THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, February 4, 1995 TAG: 9502020293
SECTION: REAL ESTATE WEEKLY PAGE: 04 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY PAIGE FLEMING, SPECIAL TO REAL ESTATE WEEKLY
LENGTH: Long : 109 lines
Vince Napolitano is on a mission. He believes that housing costs are going through the roof and he wants it stopped. Now.
And now that he's the newly elected president of the Home Builders Association of Virginia he just might get his chance to stand up and be heard.
Napolitano is an area builder with 17 years experience building single-family homes plus a few condominiums in Virginia Beach, Chesapeake, Suffolk and Newport News. And his style is a lot like the homes he builds. Accessible. Thoughtful. Open.
However, behind the easy-going persona is a concerned man with a legitimate agenda - the ever-rising cost of housing. Now is the time for builders to take the stage, says Napolitano, and make some changes or costs will skyrocket and fewer people will be able to afford to buy into the American dream of owning a home.
In 15 years, the average cost of a dwelling has risen 137 per cent, says Napolitano, who believes the trend will continue if something is not done to curb it.
``I've seen lots of change in the last 17 years,'' he says. ``The whole business has changed dramatically. It's a whole lot more difficult to operate today because of all the regulatory things that have come up.''
For example, Napolitano sites rules pertaining to land. ``Most of the regulations and changes have not been in the house, so to speak, but in the land the homes are built on,'' he says.
``It's wetlands. Suddenly you're limited as to what you can build on.''
Explaining further, he says, that, if ``you have two builders with land that want to build homes they will be competitively priced. It keeps costs down.''
``Now if one of those builders can't build because he could have wetlands, then there's only one builder left and he can raise his prices.'' He says the buyers are then at the builder's mercy.
Proffers are another problem for builders, says Napolitano. Proffers, he explains, are charges added to the cost of each home built in order to expand the public sector - add schools, libraries and roads.
Proffers pertain only to new construction. Impact fees, which local governments are trying to establish as well, would hit everyone who wants to rezone any property. Simply put, Napolitano says, it's ``extortion.''
``Proffers abuse is going on all over the state,'' he says. ``We're constantly fighting that up at the General Assembly. The local governments call it a voluntary fee but I don't know anybody that didn't volunteer and got a rezoning.''
The problem with these fees, explains Napolitano, is that they strangle the builder who is charged with the full responsibility. ``We don't mind paying our fair share,'' he says, ``but these impact fees are not fair and they are not broad-based.''
A more equitable way to deal with this, suggests Napolitano, is to institute transfer fees charged to all real estate transactions, not just new construction. This would spread the burden to a broader base of people.
Transfer fees would include resale and commercial and take some of the burden off new sales. This would generate all kinds of revenues for localities, more than impact fees or proffers.''
Such a policy, says Napolitano, would save the builder money - a savings that would be passed to the buyer. This also would help stabilize housing costs, he believes.
Napolitano worries about complacency in the industry. He says it starts out small and never stops.
``Virginia hasn't been hit real hard yet, but we're on our way,'' he says. ``Take California. They have impact fees out there of $25,000 before you even start thinking about buying up lots or anything. You've got $25,000 right there. Other states have this too. And these fees are climbing.''
Also, Napolitano says the city and its builders need to work together so there is good growth all around.
``The city spends all kinds of money on economic development to attract business into the city,'' he says. ``But then they try to limit what builders can do with the land and then the people that come to work in these businesses can't find an affordable home.''
People need to realize that the home building industry is a reactionary business. ``We are the shelter industry,'' says Napolitano. ``If the demand isn't there, we don't build homes. So for us to be blamed as the culprit causing all this growth, which is now a bad word, is wrong.''
Builders provide needs generated by a locality's citizens. Napolitano encourages those who think growth is bad to talk to people who live in Pennsylvania or other state that were dying when things were bad.
``There are problems with growth and I won't deny it,'' says Napolitano. ``But they are problems that can and should be worked out, because would you rather have growth or die?''
For the near future, Napolitano and other builders have their work cut out for them. He says that so far it's been a busy year in Richmond. The state builders have an agenda for action and policy changes that would help deregulate the industry without causing havoc.
And, says Napolitano, many times all sides tend to think of the builder as the bad guy. ``We develop land, fill it with streets, homes and communities,'' he says.
``But when you drive through a neighborhood you helped build and see the families together gardening and playing it leaves you with a good feeling.'' ILLUSTRATION: [Cover]
[Color Photo]
BILL TIERNAN/Staff
TOO MANY BUILDING RULES?
Staff photo by BILL TIERNAN
Vince Napolitano is the new president of the Home Builders
Association of Virginia. He believes today's buyer spends too much
for a house because of petty regulations.
by CNB