Bacon's Rebellion

Democracy Thrives in Sunlight

New Kent Ferment

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by

James A. Bacon
in ,

I’m always on the look-out for niche economic development strategies, and I think I’ve spotted one in New Kent County. In “New Kent Ferment,” I write about a huge project underway, New Kent Vineyards, that could generate $1.5 billion in development over 15 to 20 years. The secret: Tapping the 55-and-older retirement/pre-retirement market.

Retirees are souring on Florida. Blame hurricanes, the threat of global warming, Al Gore’s scary video showing half the Florida peninsula swallowed by rising sea levels, and soaring insurance premiums. Plus, baby boomers tend to want to settle in a retirement community within a day’s drive of their own home, so they can stay in touch with family and friends. North Carolina is the new East Coast retirement hot spot, but Virginia is looking pretty good, too.

Affluent retirees are a gold mine. They pay lots of taxes but demand little in the way of services. Their kids have grown up, so they don’t burden local schools. They don’t commit crimes. And they’re well off enough that they don’t qualify for Medicaid. In New Kent County, of $250,000 is the break-even point for housing prices. The vast majority of houses in New Kent Vineyards will sell for more than $350,000, meaning that most households will pay more in property taxes than they demand in local government services.

Pete Johns, managing partner of New Kent Vineyards, has structured the project so that it is a net contributor to the county tax base from Day One. An $86 million Community Development Authority pays for water, sewer and roadway infrastructure improvements up front. Another $7,500 per house in proffers will underwrite the cost of a police/fire/rescue sub-station. Schools are not an issue.

There’s nothing remarkably scenic about New Kent County. The land is mostly flat, with a few gentle hills and not much waterfront. But New Kent Vineyards is creating a number of distinguishing features: a winery, a Rees Jones golf course, a polo field and a neotraditional town center with farmer’s market and two-block pedestrian mall. New Kent County also benefits from proximity to other assets within easy reach: Colonial Williamsburg, the beach and the Chesapeake Bay. Oh, yeah, and access to an Interstate highway, and two commercial airports within easy driving distance.

Not every woebegone rural location in Virginia can muster such a mix of assets, but a number of them can. A good number can do even better, offering mountain vistas or recreational boating. North Carolina has figured it out already. Virginia, it seems, is learning.

There are three caveats, two of which I explore in my column: traffic congestion, affordable housing and environmental impact. While a development like New Kent Vineyards is tax-positive for New Kent County, it is less clear whether it is tax-positive overall when traffic, housing and run-off are taken into consideration. But, then, the Vineyards project is clearly preferable to the alternative — by-right development leading to scattered, disconnected, low-density development — which is what New Kent would get in its absence.

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9 responses to “New Kent Ferment”

  1. Larry Gross Avatar
    Larry Gross

    In fast-growing Spotsylvania and Stafford – these types of developments are favored over the more traditional infrastructure and services “heavy” developments.

    But there are problems with the concept – when the development is put in close proximity to job centers as opposed to being built in places where such developments would truly only attract the over-55/retired types.

    There are various kinds of “what if” scenarios.. that if not strictly written as not allowed will eventually lead to waivers that, over time, will allow such developments to gradually “convert” to more traditional settlements.

    Very strict rules CAN be incorporated at the government level IF .. the Boards of Supervisors are so inclined but there are two pitfalls:

    1. – First some BOS and their county planners are just not up to snuff… on these kinds of issues

    2. – Some BOS … are pretty savy and without pressure from citizens are just fine with such projects being billed as “over 55” even if, in reality.. the restrictions themselves are loose and loosely enforced.

    Folks in New Kent who are concerned about development need to take a hard look at the fine print…. as … I know this sounds terrible.. but some developers HORRORs might see this as an easy “back door” to approval.

    p.s. – what happens when the original buyers leave or die?

  2. E M Risse Avatar
    E M Risse

    There is a much bigger problem:

    Over 55 / Empty Nester / Havens are monocultures.

    Nature and functional human settlement patterns abhor vacuums and monocultures.

    The bigger the monoculture the worse it is.

    A Balanced Community can include some small monocultures but the bigger they are the worse the impact — just like those fialed rubber plantations in the Amazon.

    Imbalance means high service costs and long trips to assemble the requirements of a quality life.

    What happens when the over 55s are over 75? Not many current 35 year olds will want to buy into a place in 20 years where the average age is 78.

    What saved the early the Sun City’s and the Leisure Worlds of the 60s 70s and 80s is that they have become part of the urban fabric within the Clear Edge.

    But A = pi r sq and the more scattered out and the larger these places are, the worse the future will be for the occupants and for those who must pat the taxes to support them.

    If there is not a Balance of J / H / S / R / A at the Alpha Village and Alpna Community scales, the future is bleak period.

    EMR

  3. Ray Hyde Avatar
    Ray Hyde

    “Over 55 / Empty Nester / Havens are monocultures.

    Nature and functional human settlement patterns abhor vacuums and monocultures.

    The bigger the monoculture the worse it is.”

    Mark you calendar. EMR and I agree on something.

    Now, about that jobsite monoculture……

  4. Ray Hyde Avatar
    Ray Hyde

    I thought I saw some strange story related to this, but I can’t remember what it was. Something like a 55 year old couple moved in and then she got pregnant? An old geezer’s wife died and he married a much younger trophy wife?

  5. Jim Patrick Avatar
    Jim Patrick

    Jim Bacon wrote, “. . . meaning that most households will pay more in property taxes than they demand in local government services.”

    Dream on! There is no point, no tax rate so high, that revenue meets or exceeds demand.

    This is where Marx went wrong. But for people, Marxism is flawless.

    No matter how much tax revenue, people demand services that justifies that tax.

    In this particular ‘monoculture’ —Risse is right on that part— you have large numbers of people who A) have abundant free time, B) are financially comfortable with capped incomes. They can be an active coalition willing to invest time and money to ensure their pensions.

  6. Anonymous Avatar
    Anonymous

    could you tell us where to look to find that “break even” price of housing in other places or how you arrive at that figure?

  7. Jim Bacon Avatar
    Jim Bacon

    Anonymous 8:21, I can’t tell you very much. The numbers regarding New Kent from from Bill O’Keefe, who recalls seeing them in a New Kent County study, report or some other kind of document. You might try calling the New Kent County planning department.

  8. Larry Gross Avatar
    Larry Gross

    The “break even” price is aribitrary in many respects if you don’t include schools which is the 600 lb gorilla in many localities AND the reason why .. in areas where there are growth pressures and resulting blow back about those pressures from voters.. that some BOS think that “active adult” housing is “ok”.

    But almost every locality grossly underestimates how much proffer money should be collected for roads.

    Even “active adults” drive much more than they used to … and some of them still have jobs and commute at rush hour..

    so .. I’d say.. that the “break even” price is “usually” associated with how much a home would have to generate in property taxes to pay for one school seat per year – the operational costs.

    In most counties – you’re talking 5-10K per school seat per year and so the “break even” price for a home would be 400K and up…..to actually generate the 5-10K tax needed for one school seat.

    so… you can see that there is a powerful incentive for developers to build homes that “in theory” will not generate the need for school seats.

    In Spotsylvania.. more than 20K of the new home proffer is for the capital (one time) costs for building a school.

    Beyond that.. if that house is not accessed at 400K and up – it is a net loss to the county – revenue-wise – i.e it costs more in services than it generates in taxes.

  9. Harriet Avatar
    Harriet

    I’m a 35-year-old trying to raise a family with my husband in Warrenton. (We’re renting, btw). I often wonder what will become of the 55+ communities if demographics change.

    I also wonder who will buy their expensive homes in Fairfax County when they retire to New Kent County.

    E.M Risse, I’ve enjoyed reading your research and ideas for the past several years. My husband and I ponder these issues continually. We love the design of Bath, England. It was designed by John Wood, looking down from the hills surrounding it.

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