can visit our website http://www.freeenterpriseforum.org

    Neil Williamson

  • cvl

    The widget analogy is, as you offer, a gross overgeneralization, and has no place in this discussion. Why? Because in your example a “widget” is a “widget” whereas houses and apartments come in all shapes and sizes. That the builders have isolated the affordable housing argument to include ONLY single-family detached housing—that is, a monotype “widget”–is but another of the fabrications used to exploit the issue by the builders. If all homes were exactly the same; then the widget argument might be plausible.

    Builders claim delays cause cost increases and if allowed, they could glut the market and drive down prices. Are we to believe that the widget maker would voluntarily glut the market so as to artificially reduce prices? Hardly. Economics 101 taught us all that in a area of high demand, prices increase with reduced supply. No one begrudges the builder for making a dime or 10,000 dimes; we are all good capitalists. But when the builders starts moaning that they’d gladly sell homes [or widgets] for less–“if only the local government would let them”—then it’s entirely appropriate for the “rest of us” to question the profit margins.

    Let’s look at the FEF’s statement: “our free enterprise system dictates that those who create a product, price it where the market will bear.” Therefore, we can deduce that regardless of the “cost” of a product, the seller will price the product as high as possible. For example, if a home costs $250,000 to build including land, carrying costs, realtor commissions, and even extra costs due to regulatory delays, that home will sell for whatever the market will pay for it; regardless of the cost. If the market will pay $450,000 for that home, the profit margin is approximately $200,000. If the market will only pay $255,000, this reduced profit margin will hardly enthuse many builders to build these units. However, if the costs drop but the market stays strong, the price will remain where it is. It requires an extraordinary level of naivete to accept the notion that were the cost of these $450,000 homes dropped by $50,000 the seller would out of sheer benevolence reduce the selling price accordingly. Yet this is exactly the notion forwarded by the FEF and others. If local government makes homes cost less to build, we will sell them at a cheaper price…..yehhhh right.

  • Betty G.

    As of 7/10/06, the only approved rezonings under the Crozet Master Plan are: Old Trail, Wickham Pond and Liberty Hall. Everything else recently built in Crozet was “by right” under existing zoning.

    The “by right” portion of Old Trail is currently being built. These by right neighborhoods (most recent is Westhall) do not have to go through the BOS for approval/review as consistent with the Crozet Master Plan and thus do not add to the infrastructure, contribute proffers or include affordable housing. If rezoning as consistent with the Master Plan continues to be an onerous process, the most likely result is more by right typical suburbia and thus the end of the Crozet Master plan.