More to Session than the Budget, Land Use Issues Addressed as Well

In November, I wrote a column about some of the land use issues awaiting the new Governor and the General Assembly. At that time, the discussion centered on three items: stormwater management, cash proffers and tweaks to Virginia laws regarding Urban Development Areas (UDA’s).

At the close of the General Assembly, it is entirely appropriate to circle back and discuss what has happened on those, as well as one additional matter: vested rights. In reading this, please do keep in mind that all legislative actions are subject to approval by the Governor.

When the General Assembly began in January, there were numerous bills introduced to address concerns raised over stormwater regulations proposed by the outgoing Kaine administration. Indeed, even before Governor Kaine had left office, the Soil and Water Conservation Board had backed off some of the most stringent portions of the proposal. Looming over the issue was (and is) the Environmental Protection Agency (EPA), which will be developing and sending down its own limits and standards. In the end, the General Assembly opted to delay implementation until the EPA hands down its own plan (but no later than December 1, 2011). This approach, supported by almost all stakeholders, makes sense because any state regulation would have to comport with what is contained in EPA’s new system.

On the issue of cash proffers, the General Assembly did not have the knock-down, drag-out fight that occurred a couple years ago. This year, the skirmish was quite limited. The General Assembly, over the objection of a few, but with the support of many, approved legislation prohibiting collection of a cash proffer payment until the period between the final inspection and issuance of the certificate of occupancy (CO). Under current practice, cash proffer payments are often collected when the builder pulls a building permit, usually months earlier in the process. This bill will keep builders from having to carry this cost and the interest it accrues on their balance sheets for months, thereby improving their cash flow and preventing home buyers from ultimately paying those accrued interest costs. This is a very modest change that will help an industry that plays an important role in our economy. According to my friends over at the Home Building Association of Virginia (HBAV), over 55 businesses – many of them small, locally-owned businesses – are usually involved in the acquisition, financing and construction of every new home in the Commonwealth.

With regard to UDA’s, the General Assembly did indeed tweak the rules. Under the legislation approved by the General Assembly and sent to Governor McDonnell, localities that have up to 130,000 persons would still have to create UDA’s with a residential density of at least four single-family homes, six townhomes or twelve multi-family units per acre and an authorized commercial density of 0.4 FAR. For localities in excess of 130,000 persons, those densities would increase to eight single single-family homes, twelve townhomes or twenty-four multi-family units per acre and an authorized commercial density of at least 0.8 FAR. Currently, the law only requires that UDA’s allow for four single-family units per acre and a minimum of 0.4 FAR. The criteria for being required to designate a UDA (Population exceeds 20,000 and at least five percent census-to-census population growth OR 15 percent Census-to-Census population growth) remain unchanged. In addition, this legislation rightfully sets in place a tight, clear definition of developable acres and states that UDA’s would serve as receiving areas under any Transfer of Development Rights (TDR) plan approved by the locality. This legislation promotes regional dialogue and coordination among localities in the sizing, scoping and placement of their respective UDA’s, and it clarifies the manner in which towns and counties account for future growth in shared UDA’s. The Commission on Local Government is the state entity tasked with assessing compliance among Virginia‘s localities.

In addition to the issues indentified in November, the 2010 session of the General Assembly also addressed the issue of vested rights. Vesting refers to the process whereby a landowner’s rights are protected after the property in question is the subject of a significant affirmative governmental act and the landowner expends time, effort and money to go forward with a project. The General Assembly approved legislation that would make clear that an official zoning determination by the local government (which is subject to review and appeal) constitutes a significant affirmative governmental act for purposes of vesting. This bill will provide better guidance for businesses, taxpayers and local governments as to what constitutes a significant affirmative government act and help prevent the type of situation that led to the Board of Supervisors of Stafford County v. Crucible, Inc. case. (Disclosure: my employer, the Virginia Chamber of Commerce, partnered with the Home Builders Association of Virginia on an amicus brief in the Crucible case.)

History will record that the 2010 General Assembly session took place during trying economic times and was dominated by the issue of the state budget. But, the story of the 2010 General Assembly includes much more than that. A part of that narrative should also rightfully include thoughtful action with regard to land use in Virginia.