House Passes Proffer Limitations

Update Feb. 9: This article has been updated here.

The House of Delegates this morning passed a bill that Loudoun County supervisors and staff have fought since its introduction, and which would limit proffer agreements with developers.

Board members and county staff have made frequent trips to Richmond since this year’s session began to try to stop Woodstock Del. C. Todd Gilbert (R-15)’s House Bill 770, which was written by the Homebuilders Association of Virginia.

The bill limits the scope of proffers that counties can ask or accept from developers hoping to rezone and build. Supervisors say it would put the kibosh on creative deals like having Brambleton developers build a library in exchange for higher housing density.

Seeing no hope of defeating the bill, county representatives have instead focused on pulling its teeth, creating exceptions in the bill that protect Loudoun’s highest priority interests, including an exception for the tax districts surrounding Metro stations. As the county that accepts the most proffers in the state, Loudoun is the most vulnerable to the bill’s impacts.

Read more about the bill here.

“Do they understand that we actually have current applications for proffers that would help fund a university campus here in Loudoun, willingly offered by the developer, that this would make illegal?” asked Supervisor Ron Meyer (R-Broad Run) in a board meeting before the General Assembly vote. “Do they realize that stopping a university campus on the Silver Line would fundamentally disrupt our competitiveness, not only in the region, but nationwide?”

Meyers referred to an application that would construct a campus of George Mason University near Broadlands on Mooreview Parkway.

Among local delegates, Dels. Kathleen Murphy (D-34), James M. LeMunyon (R-67), Jennifer B. Boysko (D-86), and John J. Bell (D-87) voted against the measure. Del. J. Randall Minchew (R-10) abstained, and Del. Thomas A “Tag” Greason (R-32) did not vote.

Only Del. Dave A. LaRock (R-33) voted aye. He said the bill had been adjusted to watch out for Loudoun’s interests and reached a balance.

“We don’t want to make it impossible to develop,” said LaRock, who owns custom homebuilder LaRock Builders. “I think proffers in some areas can go as high as $60,000 per lot, and it can really become prohibitive.”

Asking too much in proffers, he said, drives up home prices and hurts the local economy.

“Every time we cause a developer to add another $5,000 or whatever to get paid in proffers, then that’s $5,000 he’s going to add to the home,” LaRock said. “If you have affordable homes, you can draw the workforce to the area that you need to expand business.”

The bill’s senate counterpart has been engrossed, which usually means a vote on the bill on the next day the General Assembly convenes.

3 thoughts on “House Passes Proffer Limitations

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  • 2016-02-06 at 11:29 am

    The BOS is not required to approve of any rezoning. Let them use discretion.

    However, I would direct folks to read Stanford economist Thomas Sowell regarding the effects of zoning laws. His research has shown that in places with less zoning (e.g. Houston, TX), housing booms and busts are all but non-existent. Housing never reaches the astronomical prices that result from restricted zoning. For example, take two different comparisons.

    1. DC vs Silicon Valley: DC is comparable to SF in terms of wages. We actually have a lot of high wage jobs that allow our residents to purchase such expensive homes. In the SF area, families have to purchase much more modest homes. They also have lots of land that is barren and could be developed, but strict zoning standards artificially restrict supply and elevate prices. DC is much more livable than SF.

    2. DC vs Charlotte, NC or Durham, NC: I wondered why the houses in NC’s tech/banking areas were just as large and nice as DC (in fact, they use brick for all four sides of the houses instead of just the front facade) but about half the cost. Materials don’t cost any less in NC. It’s simply because of land prices and proffers. These cities have high wage jobs but not the restrictive zonings.

    In Loudoun, we have two types of land. Restricted land zoned for residential with astronomical prices per acre. And agricultural land or land zoned for non residential purposes. The former is extremely expensive. The latter is not. The latter could be used to drop the price of houses enormously if it were simply zoned for houses. That would benefit everyone. But for some reason folks don’t understand this. And the law really doesn’t hurt “the developers” nearly as much as the Loudoun landowners in the latter category who simply want to efficiently use their property to meet the demand of new Loudoun residents. But saying this bill hurts Loudoun’s agricultural landowners doesn’t play as well politically as decrying those “evil developers”. Letournea/Meyers/Randall, did Pelosi teach you how to play the social classes against each other? You would make Bernie Sanders proud!

    How would it help? The average home price in Loudoun is ~$500K. A typical mortgage costs 5%. That means in addition to the $5K in real estate taxes they pay, they pay $25K in mortgage costs. If housing prices were lower (say $400K), your mortgage costs would drop enormously. If you save $5K on mortgage costs every year, we could all afford to pay an extra $2500 for roads, schools, etc. And you still save a good chunk from your lowered mortgage costs.

    Now, the current homeowners want to protect the high prices of their home. I understand that. But by rezoning for more houses, we prevent housing prices from moving higher. Anybody who wants to move up into a larger house or into Loudoun wins. We could then create more affordable housing for the non-tech workers (teachers, police officers, retail workers) as well.

  • 2016-02-05 at 5:22 pm

    How about the novel idea that maybe the Board of Supervisors need not actually approve every proposed subdivision that lands on their desk. If they were truly interested in improving the quality of life, roads, and schools, then stop packing in the vinyl sided blight. See how quickly the homebuilders start singing a different tune then. “We’ll sue!” Great! We just bumped up the salary of our county attorney 14 percent… it’ll keep him busy.

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