Thursday, January 26, 2006

Loudoun's Extreme Makeover

Back again to Loudoun County with a Weldon Cooper Center report estimating population there grew 49 percent since the 2000 census. The Washington Post has the story, about growth in Loudoun and other counties (here's the chart.) In fact Northern Virginia's growth accounted for 60 percent of the state's overall increase of about 500,000 people.

It's worth looking at the chart to see the raw numbers, and get a sense of how much faster Loudoun is growing than other parts of the state - Hampton Roads' growth, for example, looks tame by comparison.

It wouldn't be surprising if the county matched this rate of growth when the 2010 census comes along. There's really nothing like it.
'In the past 15 years, the county has doubled the number of schools and more than tripled the number of students, to about 47,000 this year. Six more schools are scheduled to open for the 2007-08 school year.
Scott York, chairman of Loudoun's Board of Supervisors, cautioned that the surge in population means that county leaders need to rethink whether they want to continue on the same path.
"What it means is that our roads are going to get further clogged, we'll continue building schools, and it will mean higher taxes," he said. "That's why we need a change of attitude from board members and need to start doing more with smart-growth policies as opposed to no-developer-left-behind policies."'


At 9:27 AM, Blogger Toomanytaxes said...

Watch real estate taxes skyrocket even further in Loudoun over time. Not only does the county need to build infrastructure, but demand for other services not today provided or provided at much lower levels than Fairfax County, for example, will also increase dramatically.

While one can reasonably argue that Fairfax County spends too much because it tries to be all things to all people, Loudoun County still provides many government services at levels more commonly found in Virginia's non-urban counties.

Loudoun has been able to devote more than 60% of its budget to public schools, whereas, Fairfax County spends around 52-53% of its revenues on public schools. Assuming, for the moment, the reasonableness of these levels of school spending, as demand for other services increase, Loudoun's school spending as a percentage of total spending will need to move towards Fairfax County's. I suspect that budget battles, both over spending priorities and taxes, will become much uglier in Loudoun County.

The "property" rights battle between those who already live in the county and those who want to build more should also escalate.

At 10:23 AM, Blogger Ray Hyde said...

All those kids are already in school. Where does smart-growth say they are going to live?

Someplace else.

TMT is right, we are busy tying land use to transportation, but the big enchilada is schools.

TMT is right again: the proprty rights battle will escalate. Right now it is between those that already live(recently moved) to Loudoun and those that want to build. But those that want to buy and find they cannot are likey to weigh in eventually.

We can't argue about the costs of growth without considering the costs of no-growth, and that argument has barely floated to the surface.

At 3:56 PM, Blogger Ray Hyde said...

Suppose you own a lot, and you are sitting on it watching the real estate taxes skyrocket. You are also watching the equity in your neighbor's homes skyrocket. the value of you lot may be going up, but not as much as if it had a home on it. You might be able to rent the lot, but not for as much as if it had a home on it. You can sell it, but not for as much as if it had a home on it.

If you do sell it without a home on it, then the new owner is facing the exact same situation you are now. Someone is going to own that land, and they are going to expect to use it, or get something out of it. Getting something out of it is not the governments problem, but allowing some kind of use for it is.

Where is the incentive to keep that lot empty? Those who already live in the county and don't want growth need to do something besides not want growth.

The guy that owns that lot is working (somewhere) for the lot. If the lot is held out of development for his neighbors benefit, then he is working for them.

If they want their undeveloped neighbor to work for them, then they need to provide a paycheck.

At 9:52 PM, Blogger Ray Hyde said...

The wealth represented by homes in Loudoun county grew by over 7.5 billion dollars. Compared to that the taxes are peanuts.

Would you really prefer to have, or do you really think the county would be better off with 500 or 1000 bankrupt farms?

At 10:39 PM, Blogger Toomanytaxes said...

I think that some of the conclusions start breaking down when one moves from a summary level to individuals. The value of homes in Loudoun County, as with other places, has indeed skyrocketed. Some people, especially ones who may have moved from Loudoun to a less expensive area of the state or country or who have downsized their home may well have benefited significantly, especially if they had purchased their homes years ago. But for many who remain in their homes and do not wish to, or cannot sell, their homes at this time may jhave been hurt by the rise in real estate taxes. The increase in their homes' values gives no immediate benefit.

Also, since more than 37% of the new mortgages in the DC area last year were interest only loans, some of that wealth may have been generated only because banks would finance such loans. In other words, but for the ability of many buyers to pay interest-only loans, many houses would not have sold for their high prices. Could the market take back some of that value if interest rates continue to climb and more people cannot afford to buy new houses or even the ones that they already purchased? What happens to local government & taxes in the event that housing prices were to decline by 10 or 20%? That may or may not happen.

A person sitting on undeveloped land certainly provides some value to his or her neighbors. The Evans Farm Inn, with its acres of open space, provided a great benefit to the citizens of McLean and Fairfax County. But taxes overwhelmed the owner and he finally sold for development. He could simply maintain his open space subsidy for his neighbors.

Om the other hand, the landowner who develops land where the infrastructure is inadequate passes along a big hit to the neighbors who often suffer crowded conditions and higher taxes to construct public facilities necessary to support the new residents.

I suppose one way to address this problem would be for some type of payment to flow from residents of a community who do not own large, open lots to those in the community who do, but with provisions for recapturing those payments upon the sale of such property, along with the payment of appropriate infrastructure costs. I suspect, however, that such a rule would provide strong incentives for non-development of land. It might cause development to move to areas with low infrastructure costs. It could be the means to develop "more theres."

At 6:36 AM, Blogger Bob Burke said...

Again, the no-growth argument. It's not on the table, naturally, but it's a lovely target for those who don't want to talk about the real issue, which is the pattern and density of growth.

At 8:29 AM, Blogger Toomanytaxes said...

Bob Burke, you are, of course, correct that there will be more growth in Virginia. However, you might have found a meeting held by the Fairfax County planning department last evening to be interesting. The meeting, part of a series of sessions to obtain input from citizens and interest groups on the future of Tysons Corner, was held in McLean. It was attended by 75-90 people, plus or minus. (I'm not adept at crowd estimation.)

The basic question from the county was: What should the county do with development at Tysons Corner? The virtually unanimous answer was nothing unless and until traffic and other infrastructure-related problems are fixed first. There were a variety of opinions on other issues: Metrorail, parks, mass transit, parking, sprawl, density, smart growth. However, the basic message was Tysons Corner and the rest of Fairfax County has already been developed well beyond the capacity of its public infrastructure and that any plan to add more density to Tysons must await the construction of sufficient infrastructure to support both today and whatever is built tomorrow.

For example, one of the citizen proposals was to prohibit any amendments to the Comprehensive Plan or rezoning request unless and until nearby road conditions are improved to no worse than a "D" level of service during rush hour, the perception being LOS is generally an "F" today. Other major concerns were schools, higher proffers/impact fees and, of course, legislation requiring adequate public facilities ordinances. (I essentially sat in a corner and observed.)

I have no evidence that this group of people were or were not representative of the community. I suspect, however, that the views are more likely common than not.

While 2007 is a long way in the future, I suspect that perceived over-development and its affects will be the major election issue in NoVA that year. I also perceive that the incumbents of both parties are strongly viewed as enablers of over-development.

At 8:36 AM, Blogger Ray Hyde said...

I agree with both of you, but I don't hear any real alternatives that are any less unfair or less idiotic than what we are doing now.

The landowner is stuck with land that is useless to him, but "valuable" to those who want to preserve open space, and to those who want a home. As far as I can figure out, most of those who want to preserve open space also have a home.

Those 80+ thousand people living in Loudoun would have to be living someplace, and they would create pretty much the same need for infrastructure anywhere. Same piza deliveries, same schools, same travel (I know you don't believe that, and I'll concede we can do marginally better, but not much, and probably at an enormous cost.)

In Loudoun, there are so many new people that one could argue that the high taxes only mean that they are, in fact, paying for their own new infrastructure. For those that sold out to make the space for newcomers, you can't feel sorry for them either. That leaves the ones who came early and stayed, and are now suffering buyers remorse because they were unable to stop time.

What they want is the ability to control land they don't own. They argue that one of their "bundle of sticks" is being taken away. But it is not a stick they ever had, and the law says they have no beef unless substantially all of their bundle is taken away. They are arguing a position that is not supported, and if it was it would support the landowners as much as it supports them.

If we are to plan for better developments it is going to mean drawing lines where development occurs and where it doesn't. That means we are renting the land we don't use to hold it for other purposes. It is a transfer of wealth with no benefit (or only a small one) to those that get left out.

TMT is right. It is a balance of property rights issue and right now it is out of balance in both directions.

Once we resolve a fair method of dividing and using the land, and a fair method for paying for new infrastructure (which benefits us all, whether we believe it or not), then we still have to come up with a means to control, define, create, and build those balanced communities.

We don't have any policy or procedure to do that. As Bacon points out, the policies and procedues we have, which are what we thought we wanted, are what created the mess we are in now.

The mess we are in now is in a constant state of flux as people re-adjust to new realities, and make "better choices". By the time we know enough to make new policies and gradually begin to get them implemented, the situation will have changed again.

We might think we know enough to make better decisions, but there is no real evidence that we do. When I see a plan that might work, I'll stop arguing and sign up.

So far, I believe what you are suggesting will mean more taxes, not less, and I see no evidence anywhere that balanced communities are likely to happen.

At 6:59 PM, Blogger Toomanytaxes said...

Does higher government spending cause local governments to promote development in the quest for more cash flow, or does development cause more public spending? Or both? But which is the chicken and which is the egg?

Fairfax County would have grown with or without high growth rates in local government spending. But elected officials seem to promote more development with the hopes that it will increase cash flow quickly and that the populace will tolerate the overstressed infrastructure longer than it (or more accurately, interest groups) will tolerate no growth in programs. In other words, had Fairfax County's supervisors restrained spending regularly to some level that approximated the combined increases in population and inflation, might it had less need to promote the very development that it choking the county today. The county might still be overcrowded and overtaxed, but less so.

Look at school spending for example. We all want good schools. Fairfax County has increased school spending as a percentage of total spending from 49% in 1995 to 53% this year. For the same years, the budget went from $725 M to $1.43 B. According to Gerry Connolly, the supervisors have increased its funding of schools by 6.57% ($82 M) in 2004 and 8.24% ($109 M) in 2005. This comes despite enrollment that has been flat or even down slightly. (To be fair, while enrollment is flat overall, there has been substantial increases in students in parts of the county, which has, in turn, caused a need for increased classrooms in those locations.)

FCPS has also increased some of its programs substantially. It spends, for example, more money on special education programs than it does on either the entire middle school (7th & 8th grades) and the entire high school (9th-12th grades)programs. Indeed, Fairfax County with 14% of Virginia's students spent 20% of all special education funds expended in the Commonwealth during 2004.

Meanwhile, the county has not remodeled many of its schools since they were built during the 1960s.

Clearly, we have the case where spending on some programs greatly exceed requirements, coupled with a deteriorated infrastructure and a major need for substantial new revenues each year. We also have cases (anecdotal, but cases nonetheless) of families moving from around the country and around the world to take advantage of FCPS' special education programs.

What if Fairfax County officials had placed reasonable controls on its spending for expensive programs? Suppose instead of spending 20% of all Virginia special education funds in 2004, Fairfax County would have spent only 15 or 16% of those funds. Would the seemingly suicidal quest for development and added cash have been less?

I'm not sure about this one myself, but I'm not persuaded that the continuing failure of local governments to impose reasonable spending controls would not have resulted in slightly less development and its related problems.

At 12:32 AM, Blogger Ray Hyde said...

TMT: I've said before that I admire your arguments. I don't know the answer either.

I suspect that any quest to limit development is doomed to fail: those people are going to happen anyway. We are faced with putting them all in one place or creating more places, or spreading out all over creation.

EMR points out that if we don't have sustainable urban areas, then we are screwed. I don't think we have any sustainable areas, and one day we are going to be screwed. In the meantime .....

I own property in Fairfax, and I know exactly how you feel: I just got my next mortgage statement showing another $100 a month for taxes. I haven't got a raise of that magnitude, so something is going to have to give.

My situation at the farm is exactly what you described at Evan's Farm Inn.

I have argued that if open space is the issue, we are going to have to pay for it, or it will go away. Right now, the mob mentality is that as Arthur Arrington said, "We have to put our foot down" and preserve our county.

I have also argued that simply buying open space for public use will be a lot cheaper than paying incentives to renovate our cities.

But you point out that adding development in Fairfax raises the cost for existing residents who don't benefit. I agree. I get nothing out of new development or new infrastructure there.

On the one hand, if landowners can't develop, they have no options, none, and they are going to get hammered. On the other hand, under current rules, wherever development does occur, existing residents take a hit, and there is nothing they can do about it either.

Which is worse, one person getting hmmered or a hundred people getting tapped? I don't know, and I've got one shoe on each foot. I'm getting hammered and tapped.

I would never suggest that it is fair that I get paid for the full cost of what I am currently prevented from gaining. But I don't think that 7% of what the county claims I'm saving them is too much to ask. As I see it, they are renting those savings from me.

This is still a forign idea, here, but it is becoming less so. Last year a prominent environmentalist published an article entitled, "Don't Zone the Scenery, Buy It." Oregon, has had strng land use laws for years, and they are moving in that direction, with five other states set to follow. New Zealand already compensates landowners for services, and so does New York.

Last week a woman suggested in the Fauquier paper that citizens should donate 40 hours a year to preserving open space, and this week another man wrote in to say he would sign up. If I had ten people donating 40 hours a year, I'd shut up about development rights, because I would feel that at last the community was actually supporting the farms, not loving them to death.

Every time I see one of those "we have to save our prime farmland sentiments, I think, fine, just show up one Saturday and try to keep up with me for a day. Now that might actually happen. I'll take it.

That still doesn't solve the problem you describe, and probably makes it worse. Because if I don't have to sell out, more people will wind up inside R15, maybe, or else outside R70.

If those people at the Tyson's meeting have their way, nothing will be built until infrastructure catches up. But with no new people to sare the costs, won't their burden be higher than ever?

Is some of the problem just bad planning? Did we fail to do what was needed in a timely manner? Are we misreading entirely the benefits and costs?

Is it a function of time, more than space? It is easy to sit here and poke holes in everybody else's ideas. It is not so easy to come up with a unified field theory for social and economic interactions.

Because of my unusual position, I'll concede I'm totally conflicted on the issues we discuss here.

I do think that growth management, traffic demand management, and economic management are all lies. Temporary re-direction, maybe.

A Fauquier Supervisor once told me that if I didn't like the rules here, I should get out. He is gone now, and I'm still here. I guess he took his own advice, and I guess the option is still open.

Until no-growth is ubiquitous.

That temporary thing is a real killer, because the way the government works, we may be dead before it figures out there is a problem.

At 11:00 PM, Blogger Ray Hyde said...

Victor, Idaho, has seen its population triple over the past 15 years. The Idaho Falls Post-Register said the rapid pace of growth forced the the town's city council to put a moratorium on development to give planners a chance to catch their breath.

The town's planning have been overwhelmed with short-term decisions on growth that they haven't had time to address long-term planning.

Victor joins other towns and local governments in the West that have turned to a moratorium on growth.

The population of Victor is 1,216.

At 11:52 AM, Blogger Toomanytaxes said...

I would suspect that infrastructure in Victor, ID is a bit thin; "lots" of people were moving to Victor to escape development in larger areas; current residents, including those who recently moved to Victor, felt their quality of life was decreasing; and property taxes were rising faster than incomes.

The existing social contract governing development is broken, but we have no idea how to rewrite it in a fair manner. Virginia's problem is that too many elected officials don't understand or admit that the contract is broken and that we need to find something that better addresses our current situation and also will provide an acceptable level of fairness for all interests.

At 7:04 PM, Blogger Ray Hyde said...

I just brought it up because I thought it was cute and because it shows how different people's ideas of too much growth, or too crowded are.

Still, it is one less place you can easily move to if you decide to cash out of Fairfax.

It is going to interesting to see how it plays out in Loudoun, with 90% of the value in one half the county and 50% of the land in the other.

At 8:28 PM, Blogger Toomanytaxes said...

Another partial solution is for the development & construction industries to use their considerable expertise to devise ways to build better infrastructure for less money. Infrastructure costs are going way out of control. There must be ways to reduce costs and add quality. To the extent that industry can build better school buildings for less money or find new concrete or asphalt roadways that better withstand the elements or the weight of heavy trucks, some of the existing problems (infrastructure exhaustion and skyrocketing taxes) could be lessened and some, but certainly not all, resistance to development might be reduced as well. NAHB and other related groups ought to fund research and development in these areas. They might get better results than by fighting the political wars with lobbyists.

At 10:54 PM, Anonymous Anonymous said...

Is anyone aware of a comparative economic study comparing the land values and tax rates in highly regulated locations versus non-highly regulated locations? That would put an interesting perspective on the fiscal impact of growth policies.

I read Ray Hyde with interest as he and I both reside in a county that has one of the stranger and more far-reaching set of growth controls. The county government is quite comfortable in taking liquidity from landowners because of perceived benefit to the common good. However, application of the county regulations in rezonings is based on a one-case-at-a-time approach that creates some degree of inconsistency in land use opportunity. The county budget is $202 million for what may be now around 75,000 in population, or around $2700 per person. 65% or about $130 million of the budget goes to schools. Roughly 10% of the population are children. That's a healthy chunk--but our students aren't showing dramatic increases in academic performance. All this is to say that land use controls aren't cheap and while beneficial to green space aren't necessarily beneficial to people or their pocketbooks. The place isn't Mecca, or perhaps one could say it is...


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