Jumpstarting Virginia's residential development in wake of new proffer law

As recently reported, home building in much of Virginia has been almost completely stalled by a change in the state’s proffer laws. According to Loudoun Country Board of Supervisors’ Chairman, Phyllis Randall, quoted in a WTOP news report on September 7, 2017, Loudoun County has not seen a single application for new residential development since the law changed. “It completely put ice water on the residential development community,” she said. Sharon Bulova, the Chairman of the Fairfax County Board of Supervisors, was quoted in the same article. “We’ve had the same experience with the proffer bill, and essentially its just residential development sort of dried up” Similar reports are coming from Prince William County.

What happened? Over the last several years, localities issued guidelines for the amount of money developers had to give the government in order to build a new house. The intent was that those funds would offset the impacts on essential services. However, according to many in the development community, the guidelines turned into a bidding war to see how much money jurisdictions could extract. In addition, when funds were offered, they were sometimes used to pay for improvements far from the proposed development. All of that came to an end when the United States Supreme Court held that if a locality tried to extract too much money, it was a violation of the builder’s constitutional rights. The Virginia Legislature reacted with a new proffer law that forbids localities from asking for or accepting unreasonable proffers.

Now, Virginia Proffer Solutions is coming forward with an answer to the problem. According to Mike Vanderpool, founder of Virginia Proffer Solutions (VPS), the answer is found in an impact analysis. He explained that VPS uses a combination of legal analysis, data mining and predictive analytics to provide proffer amounts that are legally defensible. “We have brought together experts in law, land use planning, analytics and research to analyze individual zoning cases in Virginia localities.” The result, according to Vanderpool, is a proffer impact analysis that is based on extensive data and calculations. “Each report runs 40-50 pages,” he said, “And sets forth the data and analysis developers need to file and move forward with a zoning case. Our goal is to help developers and localities get the housing pipeline moving again.”

Developers and localities uncertain in wake of VA proffer law

Governor McAuliffe signed Senate Bill 549 in March, 2016, creating new restrictions on proffers in the Commonwealth of Virginia for new residential development. Although the law was intended to lower the burden on homeowners who ultimately bear the additional costs of mitigation, there have been unintended consequences. 

 Proffers are "voluntary" monetary contributions given by developers to localities in order to offset the impacts of the new residents on public facilities such as schools, public safety, transportation, and parks and recreation. Under the new law, existing proffer policies around the state have come under scrutiny or been repealed for fear of the legal risk. 

A standard county-wide cash proffer determined by localities, which had become the norm over the 30-40 years proffers have been accepted in Virginia, is no longer permissible under the law. This gap between the precedent and the new law has created uncertainties for both developers and jurisdictions unsure of how to mitigate the impact of developments on public facilities. 

This post is a summary of an article shared by Charlottesville Tomorrow; read more here. 

It is the mission of Virginia Proffer Solutions to solve this dilemma for both developers and jurisdictions by providing data-driven, objective analysis of the impacts new residential developments place on local public facilities in accordance with the new legislation. Contact us to learn more.