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Land Use Issues Await New Governor and General Assembly

The elections are over; Virginia has a new Governor and several new members of the House of Delegates, and when Bob McDonnell takes the oath of office and the General Assembly reconvenes in January multiple problems will be awaiting attention.

Among them are a series of land use issues that will affect Virginia’s competitiveness in future years. Producing land use policies that strike a careful balance between our cherished quality of life and the needs of Virginia’s business community is an important part of our efforts to maintain the Old Dominion’s status as the best place in America to do business.

One item that the new Governor and the General Assembly may have to deal with right off the bat is stormwater. It is likely that in December the Virginia Soil and Water Conservation Board will give its final assent to stormwater regulations that adopt a new, very strict standard on phosphorus runoff. Most business community stakeholders are rightfully concerned that these new requirements could bring to a halt many – perhaps most – development projects within the Chesapeake Bay Watershed.

The stormwater issue is complicated when you consider two recent developments. First, as pointed out by the Fountainhead Alliance, a group of businesses from across Virginia that promotes balanced environmental policies, in recent months the Environmental Protection Agency (EPA) has significantly raised Virginia’s Chesapeake Bay phosphorus allocation – the number upon which the proposed new regulations are based. Virginia is only barely above its new non point source allocation now, and with the stormwater controls already being employed, the phosphorus loading from development sites is already in decline. This suggests that the proposed regulations might be a very expensive solution in search of a problem. It certainly supports the position advocated by the Virginia Chamber of Commerce, the Home Builders Association of Virginia, the Fountainhead Alliance and others that the technical review portion of this process needs to be undertaken again to ensure that the standards coming forth are based on the best available science and are truly tailored to achieve a positive environmental outcome for the Bay.

Second, even though the EPA has raised Virginia’s phosphorus allocation, they have also sent out a letter to the various Bay states requiring them to have plans with a high degree of accountability in place to meet the majority of their pollution reduction goals by 2017. According to press reports, the letter from President’s Obama’s Bay Czar, Chuck Fox, trumpets “a new era of federal leadership for the Chesapeake Bay, one that is marked by new accountability.” So, however Virginia chooses to address stormwater, it will have to do so in an environment of increased federal scrutiny.

In addition to stormwater, it is possible that the new Governor will have to address the issue of cash proffers. While many in and outside the business community recognize the need for infrastructure funding to support economic growth, they also recognize that the cash proffer system as it is practiced in some localities is drastically affecting the affordability of housing in Virginia. You will recall that in 2008, Senator John Watkins introduced Senate Bill 768 to repeal the ability of local governments to accept cash proffers and instead give them the power to charge impact fees on new residential development. While many in local government have advocated for impact fee authority, they were not supportive of this legislation as it contained caps on the fees they could have charged. The residential development industry, which has long been a foe of impact fees, would not support them without some sort of cap mechanism. While the bill went away, this issue has not. In fact, it has been the subject of much discussion in the Joint Commission Studying Development and Land Use Tools, which is chaired by Delegate Clay Athey, and it is possible that this issue will come before the General Assembly again.

A third issue, and one also being discussed by the Athey Commission, involves changes to the land use reforms that were a part of House Bill 3202 from the 2007 session. One of those changes is the requirement that localities establish Urban Development Areas (UDAs), areas designed to be the places where future growth would be focused. The intent is to promote more compact development patterns thereby controlling the cost of providing infrastructure, particularly transportation, to future neighborhoods and commercial areas.

As localities have worked to implement this requirement, concerns have emerged. For example, the legislation requires that localities make their UDAs large enough to accommodate 10-20 years of future residential and commercial growth at a minimum density of 4 residential units per acre and a commercial floor area to land ratio (FAR) of 0.4 (that means 17,424 square feet of commercial floor space per acre). Debate has arisen over the appropriateness of that minimum standard and whether the law requires that minimum density on every site or just as an average across the UDA. Resolution of these and other issues will be something that the new Governor and the General Assembly will have to tackle in a balanced, thoughtful manner if we are to retain our pro-business reputation and our competitive edge.

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