Cville PC Paradox — Build Less & Increase Affordability

FORUM WATCH EDITORIAL

By. Neil Williamson, President

The Charlottesville Planning Commission seems to believe it is above the immutable economic law of supply and demand as they draft a Comprehensive Plan revision calling for affordable housing while reducing the ‘by right’ building height (and capacity) across nine of the City’s thirteen zoning districts.

If this draft moves forward, it fundamentally shifts the planning paradigm and will likely cause significant harm not only affordable housing but also the overall economic vitality of the City.

Please let me explain.

A 2016 Comprehensive Housing Analysis study conducted for the City by Robert Charles Lesser & Company (RCLCo) found:

The Charlottesville region should not be a supply-constrained market.  However, two key factors are creating supply challenges within the City limits and in the close-in areas of Albemarle County and will continue to drive up home prices and rents:

  1.  Limited land available for new development within the City and close-in areas, driven both by the City’s small land area and built-out character and Albemarle County’s restrictive growth areas.

  2. A large affluent population that desires city living and can afford to pay higher prices for housing compared to the market today, which will continue to drive up land prices, home values and sales prices.

These two market impacts clearly are pressures on either side of the supply/demand curve.  Finance guru Al Erbam defines supply and demand succinctly:

The law of supply states that the quantity of a good supplied (i.e., the amount owners or producers offer for sale) rises as the market price rises, and falls as the price falls. Conversely, the law of demand says that the quantity of a good demanded falls as the price rises, and vice versa.

Given this reality, if the City wants to address affordable housing it would seem like it would be advocating for an increased supply of housing product in their Comprehensive Plan Update.

Per state code, all Virginia localities must review their mandated comprehensive plans every five years.  The goal of this review is to encourage localities to think beyond the near term and create a twenty year community vision. This document generally includes chapters regarding land use, economic development, population projections, affordable housing and environmental issues. While these chapters often have competing priorities, the goal is to provide the locality a guide for future development.

The 2018 Comprehensive Plan, as drafted, significantly reduces the residential carrying capacity of Charlottesville thus increasing price pressures on both existing and new residential and commercial units.

The Charlottesville Area Development Roundtable (CADRe) recently sent a letter to City Council and the Planning Commission outlining their concerns with the proposed nearly citywide downzoning.

The Planning Commission has not publicly stated the specific goals and planning principles informing their proposed changes in the City’s land use and zoning.  Their work thus far … appears to show a determination to “downzone” our downtown and virtually all of our urban mixed-use corridor areas.  Reducing building height and hence buildable area, would create impediments to addressing the City’s housing and workplace shortages, including the affordable housing shortage.

The CADRe letter included a most helpful chart graphically depicting the reduction in by right and “bonus” height compared to the current zoning regulations.

cville downzoning height chart

One portion of the Comprehensive Plan that we have not yet seen is the capacity analysis for future growth.  It will be interesting to see how this version’s capacity analysis (with these reduced heights) compares with the 2013 Comp Plan which stated:

Adding the by-right calculations together, staff finds that the City’s current zoning could accommodate approximately 10,000 additional residential units, or roughly 25,000 additional residents.

All of this ties into the 2013 Comprehensive Plan goal that stated in goal 5.5

Revise the Future Land Use Map so that it represents the desired vision for the City’s future,  Pay special attention to increasing the supply of affordable housing, increasing employment opportunities for all citizens, and encourage the development of mixed income neighborhoods throughout the City. Emphasis added – nw

The City Planning Commission can’t completely ignore the law of supply and demand.  Given the proposed downzoning, the commission must be transparent that its objective of restricting heights will reduce the city’s residential AND commercial carrying capacity. The economic impact of these proposals must be quantified to understand their import.  We believe these changes will harm the economic vitality of the region and significantly reduce housing affordability across all zoning districts.

The Free Enterprise Forum believes reducing existing regulatory barriers and, at a minimum, maintaining the existing allowable heights is the best path forward to improve housing affordability across all price points.

Respectfully Submitted,

Neil Williamson, President

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Photo Credit: 425business.com

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