Proffer bills seek to address impacts of residential growth

January 15, 2019

Changes made by the 2016 General Assembly to Virginia’s law on cash and in-kind proffers has severely limited the ability of localities to address the fiscal impacts of new development when considering a rezoning application. Multiple bills working their way through the legislature attempt fixes to this problem.

SB 1373 (Favola) and HB 2342 (Thomas) were proposed by the Homebuilders Association of Virginia. While the introduced bills are not identical, it is VACo’s understanding that both bills will be amended in committee to conform with one another and include the following changes in law:

  • Provides a separate development review process (distinct from existing law) where an applicant may voluntarily submit any onsite or offsite proffer they deem “reasonable and appropriate, as evidenced by the signed proffers.” The current law assumes that any proffer is “unreasonable” unless it addresses an impact that is specifically attributable to a proposed new residential development and is a listed public facility or improvement.
  • To initiate legal action against a locality for requiring an unreasonable proffer, an applicant must have “objected in writing to the governing body regarding a proposed condition prior to the governing body’s grant or denial of the rezoning application.”
  • Verbal communications with applicants cannot be “used as a basis that an unreasonable proffer or proffer condition amendment was required by the locality.”
  • Does not “prohibit or require presentation, analysis, or discussion of the potential impacts of new residential development or new residential use on the locality’s public facilities.”

SB 1143 (Peake) and HB 1801 (Ware) add additional categories of public facility improvement including animal shelters, school buses, and capital equipment. The bills also tackle a key issue related to public facilities capacity not addressed by the Favola and Thomas bills by removing the “specifically attributable” language of the 2016 bill thus allowing applicants to address the impact of applications on the existing capacity of public facilities. This fixes the current standard that only allows addressing the impacts “in excess existing public facility capacity at the time of the rezoning or proffer amendment” that is “specifically attributable to the new residential development or use.”

Building on the expanding definition of public facilities above, SB 1524 (Black) adds libraries, community facilities, stormwater management facilities, affordable housing, and “any other public facility identified in a locality’s capital improvement program” to qualify for the acceptance of proffers. The legislation also changes the standard of “specifically attributable” to “reasonably attributable” in determining if a proffer is unreasonable in addressing the impacts of new development.

HB 2276 (Murphy) creates the ability for a locality, by ordinance, to “opt out” of the changes enacted in 2016 if it creates a stakeholder advisory committee consisting of representatives from the development community and residents to help craft the ordinance. Additionally, any such ordinance must include (1) “provisions for credits or offsets against any recommended cash contributions for in-kind contributions such as land dedication, public facility construction, affordable housing units, and for the underlying density permitted prior to the rezoning.” And (2) “require that any offsite proffers bear, at minimum, a reasonable relationship to the projected impacts of the new or proposed residential development on local public infrastructure and facilities.”

VACo is encouraged by the proposed changes to the existing proffer law that work towards allowing greater flexibility in the application process for determining and addressing impacts of development. These bills, individually and collectively, move the needle closer toward this objective.

VACo Contact: Joe Lerch, AICP

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