The Impact of SB 549 on Residential Rezoning in Virginia Sterling E. Rives III Hanover County Attorney May 5, 2016

Development of Conditional Rezoning in Virginia “Old Conditional Zoning” – Only in Northern Virginia and Eastern Shore “New Conditional Zoning” – Applied to rest of state in 1978 Need must arise from rezoning Must have reasonable relationship to rezoning Donations of cash, land and off-site improvements prohibited “Newest Conditional Zoning” 1989 – Authorized only for high growth localities Proffers of cash, land and off-site improvements permitted Conformance with Capital Improvements Plan and Comprehensive Plan required

Localities Develop and Implement Cash Proffer Guidelines Impact per dwelling unit on capital facilities Credit for portion of taxes paid per dwelling unit Amount negotiable, but developers preferred certainty of a proffer guideline “New growth paying its own way”

Current Legal Framework Nollan (1987) “essential nexus” = “give rise to the need for the conditions” Dolan (1994) “roughly proportional” = “reasonable relation to the rezoning” Koontz (2013) suggestions or requests by government officials must satisfy Nollan-Dolan

Koontz Dissent “if each idea or proposal offered in the back-and-forth of reconciling diverse interests triggered Nollan-Dolan scrutiny …, no local government official with a decent lawyer would have a conversation with a developer.” Justice Kagan

Koontz Led to 2014 Legislation §15.2-2208.1 applies to “any approval or permit …” Grant or denial based on an unconstitutional condition may lead to damages and attorneys fees Unconstitutional condition “presumed” to be the controlling factor

SB 549 Provisions On-site and off-site proffers must address only impacts “specifically attributable” to new development Application to on site connecting roads, ROW dedication and road widening? Application in rural areas with widely scattered impacts

SB 549 Provisions (Continued) Off-site proffers permitted only if development creates a need or identifiable portion of a need for facility improvements “in excess of existing public facility capacity at the time of the rezoning …” A C B

SB 549 Provisions (Continued) Each new residential development must receive a “direct and material benefit” from any public facility proffer What about proffers for off-site stormwater management facility improvements? What about contributions for facilities that may not be build until years later?

SB 549 Provisions (Continued) Locality cannot accept “unreasonable proffers” even if voluntary Presumption that “unreasonable proffer” was controlling basis for locality decision Award of attorneys fees and costs Inconsistent with existing statutes

Possible Consequences of SB 549 Localities revisit comprehensive plan designations Public facility improvements are delayed Additional public funds directed to public facilities from other sources

Possible Consequences of SB 549 (Continued) Proffer guidelines will be eliminated Negotiations with developers will be considered perilous Detailed impact analyses will be required Localities will seek developer assurances that proffers are “reasonable” Localities will disclaim any unreasonable suggestions by local officials Impact of mixed use development will be even more difficult to analyze

Developers are Apprehensive Increased uncertainty over approvals and costs of development Increased zoning costs and delays Less guidance and communication from local officials

SB 549 is Unlikely to Promote Affordable Housing Any reduction in developer mitigation of impacts will increase opposition to new development Reduction in cash proffers ≠ reduction in home prices Unclear whether proffer to provide affordable housing is “unreasonable”

Conclusion If state does not want localities to accept proffers for infrastructure improvements necessitated by new development, it must provide alternative funding sources.