The Proffer System in Virginia
Background
The concept of proffers is embedded in the Code of Virginia as “conditional zoning” under Title 15.2 of the Code of Virginia, Sections 15.2-2296 through 15.2-2303.4.
The basis of the proffer system is a recognition, founded in the origins of zoning, that real estate developments have impacts on other properties and on services provided by the local jurisdiction.
For example, houses that are constructed and occupied typically bring additional students to local schools. This may create a need for new school buildings.
As a result, the Virginia legislature determined that it would permit developers to voluntarily offer contributions to offset the impact of developments by authorizing conditional rezoning proffers.
Constitutional and Statutory Limitations
- A landmark zoning case, Koontz v. St John's River Water Management (2013), decided that monetary extractions, such as proffers, could be considered a seizure of private property, violating developers' fifth amendment rights.
- Even a "request" for a monetary contribution could be considered a violation if it doesn't pass a two-pronged test:
- Nexus Test - the impact must be caused by the new development
- Proportionality Test - the contribution must be proportionate to the impact caused
- Virginia's new proffer law states that any proffer voluntarily given would be considered "unreasonable" unless the development:
- Creates an impact on a public facility above its existing capacity, excluding operations and equipment
- Receives a direct and material benefit from the public facility improvements
Key Issues
It is important to note that even without the new proffer legislation, a jurisdiction that requests or accepts a proffer that does not meet the nexus and proportionality tests will still face the risk of liability for a violation of a developer’s federally protected constitutional rights.