Proffers: They’re Baaaaack!

Gentlemen may prefer blondes but localities prefer proffers.  A proffer is an arrangement between a locality and a land developer whereby the developer offers something of value in order to get a rezoning request approved.  Why do developers want land rezoned?  For residential development they want to build more homes on the land than the land’s current zoning allows.  Why would localities object to these rezoning requests?  Theoretically, the locality’s strategic and financial plans are based on providing services at an overall population density dictated by the current zoning.  Adding more density increases the locality’s costs for services like public schools.  Localities are understandably worried about the unfunded mandates that up-zoning can cause.  How do proffers help?  Items of value (money, land, astroturf, etc) are given to the locality by the developer in order to fully or partly cover the additional costs to the locality of development at higher density than was planned.  These proffers reduce the developer’s profit margin on the project at hand so they are not popular with the development community.

Problems with proffers.  On the surface, proffers seem like a reasonable way for localities to recoup some or all of the additional costs of a rezoning to higher density.  However, while most localities have rough guidelines for establishing proffers these guidelines are imprecise.  They have to be imprecise since a fair proffer depends a lot on the specific parcel of land to be rezoned.  Localities and developers end up negotiating proffers on a case by case basis … with some odd results.  In one case a developer provided new artificial turf to Stafford County high schools as part of the proffer.  Developers found the process to be time consuming and expensive.  But where could the poor, downtrodden members of the besieged land development industry go for redress of their grievances?

Enter the General Assembly.  The real estate and construction industry is the largest donor (other than PACs) to Virginia politicians.  In 2018 – 2019 real estate / construction donated a whopping $5,650,858 (as of this writing).  Across all the years that VPAP has kept records (since 1996) the real estate and construction industry has lined the pockets of our elected officials to the tune of $148 million.  These guys make Dominion look like slackers.  In 2016 the Virginia General Assembly was only too happy to help their good friends in the real estate and construction industry.  After all, why should developers pay for the costs they create when there is still plenty of money in rattling around in taxpayers’ pockets for stuff like that?  SB549 – Conditional zoning; provisions applicable to certain zoning proffers was put forth by chief patrons Mark Obenshain, R-Harrisonburg, and …. wait for it …. Dick Saslaw, D-Fairfax.  Over the years Mark Obenshain has taken in $531,643 from real estate / construction while Saslaw has $982,649 on his tally.  Yes, these two state senators have accepted 27% of the money given by real estate / construction interests since 1996.  Obenshain and Saslaw had 1,514,292 reasons to get rid of those damned proffers.  The legislation passed the General Assembly and was signed into law by former Governor Terry McAuliffe (who took in $4,129,194 from real estate / construction for his campaign to be governor and no doubt will be back for more as he tries to occupy the Oval Office).

D’oh!  The reaction of the localities was as swift as it was predictable — rezoning approvals slowed to a trickle.  Our General Assembly learned for the umpteenth time how difficult life can be for those who are simultaneously greedy and dim-witted.  Development shifted to land parcels where the existing zoning would allow for profitable construction, namely rural and exurban areas.  Areas that often could not afford the costs of development without proffers.

Send lawyers, lobbyists and money, Dad, get me out of this.  Bob Thomas, R-Stafford, is a newly elected member of the House of Delegates from the George Washington District in Stafford County.  Thomas is an ex-Marine, technology entrepreneur and former member of the Stafford County Board of Supervisors.  In 2017 he won his HoD election by 82 votes with real estate / construction as his biggest non-political donor industry.  Does anybody see a pattern here?  Thomas was the chief patron for 2019’s HB 2342 Conditional rezoning proffers; extensive changes to conditional zoning provisions.  This bill essentially undoes the 2016 legislation.  However, developers haven’t made all those campaign contributions in vain.  The new bill restricts the proffer to covering costs directly attributable to the specific construction project at hand.  No more new astroturf for the local high schools.

— Don Rippert