Buice column: Residential development: Is it a losing proposition?

Published 12:00 am Thursday, July 1, 2021

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Like many others in Clemmons, Allen Daniel wasn’t real happy when he heard that the village was considering raising the tax rate from 11.5 cents to 15 cents per $100 of valuation after no increases over the last decade — particularly since this was coming on top of this year’s rising property tax revaluations and coming off a global pandemic…

Then during the June 14 public hearing regarding the budget ordinance for fiscal year 2021-22, he learned from Mayor John Wait that single-family residential real estate doesn’t pad the coffers like everyone thinks — at least in Clemmons.

In fact, it’s a losing proposition.

Responding to a question about all the new homes being built around town and not understanding how that can’t be helping, Wait offered a surprising explanation.

“Just so you have all the info that we have, single-family residential, when you build new houses, that’s actually a negative on the budget,” the mayor said. “So when those new homes get built, it doesn’t add to the tax base. It takes away because we provide services to those homes and don’t access enough tax to cover the basic services.”

Daniel, who made an unsuccessful bid for village council in 2019 and had been the first to speak in the public hearing, couldn’t wait to return to the podium when a chance for rebuttals was offered.

“I thought the whole reason for development was to build the tax base,” Daniel said as his voice rose. “I have a solution. Put a moratorium on development. We won’t have any more traffic, we won’t have any more stormwater problems, and we won’t have any more expenses that we can’t cover with our tax rate.

“Just take the houses that we have, let supply and demand drive the price up and problem solved. If building more houses costs us more money per house, if we go in debt for every house that’s built, quit building houses. Quit allowing development. Simple.”

Wait admitted that he was startled when he found out about this. “I’ll have to tell you Mr. Daniel, when I learned that, it was also a surprise to me — just so you’re aware.”

Of course, raising the tax rate to 15 cents per $100 per valuation will help by adding additional funds to the piggy bank.

Village Manager Scott Buffkin said that Clemmons has never done any kind of formal study on residential housing not paying off.

“The typical neighborhood, unless property values are substantial, do not pay an equal amount of what it costs for the village to provide the services,” he said. “There are ancillary benefits because having more people attracts more commercial, so it’s sort of a chicken-and-egg thing. You don’t have commercial development if you don’t have the population to support it. It’s sort of a tradeoff in that sense.”

Buffkin, who has made previous stops as a town manager in two smaller towns, said that the residential housing quandary isn’t something new in Clemmons or any most other towns and follows what he learned years ago in the UNC School of Government.

“In the different types of properties, No. 1 is industrial because values are typically high and demand for services is pretty low,” Buffkin said. “No. 2 is commercial, and residential is at the bottom. The first two tend to pay the bills for the services that the residents receive.”

Lewisville, the village’s neighbor to the north, has always prided itself on being a quiet bedroom community in the suburbs that happens to be a very popular place to live and is exploding with new homes.

Mayor Mike Horn said that he wasn’t aware of the town ever doing calculations comparing the costs of residential development and providing services, but Lewisville has maintained a tax rate of 17.7 cents per $100 in valuation for the last 17 years. That is in sharp contrast to Clemmons keeping a much lower 11.5 cents per $100 in valuation for years before finally raising it to 15 cents per $100 in valuation for the new fiscal year.

Certainly, Lewisville has a higher tax rate and many high-dollar houses, but as Buffkin said, “in my experience, it’s very difficult to compare one town to another because they’re all geographically laid out differently, the property values are different, and the levels of service are different — with all these independent variables.”

It’s all a juggling act and trying to find the right balance to make everything work — not an easy task in these days.

• • • • •

After a silent 2020 due to the pandemic, an endless wave of local concerts can be found on the docket for this summer.

From Winston-Salem … to Lewisville … to Tanglewood … to Bermuda Run … to Mocksville, there’s something for everyone.

Lewisville’s Shallowford Square was in the spotlight for a Memorial Day concert with The Embers, and that was followed by a June concert featuring On The Border Ultimate Eagles Tribute Band, with “the Square packed both times,” according to Mayor Horn.

This weekend’s holiday slate includes Too Much Sylvia performing Saturday at 6:30 p.m. at the Davie County Community Park Outdoor Amphitheater in Mocksville (followed by fireworks); and Chicago Rewired — The Premier Chicago Tribute Band and REO Survivor Tribute Band concert Saturday at 7:30 p.m. at Shallowford Square.

Although he insisted fireworks won’t be coming back this year, Horn offered this tease: “Toward the end of the concert, we’re doing patriotic music, and there may be a surprise.”

Bermuda Run’s summer concert series will open with Envision on Aug. 7 at Town Center Kinderton Boulevard off U.S. 158.

Summer is here, and it’s time to get out — again! — and enjoy it.