BUSINESS IS BAD ENOUGH, SO it's understandable that builders in Virginia's Prince William County and nearby Loudoun County were upset when the board of supervisors in both counties passed resolutions saying they would take 12 months before approving any new residential project.
While not technically a moratorium, that's essentially the net effect, between the county governments' resolutions and the ongoing business downturn.
Mark Granville-Smith, CEO of Classic Concept Builders in Manassas, Va., says he'll be lucky to build 15 homes this year, down from 50 homes per year during the boom. Granville-Smith is also concerned about the increased costs builders are being asked to pay for local infrastructure.
“What we're seeing is that the governmental cost of a new home is greater than 10 percent of the sales price,” says Granville-Smith, who explains that the average new home sells for $500,000 in Prince William County.
“There's only so much [that] a decline in land prices would offset such high governmental fees, which means the home buyer ultimately pays—and that makes homes less affordable,” he says.
Corey Stewart, chairman of the Prince William Board of County Supervisors, says the residential market was overheated and the county needs time to absorb the 3,000 to 5,000 new households that have moved to Prince William annually for the past seven years.
SOURCES: U.S. BUREAU OF CENSUS; PRINCE WILLIAM COUNTY (VA.) OCCUPANCY PERMIT DATABASE
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