Good morning.
For those who do know me. I have been in the industry and community since 1978. I’m a master carpenter and licensed real state Broker in Vermont and New Hampshire (main Client- Dollar General), served about 8 years
on the Essex Junction planning Commission (most as Chair), etc..
To my point, we been having this same conversation all through my years.
I sure the numbers have increased/changed, so has are the ability to create a better community for all.
Education is always the best choice!
Education is the point of this group. Let’s keep this going.
Question: Do people feel “creating that better community” is harder more risk, costs, etc) here? If so, give a sample?
Mark R Thibeault
CRE Source, LLC
P.O.Box 161
1705 Peach Brook Road
Newbury, VT 05051
(802) 363-8835
From: vtdevelopment@simplelists.com <vtdevelopment@simplelists.com>
On Behalf Of Kemener Whalen
Sent: Thursday, January 10, 2019 4:54 PM
To: Marla Keene <mkeene@sburl.com>
Cc: Benjamin Avery <ben@blackrockus.com>; vtdevelopment@simplelists.com
Subject: Re: [VT Dev] Fees
Good afternoon Marla,
Thank you very much for weighing in with your perspective. I believe that the intent of the group is to open a dialogue of industry professionals to make our communities, towns, and states. We seem to be doing just that. While my colleague's
commentary can be perceived as incendiary, rather it is simply a goal of providing education and information to the consumer. One of the greatest challenges facing vermont is the continuing rise in the cost of housing, particularly in the more economically
robust regions of Vermont. This is creating a growing gap in price to income ratios. Our price to income ratio is the 4th highest of any non-coastal state. The burlington-south burlington MSA ranks 37th out of 381 in price to income ratio (not in a good
way).
What I think Ben is trying to highlight is that it is really easy to talk about protecting our natural habitats and beautiful view corridors, but what is often not discussed is the real cost of doing so. We are certainly not suggesting
that Vermont should be slashed and burned to make way for strip malls, what I think we are driving at is there may be a more cost effective way to provide the protections, without having substantial fees pass through to consumers. The free press article that
prompted Ben's email discussed all sorts of changes, including changes surrounding Climate Change. The reasonable assumption is there will be impact fees associated with Climate Change protections (of some kind), to the host of other fees paid for (at risk)
by the developer - and to reiterate - passed on to the consumer.
While our goal is certainly to make money, it is also to make sure that Vermont has a strong and vibrant economy for years to come. We are a company owned and staffed by relatively young (a few of us are in our 40s, while others including
myself in their 30s) group of people who want to operate in a thriving Vermont economy for decades. With the stagnation in job growth and population growth, coupled with the rising cost of construction material and labor, bringing a product to market that
can be reasonably afforded by a working class family is tremendously difficult. As the cost of development continues to rise it will price out ordinary families, the drivers of the economy, and the beautiful pastoral views will be there only for the benefit
of those that can afford a $450k "starter" home.
We do feel that public education of what they are paying for when they purchase a home is a very reasonable thing to do. We are not looking to create an angry mob - we know enough about what that is like on the other side - as the appeal
process in Vermont heavily favors the vocal minority and projects that can bring community good (including reasonably affordable housing) will see the underlying costs of development, and thus the costs passed through to consumers continue to rise simply because
someone doesn't "like it".
It was not the intent of Ben's email to "create an angry mob", but rather to provide education to the public that they rightfully deserve. I sincerely appreciate your response to his email, as I do think it will take input and communication
from all parts of our industry to ensure that Vermont has fair and protective land use laws in place that also promote economic growth and long term stability.
Respectfully submitted,
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On Thu, Jan 10, 2019 at 3:50 PM Marla Keene <mkeene@sburl.com> wrote:
It seems like a reasonable proposition to disclose permitting and impact fees associated with a unit, as long as it is done equitably and not in a manner intended to be incendiary. For example, the cost of a unit also includes land costs, initial engineering costs, costs to attend meetings and adjust the design to satisfy public outcry, and inspection costs, all beyond the more widely considered costs of materials, markup and labor. Providing an itemized breakdown of the whole package sends a very different message than “permit fees are $10K, talk to the regulatory agencies if you have an issue with it.”
To say that impact fees are a tax on consumers to fund coffers is interesting perspective because we hear all the time from neighbors who believe developers are making money hand over fist and therefore should be able to accommodate all their demands. When compared to the cost of serving a new home, permit and impact fees make a dent but certainly don’t cover everything, which is why there are various ways residents pay for public services. Involved residents who want to have an open and thoughtful discussion of alternative ways to fund services are great, but an ill-informed mob creates more paperwork and costs for public agencies and developers alike.
Sincerely,
From: vtdevelopment@simplelists.com <vtdevelopment@simplelists.com> On Behalf Of Benjamin Avery
Sent: Wednesday, January 9, 2019 4:48 PM
To: vtdevelopment@simplelists.com
Subject: [VT Dev] Fees
Happy 2019 All,
We have been absorbing the proposed changes to ACT 250 as many of you have been this past week. In reading the BFP article this morning, one of the items that is noticeably missing from any of this coverage, is the continued increase in cost that is incurred by developers and passed to consumers.
As we look at goals and changes for 2019 one consideration is adding a “fee disclosure” process to our new home construction. Basically, at each new home closing we would disclose all of the permitting and impact fees (as well as appeal costs, if applicable) associated with the unit. There is a fundamental lack of understanding on the publics part, of the direct consumer impact from growing costs of development in Vermont and this concept is a quick and easy way to start the conversation. These fees are basically a tax on consumers and we think that people might actually take more interest in these matters if they had an understanding that 10 or 20k of their home cost was in fact making its way to municipal and state coffers.
We view this as a “community education” process, we feel that the consumer should know what they are paying for. So much time in the new home process is spent on balancing costs of kitchens, baths, floors, upgrades, etc… It never comes up in the process that a Prime Ag fee (for example) might be costing 1-2% of the global cost of the home.
What do people think of this? Would other builders be willing to do the same? We would welcome feedback, thanks!
Best Regards,
Benjamin Avery
Vice President, Development
BlackRock Construction
m: 802.316.0004
a: 68 Randall Street
South Burlington, VT 05452
w: BlackRockUS.com
e: Ben@BlackRockUS.com
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