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

2. 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

3. 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”

4. 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

5. 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

6. Koontz Led to 2014 Legislation
§ 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

7. 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

10. 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

11. 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?

12. 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

13. 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

14. 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

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

16. 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”

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