Category Archives: economic development

2018 Forum Watch Top 10

By. Neil Williamson, President

top ten listPerhaps the best thing that can be said about 2018 was it was not 2017.

As our community is still dealing with the very real ramifications of August 2017, The Free Enterprise Forum remained focused on monitoring local government, reducing regulatory burdens, promoting market based solutions, protecting property rights, and encouraging economic vitality.

None of this could be accomplished without the generous support of our donors and our regular readers. Thank you.  As we complete our fifteenth year of operation, we remain vigilant, and “pleasantly” persistent.

Each year, we select the top ten blog posts for our year in review.  There were many other blog posts that reached honorable mention status.  I would be remiss if I did not thank our Field Officers Brent Wilson (Greene County) and Bryan Rothamel (Fluvanna County) for their significant reportage in 2018.

With apologies to the now retired David Letterman, here are our Top 10 posts for 2018:

clip_image002#10 Greene E911 – “A Failure To Communicate”  “ …Representatives of the volunteer rescue squad and Fire Departments also addressed the Board of Supervisors. Their message was clear – we are getting “no clear supervision” and it goes back and forth who we are to answer to.

Several other citizens asked that the Supervisors have the courage to back up and revert to how E911 worked since 2012 and then have a committee analyze how best to address E911 services in the future. One of the final public comments was there seems to be “a failure to communicate” in Greene County”

#9 Lack of Infrastructure Investment Dooms Albemarle’s Neighborhood Model …”A funny thing happened on the way to Albemarle urbanization.  Elements of the Neighborhood Model of development [which had been sold as “A” model not “The” model] became part of the Albemarle County code forcing developers to put in curb, gutter, street trees and other Neighborhood Model “amenities”.  Developers built sidewalks interior to their development and Albemarle County has failed to connect the developments and thus failed to create the “walkability” they promised….”

#8 Is Charlottesville ready for Collins’ Affordable Housing “Marshall Plan”? “…At the end of the meeting, [Brandon] Collins presented a different pers

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Brandon Collins

pective on the reports.  He admonished City Council to think big.  If they are really serious about fixing the housing affordability issue, they should stop depending on developers; they should do it themselves with their existing Charlottesville Redevelopment and Housing Authority.  Collins’ “Marshall Plan” might include $140 million dollar bond issuance dedicated simply to the creation of new affordable units that will stay perpetually affordable. When pressed by Councilor Wes Bellamy how the city might pay for that debt service, Collins admitted he had not figured that out yet but thought it could be resolved.”

#7 Delta Response Team Rescue Headed to Fluvanna …Fluvanna County will start with a new contract ambulance service this upcoming year.Delta Response Team (DRT), headquartered in Appomattox, was selected after a Request for Proposal (RFP) process was completed by the county. It will cost the county $438,000 for 24-hour services. The county budget $600,000 for FY19.  “We are not here to make a career service,” said Susan Walton, president of DRT.

#6 Albemarle Rushes Rural Rights Reduction “…This proposal has sped through the County’s approval process faster than any in recent memory.  Their “need for speed” is not clear and an e-mail requesting more information has not been returned.

Throughout this speedy process, there has been significant discussion regarding the impact of this land use change on property values.  In testimony before the Planning Commission several residents suggested the value could drop by up to 90%.  One speaker indicated that a potential real estate contract is in peril because of the proposed ZTA….”

#5 Government Tourism Coup Will Produce Poor, Politically Palatable, Promotion and Pitiful Profitability “…So now that the tourist tax dollars have been properly collected and turned over to the government, who should be in charge of making the marketing decisions designed to generate tourism?

The industry or the elected officials?…”

See the source image#4 Top Gun, BRT, and The Dog Bone Roundabout “…The Free Enterprise Forum believes BRT is dramatically better than light rail, but we are not yet convinced that a mere two years after widening North US29, the community is willing to give up a lane on US29 for bus only access.  Since the jury is clearly still out regarding BRT, should we be planning this critical infrastructure piece with the station as the center?

In addition, the long term connectivity plan calls for roads to cut through Fashion Square Mall to connect to a new access road paralleling US29 and a pedestrian/bike bridge over US29 and that’s just the Southeast corner of the plan….”

#3 Parking Is Driving Charlottesville’s Future  “…  Prediction: In 2056, Charlottesville’s Market Street Garage and City Hall Complex will be razed to make way for a new Hotel and Conference Center.  There are two distinctly different paths to this prediction, economic dislocation/collapse [think Detroit 2013] or a capstone of a visionary community investment program – interestingly, parking will be a leading indicator on the City’s direction.

Please let me explain….”

#2 Over 1/3 of Albemarle’s Entrance Corridors Are Illegal “…The Free Enterprise Forum has learned that eight of Albemarle County twenty-one Entrance Corridors fail to meet the state requirements for such designation.  Some of these have been in violation since inception in 1990.  This revelation, made by staff, calls into question the legality and enforceability of any ARB conditions placed on properties along the eight illegal entrance corridors….”

and the #1 post for 2019  Albemarle’s RAIN TAX Bureaucracy “…Albemarle’s Stormwater https://freeenterpriseforum.files.wordpress.com/2018/03/no-rain-tax-logo.jpg?w=175&h=175Utility Program’s 10 year budget is $52 Million dollars But note there is no new department….Albemarle County’s program budget (chart below) shows that roughly 1/3 of every dollar generated by the RAIN TAX foes to these two line items.  That between $1.2 – $2 million dollars annually.   The Free Enterprise Forum contends absent this funding mechanism, those funds could be used for stormwater infrastructure if they were not being spent on administration and enforcement.

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But most of all THANK YOU, the readers and supporters of this blog and our work in Central Virginia.  Without your generous support, we would not exist, thank you!

BRING ON 2019!

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.

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Albemarle’s $5 Million ACP Mitigation & The Big Blue Marble

By. Neil Williamson, President

See the source image

The PBS series The Big Blue Marble was very popular in my elementary school years.  This program was ground breaking in presenting environmental (and social) concepts to children around the world including the interconnectivity of all natural systems to one another.

Based on recent actions, we are confused if Albemarle County considers itself part of the world’s larger interconnected ecosystem or an independent environment.

In their recent discussions of proposed stream health guidelines in the development area, Albemarle County seems to claim independence from the larger ecosystem –

9. Require that all stormwater treatment be conducted on-site or that any nutrient credits purchased are from a nutrient credit bank located in Albemarle County in order to qualify for special exceptions to zoning requirements, density bonuses, or cluster provisions,

Despite our recent post [Snow White and Albemarle’s Stream Health Incentives] highlighting the fact that currently no such nutrient credit bank exists in Albemarle County, staff contends this concept of “Albemarle Specific” Credits were critically important to the environmental community.

With this understanding we were perplexed by Allison Wrabel’s front page Daily Progress article [$5M in pipeline funds to support new Albemarle park] .

Though the Atlantic Coast Pipeline route does not cross through Albemarle, $5 million in pipeline mitigation money is earmarked for the future Biscuit Run Park in the county….Being in the route of the pipeline is not a criterion to receive mitigation funds, Deputy Secretary of Natural Resources Joshua Saks said…

Philosophically, the existence of the federally approved mitigation offer ignoring geographic specifics and Albemarle’s acceptance of such funds indicate an understanding and acknowledgement of natural interdependence.

The Free Enterprise Forum believes intellectual integrity requires that Albemarle County drop its isolationist environmental stream health demands and join with the rest of the world on our journey through space on our shared Big Blue Marble.

Respectfully Submitted,

 

Neil Williamson, President

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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 Credits:lermaster.weebly.com

Government Tourism Coup Will Produce Poor, Politically Palatable, Promotion and Pitiful Profitability

FORUM WATCH EDITORIAL

By. Neil Williamson, President

Local government is poised to cook the golden goose — tourism.

After a series of political moves over several years, local government, not the local tourism industry, is now in charge of marketing our community to the outside world; they honestly don’t know what they don’t know.

And they are about to become more powerful.

Please let me explain.

Imagine if your business was required to calculate, collect and turn over to the government additional taxes purportedly to promote the region and therefore generate more business for you.

That’s how § 58.1-3819. Transient occupancy tax (TOT) works.  This is the taxes paid by those who stay in a particular locality (Hotel, Motel, Campground, AirBnB, etc.) for the privilege of doing so.

So now that the tourist tax dollars have been properly collected and turned over to the government, who should be in charge of making the marketing decisions designed to generate tourism?

The industry or the elected officials?

The state code section seems to have an opinion about that specific issue:

….may levy a transient occupancy tax not to exceed five percent, and any excess over two percent shall be designated and spent solely for tourism and travel, marketing of tourism or initiatives that, as determined after consultation with the local tourism industry organizations, including representatives of lodging properties located in the county, attract travelers to the locality, increase occupancy at lodging properties, and generate tourism revenues in the locality. If any locality has enacted an additional transient occupancy tax pursuant to subsection C of § 58.1-3823, then the governing body of the locality shall be deemed to have complied with the requirement that it consult with local tourism industry organizations, including lodging properties.

The Free Enterprise Forum joined with many in the tourism and hospitality industry raising concerns when the elected officials changed the structure of the Charlottesville Albemarle Convention and Visitors Bureau (CACVB) Board from being industry led (a best management practice across the nation) to being led by elected officials and government employees.  The current Executive Board includes a representative from each elected body, as well as Charlottesville’s city manager, Albemarle’s county executive, an economic development staff member from both the city and the county and a representative from the University of Virginia and two industry representatives, one each appointed by the city and the county. This means currently two-thirds (66.6%) of the current board is elected or works for the locality.

The localities want this to change, they want MORE POWER.  Next week (12/12) Albemarle County will accept public comment on the proposed changes to the CACVB.

From their proposed proclamation:

WHEREAS, the County and the City desire to amend the Agreement to authorize two members of the Board of Supervisors and two members of the City Council to serve on the CACVB’s Executive Board and to making any corresponding changes to the Agreement as provided in the amended agreement attached hereto as Attachment A (the “First Amended Agreement”).

Regardless of the individuals in the positions, this means that marketing and advertising decisions will be made by a a board where 73% of the members are not directly involved in tourism (either elected officials or work for the locality).  Does this sound like the kind of consultation contemplated under State Code?

The challenge of getting officials to understand marketing outside of their world was made exceedingly clear in the October CACVB advertising pitch.  Allison Wrabel of the Daily Progress has the story

CACVB Interim Executive Director Adam Healey said that the campaign is aimed at 25 to 44 year olds in the Washington, D.C. area and Raleigh, Durham and Chapel Hill in North Carolina, who are looking for short or overnight trips.

“You are not always your customer when you’re doing marketing,” he said…..

…Board member Roger Johnson, Albemarle County economic development director, said he thought the same general concept, but with a regional brand that “wasn’t so Charlottesville centered” would be “better accepted by the folks in Albemarle County who are taxpayers” and the target group….

…Albemarle supervisors Diantha McKeel and Ann Mallek said they hardly saw the county mentioned….“It will be a surprise to no one that it took me seven years to get Albemarle on the logo and I’m not going to give it up,” Mallek said….

Many of the industry representatives on the board supported using “C’ville” in some fashion and said they thought the proposed campaign was a great start.

“In my mind, the C’ville six letters identifies the region,” said George Hodson with Veritas Vineyard & Winery, the county tourism industry representative on the board. “I think we can’t lose sight of the forest through the trees and kind of lead with our own baggage. C’ville identifies this region without saying Charlottesville.”

“Why try to gum up peoples’ mouths with phrases and long things that aren’t going to be marketable?”

The proposal is the groundwork of a good campaign, he said.

With the latest government expansion it is being made abundantly clear that the government, not the practitioners will control the marketing message.  It’s difficult for many to understand, the message that resonates to you (and your voters) may not be the message needed to attract young visitors with disposable income and free time.  If such decisions are left to municipal officials, it may be a very expensive lesson.

We believe this structural error goes against best management principles and is in conflict with the intent of the state code.  We believe the imbalance should be reversed, those who collect tourist tax dollars [and have a vested interest in their success] should have the ability to impact where and how the promotional dollars are spent.

In addition, many of the officials on the CACVB board wants to change the performance metrics away from hotel occupancy rates “Heads in Beds” to something else.  If the funding comes from those “Heads in Beds” shouldn’t that be the promotional focus and evaluation tool?

I really hope we are wrong about the officials’ CACVB marketing blind spots and the localities don’t waste millions of visitor (not residents) tax dollars in poor promotion.

If we are right, unfortunately, it will be the tourism industry that will first feel the pain of a poor, politically palatable, promotion producing pitiful profitability.

Respectfully Submitted,

 

Neil Williamson, President

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Neil Williamson is the President of The Free Enterprise Forum, a public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa  and Nelson County.  For more information visit the website www.freeenterpriseforum.org

Photo Credit: http://angielskidlakazdego.blox.pl/resource/goldenegg.jpg

Thankful, Hopeful & Skeptical in Charlottesville

By. Neil Williamson, President

In this time of Thanksgiving, I have so much to be thankful for; unexpectedly, the Charlottesville Planning Commission is now on that list.

Please let me explain.

Late in last night’s Planning Commission work session, after hearing the Free Enterprise Forum concerns with the proposed comprehensive plan and the land use map, as it existed prior to Saturday’s meeting, Chair Lisa Green asked that the map and narrative they created be shared with the 4 members of the public in attendance.  Each of us took photographs of the map and narrative with the understanding these are just drafts.

https://freeenterpriseforum.files.wordpress.com/2018/11/image2.png?w=208&h=310

Charlottesville Comprehensive Plan Map Draft Before Saturday (11/17) Planning Commission Matinee Meeting

comp plan photo 2

Revisions to Charlottesville Draft Comprehensive Plan Map from Post Planning Commission Saturday Matinee Meeting (11/17)

Comparing the two images, I see hope for increased intensity, AKA density, in many nodes.

Green expressed a desire for folks to read the narrative- something I refer to as the “Intensity Spectrum”.  Staff attempted to type in new language on the fly during Saturday’s meeting – that is the image below – it will undoubtedly change but we like the direction it is headed.

We again see hope in the draft language that was captured includes the verbiage “Missing Middle Housing”.  The previous version went from high to low with very little room for middle housing.

Comp Plan Photo 4

It is our understanding that the Planning Commission will see staff’s rendition of the changes at their regular December 11th meeting but the documents will have already been submitted for the December 17th City Council meeting.  The Planning Commission will deliver an incomplete update of the Comprehensive Plan, the Community Engagement chapter is not yet drafted and the Land Use chapter is not yet complete.

Council will provide their comments on the draft and it will return to the Planning Commission for further meetings and refinements (and completion of the two unfinished chapters).

While I remain a healthy skeptic waiting to see the devil in the details, I sincerely appreciate the direction and conversations about making the CITY of Charlottesville a “Welcoming urban environment for all people”.

So I am thankful for the Charlottesville Planning Commission for listening to the public AND sharing the draft output from their Saturday matinee session.

Happy Thanksgiving!

Respectfully Submitted,

Neil Williamson, President

Neil Williamson is the President of The Free Enterprise Forum, a public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa  and Nelson County.  For more information visit the website www.freeenterpriseforum.org

Fluvanna Seeks to Direct ZXR Commercial Growth Via Water/Sewer Fees

By. Bryan Rothamel, Field Officer

The Fluvanna County  Board of Supervisors have a blank canvas when it comes to Zion Crossroads, but it doesn’t own the land.

The vast majority of the land the new Zion Crossroads (ZXR) water system will service is currently zoned A-1 so it will require rezoning to allow commercial activity. The fear is the land currently isn’t expensive with a new water system, there could be an economic incentive to developing single family homes by right. This would be contrary to the economic development rationale used to justify the water system as the county spent the money to attract businesses, not more residential.water-bib_thumb.jpg

One way to discourage housing is finding a sweet spot with connection fees of the ZXR water system. Supervisors had a work session on November 7th to discuss strategies for the system.

The idea is connection charges would be higher than most localities but not the highest. Connection charges for a single family house would typically be absorbed in the cost of the house. But if the total connection is at minimum $16,000, that would be too large a percentage of an average home price in Fluvanna.

A large business wouldn’t bat an eye to the same cost. “That’s pennies or peanuts compared to their overall market studies,” said Wayne Stephens, ZXR water project manager.

Other options the county has is changing the comprehensive plan in regards to the community planning area.

“(The comprehensive plan) already talks about encouraging high density but we need to emphasize discouraging low density,” said Jason Stewart, planning and zoning administrator.

Also, county staff is working on minimizing the rezoning process including trying to make the

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Steve Nichols

county ordinance easier to navigate. The county attorney, Fred Payne, said some of that might make it easier for the average person but it might not stand up in court.

“Find a way to make it easy,” said Steve Nichols, County Administrator.

Fluvanna County will start using Municode, a program that makes the county code searchable. Currently the code is available on the county website via downloadable PDFs by chapter.

Supervisors are attempting to use all the tools at their disposal to make the Zion Crossroads area desirable to business and less attractive to residential.  The Free Enterprise Forum is not convinced making water and sewer hook ups more expensive is the right direction.  Generally speaking, we oppose using water as a growth control tool within designated development areas.

We do applaud the concept of  streamlining the rezoning process to make Fluvanna more business friendly and we sincerely appreciate the County Administrator’s clear direction, “Find a way to make it easy”.  We couldn’t have said it better ourselves.

The Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS® and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum

Dissecting A Decade of Data

By. Neil Williamson, President

Did you ever have a question gnaw at you?

Earlier this month, I attended the Charlottesville Area Association of REALTORS® Development Summit.  A panel of area developers were discussing Charlottesville Regional Chamber of Commerce’s recently released 2018 Jobs Report and attempted to correlate how job creation related to the local housing market.  Absent any specific data, the panel inferred the new jobs in the region clearly were one (not the only) driver of housing demand.

imageMuch like Timothy Hulbert’s inspiration for the first Chamber “Jobs Report” fifteen years ago, I knew this data set could be assembled and I set out to obtain this objective new housing unit data.

Reaching out to each of the localities (two required Freedom of Information Act (FOIA)Requests) we assembled the new housing unit data (2007-2017) and compared it on a locality basis the Jobs report data for the same study period.

We then compiled this data on a regional basis and found (or perhaps did not find) a most interesting correlation and perhaps an impending tipping point.image

As of 2017, the cumulative number of new jobs since 2007 is growing closer to the number of new housing units created in the same study period.

There is a distinct lack of correlation between the number of jobs created and the number of new housing units.  Even when the region was losing jobs in 2009, there were over 900 new housing units created [It was the lowest number of units in the study period].

This line of inquiry led to considering the other significant impacts on the housing industry beyond Jobs.  The enrollment at the University of Virginia for instance increased by 2,408 students from 2007-2017.  Regionally the population increased by 30,633 persons.  Overlaying The Weldon Cooper Center’s population estimates with our other gathered data started to prove the population demand driver.

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Examining the introduction of the population trend line leads to a number of new questions:

  • In 2007, just prior to the Great Recession, how many excess units existed before our study period?
  • If our regional household size is ~2.4 persons (US Census), then new housing units should equal 41.6% of the population growth.  In those areas with higher than 41.6%, likely have a lower number of persons in the household.
  • Considered on a locality basis, job creation does not have a direct correlation to new housing units.  We anticipate this lack of correlation is related to the relative ease of working in a different locality than you reside. Louisa and Orange Counties seem to have the closest direct correlation between job and housing creation.
  • Anecdotally, we continue to see an increase in the number of retirees relocating to the region.  While retirees are included in the Weldon Cooper population information, we have yet to find an objective metric to track this data separately.

Dissecting this decade of data (2007-2017), we again end up with more questions than answers.

But often, the best questions drive the best community discussion.

Respectfully Submitted,

 

Neil Williamson, President

Neil Williamson is the President of The Free Enterprise Forum, a public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa  and Nelson County.  For more information visit the website www.freeenterpriseforum.org

Fluvanna Recoups $99K from Schools Bond

By. Bryan Rothamel, Field Officer

The Fluvanna County Board of Supervisors are taking $99,000 of unspent middle school bond funds to reimburse the general fund.

In 2015, the board approved a Capital Improvements Plan project for $5.1 million for work being done at the middle school. But some of the projects approved were completed by Trane, the company who completed the energy performance contract. That left $99,000 of the school bond unspent. Bond counsel advised the supervisors could allocate the $99,000 to other work at the middle school, if desired.

The Board of Supervisors instead voted the second option the counsel offered, to take the $99,000 and reimburse itself for interest paid on the bond. That moves the money to the county savings, known as the general fund or fund balance.

While the book procedure is ‘repaying the interest,’ the $99,000 is in the unrestricted fund balance. And the supervisors can use the unrestricted fund balance as it desires.

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Chuck Winkler

School administrators have found a project more pressing than any other project the middle school needs. The S.C. Abrams building has gone through partial remediation for asbestos and mold. There are currently rooms that are unable to be used because of needed additional abatement.

“The [Abrams project] request is my top priority,” said superintendent Chuck Winkler.

The proposed projects at the middle school included flooring replacement in office and library and creation of a security vestibule.

“These other items are priority but they can come through the years,” said Winkler. He also mentioned items like the security vestibule could be available for grant funding.

Per bond counsel, the supervisors could only decide to do additional projects or reimburse the county. At a future meeting the supervisors can vote to expend the general fund as they see fit.

Other items the board approved during their August meeting included a Dominion Energy substation, authorization for a conditional use permit, and a budget transfer.

Dominion received approval for a substation in the Bremo Bluff area. The property is off of Route 15 and consists of 27 acres. High wires already cross over the land the substation will be built.

The authorization for conditional use permit is for Fluvanna County to apply for the permit in Louisa County. It is in regards to the Zion Crossroads water system because two properties that are affected are in Louisa. The friendly neighbors have waived the fees for the permit.

The facilities budget for FY18 was overspent by $75,000. Reasons were from several projects including reconfiguration of the Sheriff’s Office, ADA ramps at the Treasurer and Commissioner of Revenue’s building, excess HVAC repairs and more.

The facilities budget is under the purview of the Director of Public Works. Three other budgets he oversees were under budget by $78,000. They included public works, general services and convenience center.

The supervisors will next meet on September 5 at 4 p.m.

The Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS® and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum

Photo Credit:  Fluvanna County Public Schools

Pencils and Improving Charlottesville NDS

Adapted from Comments to Charlottesville City Council and Planning Commission regarding the NDS Efficiency Study 8/23/18

I sincerely appreciate the City providing the opportunity for public feedback on Neighborhood Development Services (NDS) Review  study. The Novak document is very complete and candid in its survey data regarding the department and the related approving authorities:

  • The Tree Commission has 75% positive impact
  • City Council has a 55% positive impact
  • The Planning Commission has 67% negative impact.
  • 71% did not believe the application submittal process worked well
  • a full 80% found the review process not easy to understand.

The recommendations in the Novak report do not exactly correlate with the identified issues are worthy of consideration but there are three critical components that are outside the scope of this report that must be addressed by Council to fix this broken department – Accountability, Reduction in Review, and Philosophical shift.

The report outlines a number of metrics that should be tracked to better understand, identify and fix areas of inefficiency. While laudable, absent 1 individual who will be held accountable to the targeted goals – this report will do nothing more than sit on a shelf. The Free Enterprise Forum calls for direct, individual, public accountability.

Reduction in review – Looking at the chart in the back of the report, is every level of this review necessary or are some of these items designed more to prevent the last bad thing, rather than encourage the next great thing? The Free Enterprise Forum calls for a reduction in application review items.

20180823_151742Philosophy – Several years ago, we provided the NDS Department (and other local planning departments) with pencils that outlined what we believe their marching orders should be. I brought the few pencils I have remaining to you all tonight.

The “Permit us to Permit you” philosophy does not cut corners on review nor approves everything that comes in the door. It is much more a mortgage broker mentality – this application process is tough, but I will help you, my customer, get through it. “The Permit us to Permit you” philosophy requires leadership and engagement – two areas, according to your efficiency report that are currently lacking in NDS. The Free Enterprise Forum calls for City Council and the Planning Commission to endorse NDS role in helping citizens gain needed government approvals.

Thank you for the opportunity to speak tonight, enjoy the pencils.

Respectfully submitted,

 

Neil Williamson, President

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Neil Williamson is the President of The Free Enterprise Forum, a public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa  and Nelson County.  For more information visit the website www.freeenterpriseforum.org

Affordable Housing Policy Makes Building Affordable Housing Impossible

By. Neil Williamson, President

Back in 2005, when Albemarle County instituted its 15% inclusionary housing regulation on all new residential rezonings, Overton McGee, then Charlottesville Habitat for Humanity CEO stated “It was a good first step”.  I was quoted in The Daily Progress “You just made housing less affordable to 85% of new home buyers”.    My larger economic point seemed to be lost on the reported but time has proven this paradoxical prognostication to be correct.

Please let me explain.

Considering the previous Habitat CEO’s position on mandated 15% affordable housing requirements, it is interesting what the current Charlottesville Habitat for Humanity CEO, Dan Rosensweig said at an Albemarle County work session last week.  From my Twitter feed:

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Recent news reports have highlighted the impact of inclusionary zoning.  The Economist Booming Seattle Struggles to Stay Affordable spoke of “the grand bargain”

Seattle’s proposed solution to this deadlock, unveiled in 2015, is known as the “grand bargain”. It would reduce restrictions and unleash building on big patches of city. In exchange, developers would have to reserve a few units for renting below the market rate or pay into an affordable-housing fund. Such schemes, known as “inclusionary zoning”, are increasingly common in progressive American cities. They can lead to more mixed districts and placate left-wing critics. But they are not without problems.

By reducing future earnings, inclusionary zoning acts as a tax on new development. If the affordability requirements are set too high, many new projects will not be built. Bill de Blasio, New York City’s progressive mayor, championed requirements that at least one-fifth of new units should be offered below the prevailing market rate. San Francisco sets the threshold as high as 30% and imposes a clutch of added “impact fees”. Developers complain that these fees suffocate all but the most lucrative projects—which then invite criticism as “luxury high-rises”.

Charlottesville and Albemarle County have heard the cry of building only high end product.  The perverse reality is that the affordable housing fees actually push against housing affordability.

Due to regulatory hurdles and outright prohibitions, there is a lack of price variety (and format) in the new products being constructed.  In Late July, Daniel Herriges of www.StrongTowns.org wrote of the oft mentioned ‘missing middle’ housing in his article “Why Are Developers Only Building Luxury Housing”.

Missing Middle housing—buildings containing anywhere from 2 to 19 units—can be a sweet spot when it comes to construction cost. Duplexes through fourplexes in particular are built in much the same way as single-family homes, but the cost of the land is distributed across multiple households. Even cheaper to build than a duplex or fourplex is an accessory dwelling unit (ADU). It’s no accident that a disproportionate share of America’s existing “naturally occurring” (i.e. without subsidy) affordable housing takes Missing Middle forms.

Unfortunately, we’ve pretty systematically outlawed the Missing Middle in many neighborhoods. Single-family homes are the only thing that can be built on 80% of residentially-zoned land in Seattle, 53% even in renter-friendly San Francisco, and 50% in Philadelphia, to name just a few cities. In suburbs, it’s common for over 90% of land to be zoned for single-family residences exclusively.

Robert Steuteville writing on www.CNU.org highlights the work of Dr. Arthur C. “Chris” Nelson of the University of Arizona regarding the market demand for the ‘Missing Middle’ housing:

This supply and demand mismatch is behind the need for “missing middle” housing, often built by small developers and builders. Meanwhile, the demand for large-lot single-family housing, the mainstay of the US building industry from the 1960s through 2008, is declining. Nelson’s research comes up again and again in discussions with thoughts leaders in small-scale urbanism. . .

. . .Nelson has been saying much the same thing for more than 10 years—yes, even before the housing crash—and he has been right so far. His numbers are based on demographics, demographic trends, market trends, and housing supply and construction data.

 

If we accept that the majority of the land available for development is designated to single family residential, and that there is a market demand for a different, more intense form of development, can regulations be relaxed to allow such increased density and perhaps increase the supply of missing middle (affordable) housing?

Over the last few years we have seen significantly more multifamily housing units come into Albemarle County Development Area housing mix:

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According to Adam Beltz of the Star Tribune, Minneapolis is now considering fourplexes as part of their affordable housing solution:

In a cityscape dominated by single-family homes, a proposal to allow four-unit residential buildings virtually everywhere in Minneapolis is stirring strong and conflicting feelings among neighborhood leaders.

A draft of the city’s updated comprehensive plan won’t be published until March 22 or completed until December, but the City Council and Mayor Jacob Frey were recently briefed on the high-level concepts, one of which is a historic rewriting of the zoning rules that would allow property owners to build fourplexes on any residential property in the city.

Middle Housing www.missingmiddle.com describes the fourplex as a medium structure that consists of four units typically two on the ground floor and two above with shared entry.  Typical unit size is between 500 – 1,200 square feet with a net density of between 15 to 35 dwelling units per acre.

How might such a proposal be received in the City of Charlottesville or Albemarle’s development areas?

  • How could reducing the regulatory requirements increase housing affordability?
  • Would increasing the developable area of Albemarle positively impact affordability?
  • Would relaxing Charlottesville’s Accessory Dwelling Unit (ADU) regulations assist in providing a bulwark against gentrification and revenue for the existing homeowner?

We find ourselves agree with Albemarle Planning Commissioner Pam Reilly who last week said, “We are lacking an affordable housing policy to guide our decision making”.

If the community wants to address the market need for affordable, accessible housing, policies and regulations should permit, but not require, the market to respond to consumer demand for denser development AND redevelopment without mandated affordable units.

Ironically, getting rid of the affordable housing mandate will make housing more affordable.

Respectfully submitted,

 

Neil Williamson, President

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Neil Williamson is the President of The Free Enterprise Forum, a public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa  and Nelson County.  For more information visit the website www.freeenterpriseforum.org

Photo Credit: www.missingmiddle.com

New Meals Tax on the Fluvanna Menu

By. Bryan Rothamel, Field OfficerSee the source image

The Fluvanna County voters will decide if the county adds a meals tax in 2019.

The supervisors unanimously voted to send the issue to the people. Staff and the county attorney will ask the circuit judge to include the measure on the November ballot.

“This is [a tax] opportunity we can take advantage of,” said county Director of Community and Economic Development Jason Smith.

Fluvanna currently only taxes residents by assessing personal property and real property. But non-residents don’t pay any taxes beyond the county’s portion of the state sales tax.

“Every time we go to all the towns, cities, counties [that charge meals tax] we help pay their taxes,” said Board of Supervisors Chairman Mike Sheridan (Columbia District).

There are currently 47 of the 95 counties in Virginia with a meals tax, including neighboring Louisa. Counties have the requirement of a referendum to enact the tax. Also, counties limited to charge a maximum of 4 percent. Only one county that has a meals tax does not charge the maximum.

Towns and cities are not required to have a referendum to enact the tax. There are 110 towns with the tax and all 38 cities have it.

If the referendum fails, the county supervisors can not bring it back to the voters for three years. County residents can petition to include a meals tax vote every year. Staff relayed it took Louisa three tries over nine years to get the measure passed.

“[The meals tax] helps us keep from having one of the highest [real property] tax rates in the area,” said Supervisor Tony O’Brien (Rivanna District).

The meals tax would be applied to any business that prepares food that is meant to be consumed immediately. This would include a grocery store that sells prepared food to restaurants to caterers operating in the county when the food is served. Caterers that prepare food in Fluvanna to be sold in another locality would pay taxes to the locality where the product is sold.

Businesses would be required to submit tax forms every month to the Commissioner of Revenue.

Staff projects based on the county size and the estimated 21 impacted businesses in operation, Fluvanna will bring in $300,000 to $600,000 a year.

If approved by the circuit judge, the item will be on the November 6 ballot. Staff has mapped out an education campaign to help get the item passed on the first try. Ideas include town halls and marketing.

The Free Enterprise Forum’s coverage of Fluvanna County is provided by a grant from the Charlottesville Area Association of REALTORS® and by the support of readers like you.

Bryan Rothamel covers Fluvanna County for the Free Enterprise Forum

 

Photo Credit: https://tax.thomsonreuters.com/