Politics and Proffers
By Tyler Craddock • Oct 14th, 2009 • Category: Feature, Land UseRecently, the proffer system and its perceived strengths and weaknesses have been the source of much discussion. For the lay reader, the proffer system involves offering certain conditions in connection with a zoning case and is also referred to as conditional zoning.
While the majority of the discussion has centered on cash proffers, the payments that developers are asked to provide in support of a proposed project, and specified non-cash contributions, the proffer system goes further and can actually force choices on consumers, contribute to sprawl, drive up the cost of housing and distort market choices in what should be a free market. You see, the proffer system also involves local governments asking developers to accept a wide range of conditions in connection with a zoning case. While some of the requests are quite reasonable, others are simply driven by politics.
From the outset, it is imperative to point out something inherent in the proffer process: while the law may recognize any sort of proffers as voluntary conditions offered by the zoning applicant, in many instances they are anything but voluntary. Instead, they are the conditions to which a rezoning applicant must agree if the applicant hopes to have their case approved.
Here is how it works: as a rezoning application makes its way through the process, different departments and the public have the opportunity to review the application, and in doing so, ’suggested’ proffered conditions - items that would allay concerns - are presented to the applicant. It is at this point that cash is suggested to ease the concerns of the folks in planning and budget and other non-cash proffers are suggested for items like road improvements.
But cash and road improvements are not the only kinds of proffers ’suggested’ to applicants. Other, even more politically driven conditions are also part of the process. One such example would be architectural proffers, where the applicant is asked to proffer things such as minimum square footages or how many sides of each home are made of brick. In some instances developers have even been asked to proffer the colors permitted on signage or the type of windows, even down to the arrangement of the panes. While it is usually in an applicant’s political best interest to offer these types of conditions, they have nothing to do with the quality of the construction or with safety; they are simply options that would otherwise be options left to the builder and the buyer as they should be in a free market economy. Instead, consumer demand is replaced by government demand as the driver of production choices. Moreover, in residential cases, the resulting homes are usually more expensive, thereby affecting the supply of affordable housing choices for Virginia families.
A similar type of proffer involves density. Let us assume that someone is applying for a rezoning so that allowable densities for their parcel would yield up to 175,000 feet of commercial space. To make neighbors happy, the applicant may be ’asked’ by some in political leadership (read Supervisor, City Councilor or Planning Commissioner) to proffer that they will cap the floor space at 100,000 square feet or, as a way of trying to control the so-called big box retailers, to proffer that the largest tenant will take up only a certain percentage of floor space.
In addition to substituting government choices in place of market-driven choices, as all of theses types of proffers do, limits on overall square footage do two other things. First, by limiting the overall square footage on a given site, the cost of each square foot goes up, raising the cost of doing business. Second, a developed parcel with a square footage yield that has been artificially limited will meet less of the community’s demand for commercial space, meaning that more land will have to be developed at some point to meet market demand, contributing to sprawl. Additionally, caps on the largest tenant will dilute the value of other space in the development as such a condition by its nature artificially limits the choices and types of anchor tenants instead of letting market demand dictate those decisions.
So, how do we address the issues raised by conditional zoning in Virginia? It depends on what you want to do. If the policy choice is to keep conventional, use-based conditional zoning as the preferred tool of choice for making land use decisions, one idea might be to look at these types of scenarios as part of the larger issue of proffer reform and give serious consideration to issues raised by architectural and other types of proffers as well as the conditional zoning process in general.
But, simply fixing conditional zoning may not solve the problem. Indeed, in the way conditional zoning is practiced in Virginia, the ability to be able to proffer these types of conditions is integral to being able to navigate the land use process. Perhaps it is time to look at a different method altogether for addressing land use. Certainly, we should take the discussion back to square one and see if we can develop a better, more market-based and less politically-driven way to make local land use decisions.
Tyler Craddock is the Director of Government Affairs for the Virginia Chamber of Commerce. Previously, he served as the Director of Public and Government Affairs for the Home Building Association of Richmond. Prior to moving the Richmond area, he worked as a Legislative Aide to former Delegate Allen W. Dudley (R-Franklin County), a consultant to former North Carolina State Representative Cary Allred (R-Alamance County) and in the private sector as a real estate agent for Prudential McCann Realty in Burlington, North Carolina. A graduate of Virginia Tech (BA ’93, MA ’96), he resides in Chesterfield County with his wife and children.
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well, Tyler, you’re conflating some issues here. Cash and Transportation proffers – as well as fees for water/sewer are ostensibly to mitigate the impacts – to maintain some level of LOS for facilities and services.
these are different than proffers for “conformity” to county ordnances. and while I’d agree.. there are ample onerous rules and regs .. I’m not sure that “political” is the right word unless we think that telling a prospective applicant that his bright pink big box plopped down in the middle of a residential area is wrong.
Most zoning laws and special use permits are really designed to promote development that is more compatible with adjacent uses. This is why we don’t put a steel stamping plant next to a day care or a porn shop next to a church.
so. I think discussing these two things in the same context doesn’t “work” for me.. maybe it does for others.
If you want to say that we ought to change the name of cash proffers for infrastructure to “impact fees” and Level of Service Standards .. maintenance that needs to be part of the conditional zoning review process then I’m with you.
Larry,
My column was specifically meant to be about the facet of conditional zoning (the fancy term for the proffer system) that deals with things other than cash and non-cash for stuff like schools and roads. That issue has and will continue to be discussed in a vigorous manner. I solely wanted to focus on other items that are negotiated and how the political nature of that part of the system may lead to consequences that are not in our best interest. So, I didn’t intend to conflate those different facets of the proffer system. I recognize that proffered conditions for infrastructure are different from what I am talking about here.
As for your “pink box,” I think that is a bit of stretch. Why would an applicant do that in the first place? If it were so undesirable (which is the image I think you were trying to invoke), there would be no market for it. Moreover, I doubt there is a zoning ordinance that would allow said box in the middle of a residential neighborhood as a use in the first place. So, to me the “pink box” is more of a red herring.
Larry,
PS, thanks for reading. Even when we don’t see eye to eye, I appreciate your views!!
Hey Tyler – this could be one of those deals where I don’t fully understand since I’m not in the planning or development field.
In my county, over time, various by-right uses have been removed from the basic zoning categories and a special use permit required.
the motivation for doing this was that the one-size-fits-all …uses… did not always make sense in every case but also because the property would change hands and the uses would change after other properties around it had developed.
there were conflicts between property owners. You’d have a garage on a commercial strip with it’s backside adjacent to backyards of residential or you’d have a church with a fast food place next door and things of that nature where the use, under certain conditions might make the “fit” acceptable but other configurations not. For instance, the garage could have additional requirements for sound and visual buffers that the basic zoning did not require – as a condition of approval.
different kinds of lights could be required to keep the adjacent properties darker at night, etc…
unlike you, I do not think unfettered market-forces always produce the best and highest use. I think you’ll probably admit that I can show you some existing uses that along with others led to complaints and conflicts and sometimes to adjacent property degradation and devaluation.
If you buy into the idea that industrial, commercial, residential are different categories because you really don’t want any/all “mixed” uses of these – in any/all circumstances, and you admit that one size does not fit all then wouldn’t proffers be one mechanism for insuring better ‘fits”?
I think dialog on issues like this leads to better understanding of the issues and the various points of views that may not have been considered so it’s a good thing.
Tyler – have you every read this:
OPTIONS FOR IMPROVING THE COORDINATION OF TRANSPORTATION
AND LAND USE PLANNING IN VIRGINIA 2004
http://www.virginiadot.org/vtrc/main/online_reports/pdf/04-r14.pdf
in this document on page 140 – you’ll find this discussion:
” Virginia
Comprehensive Planning
Several of the critical antecedents to transportation planning and land use planning in
Virginia as it is done today go back to the early 20th century. Current state planning statutes
relating to comprehensive planning are modeled closely on the Standard City Planning Enabling
Act (SCPEA) of 1928, which was published by the U.S. Department of Commerce to encourage
local comprehensive planning. Although it is not nearly as well known, the SCPEA had an
important antecedent worth mentioning here: the Standard Zoning Enabling Act (SZEA).”
……
Tyler, I would agree with Larry G that “political” is not the right term to use to describe the zoning approval process as it introduces unnecessary baggage into the discussion.
The land-use approval process is by its very nature a public process. The creation and modification to a municipality’s comprehensive land-use plan describes what land-uses the existing community will accept. Any changes to the comprehensive plan and zoning requests must (and hopefully are) based on the short and long term benefits to the community. I realize the “benefits” is an abstract term and that is why public hearings are held to get citizen stakeholders involved in the determination of “benefits.”
Changing the discussion from “political” to “public” erodes the position that developers should have more influence in the decision process than a municipality’s citizens. After all, the developers take their profits and leave the citizens to live with the results. Now we have a commercial profit vs. quality of life debate.
The current proffer system is not perfect and has been subject to abuses on both sides but I’ll take the position that favors a beneficial quality of life outcome and leave the developers to calculate their return on investment potential.
Dennis Husch
Member of Council
Town of Herndon, Virginia
Councilman Husch… with due respect, the problem with the cash proffer system is it DOES NOT favor a beneficial quality of life outcome. It’s a quality of life destructor.
Herndon is Fairfax County, correct? According to the Commission on Local Government, the town of Herndon collected $68,000 in cash proffers in FY 2007-08 — and didn’t spend a penny of it! How did that $68,000 improve quality of life? It didn’t. It just drove the price of housing higher. While I don’t live in Fairfax County I have been there many times. I know the absolute paucity of new housing costing under $200,000 available to purchase. Living in apartments DOES NOT favor a beneficial quality of life. Lack of new single-family detached housing for less than $300,000 DOES NOT favor a beneficial quality of life. Exorbitant cost of living DOES NOT favor a beneficial quality of life. You cannot have a beneficial quality of life if the price you pay for housing is too high.
Cash proffers put the onus on a very few to provide infrastructure that all use. It drives housing costs to a point where only the rich can afford to buy new homes. It doesn’t — and can’t — provide funding for all the services county residents need. There’s no one who can tell me that cash proffers are fair or beneficial to anyone’s quality of life.
James
I was not arguing against cash proffers. Proffers, cash or in-kind contributions, all contribute to determining if the proposed rezoning is beneficial to the community. My difference of opinions was the implication that the decision to change the zoning should be (or is) a political decision when in deference to the tax payers is should be a public decision based on how the public perceives benefit.
Proffer money received by the Town of Herndon is typically earmarked for specific purposes – stormwater management, water and sewer, parks and recreation, sidewalks and trails, streets, etc. The proffer funds are encumbered and that’s how they are spent. Proffer money is spent when a capital improvement project (sic) is initiated. The Town then uses the proffer money and money from the general fund for engineering and construction.
The prime driver of cost for housing in Herndon (and Northern Virginia) is not the cost of proffers or construction – it is the cost of the land. The way housing prices are reduced is to build more housing units on the land and the required increase in density (building height) has not been viewed as beneficial by the citizen stakeholders.
Dennis Husch
Member of Council
Town of Herndon, Virginia
Dennis — Thank you for your comments, and thank you for your service to the citizens of Herndon. Unfortunately, “political” is the perfect term. When property owners and rezoning applicants are forced to proffer items like the number of sides brick on a home or the style of windows in a building or are forced to cut their density to levels below even what the comprehensive plan would suggest, you have gone way beyond quality of life considerations and slipped into a process that seeks exactions for political purposes rather than land use purposes, and you have substituted the hand of government for consumer demand as the driver of what residential and commercial choices are available. I recognize that when properly administered conditional zoning can be very beneficial to citizens, local governments and the business community. What I am getting at are some of those very abuses that you acknowledge, abuses that in my opinion have more to do with how conditional zoning is administered in some instances than the underlying concept itself and that arise out of the politicization of land use decisions. In looking at those abuses, it is fair to ask if we can fix them within the system or if we need to look at a different way to do land use in Virginia. Can we lay out an open process that is less political and provides more certainty for all concerned? I do not know, but I know we cannot if we do not even try.
Larry — thanks again for your comments. I have not read the item you reference, but will do so — thanks for the link!
Dennis,
I just saw your second comment in reply to James, and one question does arise in my mind on the affordable housing issue. As a policymaker, how do you strike the balance between what concerns you state that existing residents may have about projects that would yield affordable housing and the need for localities to have an abundant supply of affordable housing for current and future generations?
T-
Just FYI – developers with proposals in Spotsylvania these days have to hold a community meeting prior to the formal process – and that meeting(s) may become the basis for non cash proffers.
I’m supportive of the process because it offers the opportunity to head off trouble later on.
It does not do away with the NIMBYs but it puts a face on the public..gives them the opportunity to ask questions – give the developer the opportunity to not appear in tailored suits and to honestly dialog and possibly reach accommodation on some things.. and distill the main objection down to the ones that form the merit of the decision.
It makes the developer think about the project from a citizens perspective and it gives the developer the opportunity to make changes – sometimes changes that are not expensive.. relatively easy to do and in the process – quiet some opposition.
and in many cases – the public realizes that the developer is not evil and may actually be a regular guy or gal just trying to make a living.
it works.
the 600 lb gorilla is how much infrastructure is required to mitigate the impacts and maintain a reasonable LOS relative to existing conditions.
who should pay for this?
I give an example of water/sewer – infrastructure that in most folks minds is a legitimate cost for a home.
it’s gets more fuzzy when you start talking about schools, libraries, fire stations, etc.
I’d like to point out also – that existing citizens pay for this stuff also because some of it must be built concurrently with the development. When people move in to their new homes, they expect a school seat for their kids so someone has to be paying for that school long before the house buyer writes their check and gets their mortgage that includes the cash proffers for infrastructure.
so here’s the rub for fast growing counties…
you have to borrow money to build schools and counties, just like individuals have a credit capacity that they cannot exceed without having to pay horrendous interest and endanger their bond and credit rating.
so in fast growing areas, there is no reasonable option for funding unless you are going to raise taxes.
raising taxes on existing citizens to pay for growth is how the BOS gets “unelected”. we know that.
we cannot have a solution from the GA that in the end – forces localities to accept growth with inadequate impact fees that leave few options other than raises taxes to pay for growth
If you want the counties to lock down on conditional zoning – make the impact fees inadequate and you’ll get your wish.
so we need to find a way to get the infrastructure built but still not kill the affordability – and at the same time have a county willing to accept conditional rezones.
We’re sure enough a Dillon Rule state but be careful about the consequences of mandated impact fees.
Tyler – more than semantics, I think we have a difference of opinion because we have a difference of perspective. My perspective is very narrow as I am an elected official at the very bottom of the political spectrum. At this level those elected are very close to the individual citizens. Big issues are refuse removal, broken street lights, potholes, and “when can the public works department pick up the dead skunk in the street?” – Really!
The development proposals I have seen, by the very natures of being in a town, have been infill development and redevelopment. Infill in the sense of new construction on a parcel surrounded by existing neighborhoods or commercial structures. And, redevelopment in the sense of the razing of existing structures to build something new.
Couple the close relationship between the elected and the electorate with the fact that many (most?) people are against change and you get a demand by those people that if anything gets built it must complement the existing neighborhood and contribute positively to the quality of life. Hence bricks, windows and density proffers.
My poorly expressed point above was that the zoning decision should not be made by the municipality and the developer alone but must include citizens as full participants and stakeholders; that’s why I tried to stress “public” over “political.”
I would submit that many (most?) of the abuses in the land-use decision process occurs when the decision-maker places his own self-interest above the interests of the community.
While the “pink box” analogy is a bit extreme it make a good point. Infill development must be consistent in materials, mass, setbacks, and height with that of the surrounding neighborhoods. The ones best positioned to make the decision on “how pink the box should be” are the citizens directly impacted by the development.
I would also submit that the core of land-use controversies is a lack of community education and outreach by the land-use decision makers. If the level of understanding of land-use options, urban planning principles and the municipal processes are elevated in the community and participation in encouraged by elected officials and community leaders, developers will know what they are getting into and that they will face and educated public before they submit their development application.
In short, conditional zoning abuses can be fixed by educating the public and encouraging their participation – marginalizing political abuses and developer skullduggery.
The issue of affordable house is certainly a challenge. Most people I speak with are very supportive of affordable housing just not in their neighborhood. As I alluded to earlier, the cost of land is the primary driver in the cost of housing construction (not price) and the only solution to acquiring affordable housing is an increase in development density – vertical density. Having said that, no one wants a ten story building in the middle of their residential neighborhood.
The is an opportunity to strike the balance necessary to yield affordable housing with the implementation of “new urban” designs that encourage mixed use (commercial, retail, residential) development on land currently zoned non-residential. Not only do the commercial/retail uses reduce the [potential] cost of the residential component, it provides the opportunity for people to work where they live and that reduces transportation demands.
In Northern Virginia we are seeing the opportunity for mixed use development associated with the expansion of the Metro Rail system through Tysons Corner to Dulles Airport and into Loudoun County.
The intersection of new urban design concepts and transit oriented development have the potential to provide affordable and work-force housing in Northern Virginia.
I hope these ramblings are of some value.
Dennis Husch
Member of Council
Town of Herndon, Virginia
” In short, conditional zoning abuses can be fixed by educating the public and encouraging their participation – marginalizing political abuses and developer skullduggery”
… totally agree…
even to this point – marginalizing the PERCEPTION of ….
most communities highly value their sense of community. they’re not necessarily opposed to change per se (some are) but they are looking for things that COMPLEMENT their communities. that not only fit in but add value.. developers who meet with the citizens, act like a human beings, listen, and make efforts to adapt – will find the conditional zoning process more productive.