The House Passes Its Reform Package

The House of Delegates has passed a package of 26 bills related to transportation and land use. Three will be held over for study and re-presented in next year’s session. The rest move to the Senate for consideration. It will be interesting to see which bills survive Senate scrutiny. Despite all the hoo-ha reported by the newspapers, many measures passed by lopsided margins.

There’s some good, bad and indifferent in the package. You won’t get much detail in the press accounts, though, so I have posted the House Speaker’s press release on the Bacon’s Rebellion website here. (I really, really wish he’d get a website and post his press releases so I could just link to them!)

The House leadership is touting the package as a bold leap forward. I would characterize it as a timid step forward — a step in the right direction, but partial and incomplete. Chris Saxman’s congestion-pricing bills (“The Swedish Solution“) aren’t included here. Among the more worthwhile measures:

  • Instituting quantifiable congestion goals into the road-approval process
  • Soliciting more private investment
  • Privatizing more VDOT functions
  • Allowing counties to assume control over maintenance of secondary roads
  • Bigger penalties for chronic abusive drivers.
  • Recategorizing VDOT roadways (primary, secondary, urban) based on functionality
  • Limiting the acceptance of new subdivision streets into the state system

I’m intrigued by the concept of Urban Development Districts but want to know more about it. I’m also less than enthralled by the $2.44 billion funding package — for the same reasons I’m less than impressed with the Kaine/Senate proposals for permanent tax increases. The system is broken. Why waste any more money on it until we fix it? These proposals represent no more than a useful start.

What’s significant, to my mind, is not the legislation itself as much as the paradigm shift that’s occurring in the House. The House leadership has broken decisively from the old tax-spend-build mentality and has established good strong themes — change the way VDOT does business, reform land use — in their place. As an institution, the House is now ascending the learning curve. Hopefully, delegates will prove receptive to even more radical departures from Business As Usual in the future.

For all its warts, the House legislative package beats what came out of the Senate and the Governor’s Office — the same warmed over tax hike proposals that were defeated this spring. I had expected as much from the Senate, but I’m disappointed, given his conciliatory rhetoric, that Gov. Kaine has taken such a passive role in embracing change.

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11 responses to “The House Passes Its Reform Package”

  1. I’m intrigued by the concept of urban development districts (as currently and sparsely described) as well. I’m even willing to support them if there is fair and accountable compensation for those who will otherwise be shut out.

    If the requrement for allowance for 100% of development demand for the next ten years is met, then it could be a godsend for developers, and a major setback for those that claim additional development results in expenses that incur costs to them.

    If, on the other hand. the requirement for allowance of 100% of development demand for the next ten years mean that all demand will be met there, then a lot of people willbe shut out,and there will be a huge transfer of wealth based solely on location or time.

    This would mean that Jim Bacon’s call for a plan that lets people live where they choose, provide they pay full locational costs, would come to an end.

    I see no difference between this and the massive shift of wealth that will occur if Tyson’s Metro is built with public dollars.

    What I want to see is a plan that is fair, transparent, verifiable, and accountable. Beyond that, I have no agenda, and could care less what the end result is, or who has control over it.

    If this is driven though in three days without any real discussion of what it means and how it will be controlled, then it will be a travesty of government and a triumph for those that want control without accountability.

    The mere fact that you are intrigued by it implies that there has been no where near enough discussion. The implication that areas will be required to identify urban growth districts capable of accomodating 100% of ten year growth is that areas will not be able to deny growth and thereby beggar thy neighbor. in such a case this will be seen as a win for developers.

    The implication that such areas be able to accomodate 100% of growth demand for ten years is that other areas will be denied growth, or at least that growth will be highly favored and subsidized in some areas over others.

    Without compensation for plans that benefit many at the expense of a few, there is no way that such a plan can be fair.

    No matter what happens, if this bill passes in three days, there will have been no where near enough discussion on the topic.

  2. Anonymous Avatar

    Without getting into the assets and liabilities, the urban development areas (UDA) called for in Delegate Athey’s HB 5094 is something that Frederick County, Virginia Beach, and the State of Oregon have been doing for some time. You draw a line and say within it, higher density is allow; outside and you are out of luck.

    Under that bill, every county would be required to designate one or more districts. The law states that the overall density within the district would be 3 units per acre or greater, would be the focus of residential and commercial development and principals of “new urbanism” would be encouraged. And the districts would likely be located adjacent to existing cities or towns.

    Unstated in the bill is the fact that the county would direct its water and sewer services within the area in order to facilitate the higher density. Although the patron stated that it was a typo, the bill also requires counties to take over road construction and maintenance in the UDA. Any UDA would be eligible to be included in any Urban Transportation Service Area designated under Delegate Frederick’s HB 5093. So both bill would have to be viewed in tandem.

    If a county also adopts the Urban Transportation Service Area concept, outside of such areas the maximum density would be limited to 1 unit per acre and it would be eligible to levy impact fees for schools and roads on existing by-right residential development. Within the UTSA the locality would be responsible for road maintenance.

    You were incorrect in reporting that the House approved these bills. Unfortunately, even the presence of the Speaker could not get the bills out of the House Counties, Cities, and Towns committee on Monday.

    While both bills embrace concepts that planners learn in their Land Use 101 course, each reflect their hasty drafting and have major problems. That is one reason why they will be studied and reintroduced if appropriate.

  3. Larry Gross Avatar
    Larry Gross

    As we all know by now… EVERYTHING is TBD until 2007 – but would point out that usually “work” for GA’s gets into high gear in the fall …

    with respect to UDA’s, I’m not sure I understand Ray’s agnst.

    It would appear that the logic is that ordinary Comp Plan designations of designated growth areas and even rezones are perceived to be unfair because they essentially create winners and losers.

    The UDA’s appear to me to be a continuation of the designated growth areas concept except that the state is encouraging and incentivizing a more uniform approach – to get localities to think about the required infrastructure that will be needed for areas designated for higher densities.

    Ray – are you opposed to the basic concepts behind designating some land for growth (while not designating other land for growth)?

    Do you believe that essentially there should be no distinction and that all land should be developable at a uniform density?

    … or is there something specific in the urban development proposal that I don’t understand that you object to?

  4. Jim Bacon Avatar

    Ray, you identified the precise issue that bothers me about the Urban Development District idea — it draws an artificial barrier and restricts development outside that district regardless of the merits of the proposed development.

    I have no problem with localities creating districts and limiting their investment of infrastructure to those districts. I don’t see that localities are under any obligation to make life easier for a developer who wants to build somewhere that the county isn’t prepared to support with an urban level of services. But if the developer is willing to absorb the costs himself, he should be be prevented from doing so.

    I would hope that the House would consider Ed Risse’s concept of the Clear Edge. What would make the Clear Edge meaningful is a change in tax status. Inside the Clear Edge, land would be taxes, not improvements, discouraging speculators from holding on to land and encouraging people to build. Outside the Clear Edge, the situation would be reversed: Farmers like Ray Hyde would be taxed less for extensive land holdings, but those who built housing developments in the middle of nowhere would pay a higher price. Such a structure would preserve the same incentives that Athey wants but does not mandate or require people to take actions they do not want to do. Furthermore, if a developer came up with a really great idea for a development in the boonies, he could always apply for the creation of a new Clear Edge enclave that would provide the tax treatment he needed.

    I think Athey deserves credit for thinking about these issues, although I think he needs to refine his ideas.

  5. Larry Gross Avatar
    Larry Gross

    As far as I know, anyone can make any rezone proposal at anytime and the county/city, by law, must schedule hearings on the proposal. This is Virginia law. The proposal must be considered.. even if there is no chance of a snowball in hell of it being accepted.

    What the Urban Development District is – is a carrot offered by the state to more formally designate “growth” areas beyond the Comp Plan and beyond the current zoning ordinances and maps and in return be allowed to assess impact fees for infrastructure.

    Think about this like you would for a jurisdiction to decide WHERE they might choose to extend water/sewer – as they are free to do right now.

    Extending water/sewer enables higher densities and most localities subsequently open up the land adjacent to water/sewer extentions to be able to be developed more densely.

    The problem with extending water/sewer and raising densities – from an infrastructure perspective is how to recoup the other necessary infrastructure that will be needed for higher density development – namely roads and schools.

    Water/Sewer is already taken care of because most localities assess an “availability” fee to offset the infrastructure costs.

    What the state is offering is the equivalent of road and school “availability” fees for the development district.

    Note also – that NONE of this REQUIRES the jurisdiction to only build mixed use developments. They could (and do) extend water/sewer, assess the impact fees (allowed by UDDs) and approve massive residential-only proposals and still continue to segregate commerical into their own separate land areas.

    If I’ve said something incorrect, please correct it.

  6. Anonymous Avatar

    I think that Mr. Hyde has hit on a point that troubles some. Outside the UDA, there is a possibility of a taking and that is where the concept is in trouble in Oregon. While it is more complex, the voters there approved an initiative that requires localities to pay landowners who want to develop at higher densities than are allowed outside the line.

    Another potential problem that reared its ugly head in Loudoun is higher densities within the UDA that some current residents see as NIMBYs – townhomes, mixed uses, etc. where lovely single family residences exist.

  7. Toomanytaxes Avatar

    The problem continues to be the imbalance between the winners and losers when development occurs — or doesn’t occur. Until this issue is addressed fairly (on all sides), the battles will continue.

    We seem to have great inconsistencies within Virginia. Sometimes, a person cannot make any development on his/her land and others benefit without payment. In other instances, people are permitted to develop their land and pass along the costs to everyone else.

    We need to understand who wins and who loses in the development game. Then we need to start looking at fair solutions that balance the costs and the benefits. The existing system is broken.

    At least the GOP in the House and Governor Kaine have attempted to begin to address the issue. No one has solved the problem, but at least they are trying.

  8. Larry Gross Avatar
    Larry Gross

    Let me offer how my home county – Spotsylvania is currently approaching this dilemma.

    It’s obviously one method and not the only answer but it does point out that even without new law – that there are some strategies that localities can adopt.

    The basic land-use almost county-wide in Spotsy is low density even areas where water/sewer availability exist and almost all uses require a special use permit.

    They want developers to come forward with higher-density proposals so that they can then enter into negotiations for proffers to pay for infrastructure. They primarily do this for commercial and the way that commercial developers end up providing the proffers for infrastructure is through the use of CDAs where the subsequent owners and leasees pay an extra tax assessment until the infrastructure is paid off.

    The developers have also proposed genuine mixed-use developments which the county IS considering but pay very close attention to the traffic impacts and what the developer is proposing to mitigate the impacts.

    As far the “fairness” issue of land development…. come on folks… do people who own stocks think it is “unfair” that a government action was taken that ended up favoring one company over another or vice-versa?

    Who said that if a person bought ANYTHING as an Investment – that they would be guaranteed Equity and Parity?

    If you own/buy land as an investment, you have the same responsibility as someone who buys stock and that is due diligence with respect to your purchase.

    If you want to make money with land – do what all successful developers do – do it as a business.

    Are we advocating that whenever a county/city takes an action that results in increasing the value of someone’s land that.. it is, in effect, a “taking” of those whose land did not also increase in value.

    So.. if a jurisdiction extends water/sewer… the landowners who did not get water/sewer extended to their properties have suffered a “taking” and are due compensation?

    please explain if I have this wrong.

  9. There is a difference between the government issuing regulations that affect the value of your stock and the government simply taking the stock.

    If you buy land that has the potential for ten lots and the government reduces it to two, then that is equivalent to taking your stock. If the government says, OK you can keep your ten lots but you must make a $25,000 contribution to the community for external costs those lots will cause, then they have reduced the value of your stock, but you still have the stock, and you can choose to incur the expense or not. If they just take the building rights you have no choice.

    If you buy land that has potential for five lots and you go ask to rezone for a hundred, then that is different.

    If the government says you must make a one million dollar contribution, then they have effectively eliminated the value of your stock without actually taking it. This is the thief saying you can keep your money, but if you try to spend it in anybody’s store but mine, I’ll kill you.

    Those proffers and impact fees are used to “buy” the amenities the community claims to “provide”. They are as much a gift from the developer to the community as they are from the community to the developer. If the landowners are required to pay for the amenities the community provides, why shouldn’t the community pay for other amenities that it takes and doesn’t pay for?

    The situation where almost all uses require a special use permit is a blatant misuse of what zoning was intended to do. And when the situation exists that some people will have not a snowball’s chance in hell of getting ANY use approved, then that is equivalent to requiring a million dollar proffer. It is dishonest. It is an attempt to make a taking look as if nothing happened. Since the areas that haven’t a snowballs chance are not specifically stated anywhere, it amounts to a growth boundary like redlining, and it ought to be illegal, just as redlining is.

    It took the people in Oregon thirty years, but they eventually realized what was going on and stopped it. They turned the clock back and said that any regulation that was put in place since you acquired the property amounts to a taking: you have two years to file a claim, and if you don’t, then the regulation is reapplied to your property. Going forward, any new regulations may only apply to properties that change hands after the regulation goes into effect, else it amounts to a taking, and the owner can make a claim. The government can either pay up, or waive the regulation.

    If you bought land with the rules already in place, then you knew what you were buying, so tough luck. The government has explicitly defined what a taking is and isn’t, and it is tied to the conditions when the deed is recorded. The county takes upon itself to record the deeds, and they should record the conditions allowed and not allowed as well. It is the government’s job to protect property, not steal it, and this arrangement is fair on both sides.

    The snowball’s chance in hell problem has become a national issue. You cannot sue until all your administrative remedies have passed. In practice that means that you must apply for every conceivable use and be turned down on each of them before you have standing to sue. A bill is now in congress to fix that, for the third time. The rules concerning takings would also be changed and Larry’s argument that there are no takings would then fail as a matter of law.

    In Fauquier County, the government simply eliminated many building rights, then they turned around and offered to buy the ones that remain. Such an offer can only mean that the previous building rights were stolen. I can’t see any way that the county can talk its way out of that ethical dilemma. What is even worse is, that having bought valuable building rights, the county then gives them away, probably in violation of their own excess or surplus property rules. This arrangement is fair on no sides.

    Whether you define a growth boundary with a line on the map or with different tax rates or with unstated special use denials that process is fundamentally unfair. A two tier tax system is the worst of all worlds, and it is another way of getting what we want unfairly without admitting what is actually going on. I love the farm, but I’d rather pay full tax rates and have full rights than have some token reduction (which is really only passed on to others anyway) and have the rights eliminated.

    If it is a matter of costs, then set a price and get out of the way.

    If it is a matter of timing or growth that is “too rapid” Then set a price that varies over time to give an incentive to those that defer for the good of the community.

    But if it is a matter of “This is what we want” then the community needs to pay for it and not simply hold people hostage until they collapse from fatigue or the inevitable family emergency. It is unfair for the government to play hardball with mortals when the government is eternal. Pursuit of Life, Liberty and Happiness and all that, you know.

    What I see is that people are disingenuously nattering about costs as a red herring when that isn’t the issue at all. If it was the issue then they should be willing to set a price and be done with it. And that price should be in cash and realistically related to the costs.

    In Fauquier, the price is not only unrealistic, ($77,000 was one recent “request” for a proffer that made national news), but that is only part of the deal. They also want a conservation easement on 85% of the property. This has got got nothing to do with costs of the development that occurs, but is simply a case of “This is what we want.” It is also a means by which the “we”, meaning those in power today, can extend their authority in such a way that it usurps the authority of subsequent administrations by placing much land use in control of an unelected, unaccountable government.

    Sugggesting that developers pursue rezoning as a business with no way for them to judge the costs or timing, or even the likelihood of success is just cynical. I believe that such approaches and excesses such as we see in Fauquier will result in changes that we might not like, and the bill pending in congress, again, could be an example. If it happens Fauquier will have itself to blame, because a Fauquier lawsuit is central to the issue.

    MAYBE, there is a case to be made that some costs are higher if development occurs away from the growth areas. Fine, assess those separately to the extent they can be verified. BUT, it is also likely that at some level of density the costs go back up again, and those costs should also be assessed separately.

    That implies that there is a least cost density, and yes, I believe that should be the default, uniform allowance. But, even when there is a default allowance, it is then reduced according to steep slopes, streambeds, and other regulations. There should be a corresponding giveback or increase in density on the remaining areas such that the average density does not exceed the default value.

    But this isn’t the case. Where those rules are imposed subsequent to the land acquisition, they amount to a taking. And again, these “environmental” rules are subject to abuse, they are being cynically set higher than necessary in order that we can get what we want at no cost.

    What I suspect the case is, that the urban districts requirement is being proposed to prevent exactly what has occurred in Fauquier. They first defined service districts where growth was to be directed. They were to be equal to 15% of the county. Then they proceeded to spend the next thirty years avoiding providing the services, foisting the costs off on the developers, fighting density within the districts at every opportunity, and reducing the size of the service districts.

    Eventually they will have reduced and built them to the point they can say, hey, the county is built out: no more growth, ever. And that is exactly the cynical point of all the regulations they have passed.

    They are even trying to place conservation greenbelts around the service districts. This is utterly stupid, and a perfect example of placing conservation areas poorly in such a way that they will lead to still more leapfrogging, just as EMR has said.

    I find Larry’s argument to be unpersuasive, circular, cynical, and self-defeating. What is really comical is that land use regulation advocates in Oregon have followed Larry’s approach, and been shot down in court. Hey, they said, you can’t let my neighbor build retroactively; I bought my property with the understanding I would always have this view (because his rights were restricted retroactively). And that of course is the argument that led to the referendum in the first place. So the issue boiled down to what do we use for a start date for when we agree to stop beating our wives and neighbors.

    The argument is self-defeating because the rules create a situation where only the commercial developers can play, and the only way they can be successful is by creating exactly the sort of dense developments we can’t stand. They happen all at once and make huge instantaneous demands on the community, even if they are covered by proffers.

    But TMT’s observation is correct.

    “We seem to have great inconsistencies within Virginia. Sometimes, a person cannot make any development on his/her land and others benefit without payment. In other instances, people are permitted to develop their land and pass along the costs to everyone else.”

    Even the inconsistencies have inconsistencies: I can’t seee any reason that one house in the middle of nowhere should be treated the same way as a 400 unit development in the middle of nowhere. If I build one house, well the school bus goes by here anyway, but if I build 400, then we need several more buses, or maybe even a school, and that’s a different issue.

    Those inconsistencies result in unfairness. Unfairness is dishonesty, and dishonesty is stealing. I think we have a right to expect better than that from our government, and from our neighbors.

  10. Toomanytaxes Avatar

    Ray – we may live in the same state, but we live on different planets. Fauquier County takes a very different approach to land use than does Fairfax County under the same statutes. More important, those different approaches seem to be hurting people, but in different ways.

    I also think that we have trouble with PEC & the smart growth people for different reasons. I’ve come to believe that they want to preserve what they like in Fauquier by forcing more growth into Fairfax County. It wouldn’t be so bad if Fairfax supervisors would address the infrastructure issues, but they don’t except to leave their constituents with a declining quality of life and higher property taxes.

    A good friend of mine asked me whether I agreed that preserving the beauty of places such as Fauquier County was important. I replied “not if the cost is further diminishment to my quality of life and higher taxes.” I don’t think that I alone anymore in my feelings.

    As you have correctly stated, Virginia needs more places.

  11. Right. Fairfax is one of those places where some people can develop and pass the costs to others. Fauquier is just the opposite. Both of those extremes cause costs to be transferred unjustly.

    Preserving the beauty is important, but it is more important to do it fairly. It is as important to preserve the people and their lives as it is the land, and development does not have to be ugly or ubiquitous. Planners here seem to have forgotten that.

    You are right. A lot of smart growth and new urbanism depends on excessive government control and a process of beggaring thy neighbors. We can never have what we can best afford if we don’t let the costs fall as they may. That includes Fairfax development, Faquier farmland, housing prices, conservation and park land.

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