Category Archives: economics

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 ARB Expansion on a Shaky Foundation

By. Neil Williamson, President

See the source imageIf you have limited resources and a house with faulty plumbing, foundation issues, and a leaky roof, would you fix the existing house or expand it?

Indirectly, that is the question before the Albemarle County Planning Commission next week (10/30) as they consider further expanding the number of roads that are considered ‘Entrance Corridors’ and thus subject to additional review by the Architectural Review Board (ARB).

Late in January, we learned that over a third of Albemarle’s twenty-one entrance corridors are illegal.  At first we were encouraged when a Resolution of Intent to remove the impacted roadways appeared on the Board of Supervisors consent agenda, this positive energy was very brief as the item was removed from the agenda and never heard from again.

On top of the illegal roadways, members of the ARB have been discussing the need for a comprehensive update to their guidelines some of which were last revised in 2011.  The fuel pump canopy requirements have not been adjusted since Bill Clinton was president (1998).  The guidelines include specific language directed at “trademark” designs:

State law and County ordinance both require that the ARB approve only those proposals which reflect designs which are compatible with the historically significant architecture of the County of Albemarle and City of Charlottesville.  It is not intended that proposed designs mirror existing historic structures in the area. Replication of historic structures is neither required nor desired. However, developers proposing “trademark” designs can expect that significant modification will be required by the ARB before approval will be granted.

This language was used by one ARB member (in the minority) to advocate a proposed Pantops gas station’s fueling stations should be located in the rear of the building outside of the view of passing traffic (cars).  Correctly, the applicant pushed back that this would be a significant competitive disadvantage considering all the other gas stations on US 250 with pumps in front of their locations.

So into this mess, the Planning Commission wants to expand the purview of the ARB to include Rio Road East/John Warner Parkway.

Back to our house analogy, the problem is varied responsibilities of the three entities involved.

  • The Board of Supervisors, who has the checkbook, has not prioritized fixing the illegal entrance corridors See the source imagechoosing instead to “not enforce” the regulations. Similar to a family not using the hallway bathroom, this merely solves the leaky toilet symptom without fixing the plumbing problem.
  • The Board of Supervisors, via the Community Development Work Plan, has not dedicated resources to improving the Entrance Corridor Guidelines to have them better mesh with market practices and ARB precedents.  In our house analogy, the roof only leaks when it rains and it does not rain all the time, therefore I will not fix the roof.
  • The Planning Commission, empowered by the Board of Supervisors, will race forward with additional regulation the creation and enforcement will further impact limited staff time in order to expand the power of the regulators over additional property.  Let’s expand, rather than repair, this old house.
  • Interestingly it is the members of the ARB who are the semi tragic figures in this epic drama.  Absent Supervisor action, the ARB is impotent to modify the area or the outdated regulations that they are charged with enforcing.

Despite the fact that some of the reforms we advocated for in our 2010 ARB analysis The Eye of The Beholder report have occurred, the dire need to repair the existing ARB jurisdiction and guidelines far exceeds the expansionist desires of the Planning Commission.

Respectfully submitted,

 

Neil Williamson

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 Hanna Barbara Scooby Doo

Fluvanna Supervisors Hear Property Assessment Results

By. Bryan Rothamel, Field Officer

Last week, (10/3) the Fluvanna County Board of Supervisors were briefed on the latest mass appraisal of real property performed.  The City of Fargo has a concise definition of this process:

Mass appraisal is the systematic appraisal of groups of properties as of a given date using standardized procedures and statistical testing. This differs from single-property appraisal, commonly referred to as “fee” or “bank” appraisal, which normally deals with only a particular property as of a given date.

Pearson’s Appraisal Service performed an appraisal this year, the first by the company in Fluvanna. Overall, the county saw an average increase of 4.7 percent increase across the county limits. However, inside Lake Monticello only increased 3.4 percent.

Representative from Pearson explained all assessment decisions were based on data from sales.

Lake Monticello vacant land had a decrease in assessment by 15 to 20 percent. Because the subdivision is nearly built out, most undeveloped property is not desirable.

The public utility infrastructure was also reassessed and goes effective immediately. The Commissioner of Revenue estimates that will bring in $83,000 of additional revenue. Those funds will increase the FY19 collection.

Notices of new tax values will be mailed to all land owners and Pearson will be available to discuss the new assessment.

Also at the October 3 Board of Supervisors meeting, supervisors approved two change orders to complete the E911 radio project. The last two changes needed an additional $26,500.

The county’s animal shelter services are handled by Fluvanna SPCA. Despite the county only contributing for 50 percent of the operational costs, the county’s shelter takes up 75 percent of the FSPCA. To help alleviate some funding issues, supervisors approved a supplement of $35,000.

FSPCA and the county operate on a contract services. In future years, FSPCA will present a budget that supervisors can go over with FSPCA officials during the budget season.

Supervisors approved creating an employee ladder system in the E911 operations center. The FY19 fiscal impact was $10,000. Over the last few years county administration has worked at creating mobility options in the organization chart of departments to allow employees to get promoted. Previously employees would have to either wait to become a department head or leave for a bigger organization with a larger chart to fill.

Supervisors will next meet on October 17 at 7 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 SPCA

The Hindsight Report Back in the News

The Free Enterprise Forum’s 2017 ‘Hindsight’ Report was mentioned in Allison Wrabel’s  Daily Progress  article this morning. 

For context, we are reposting our original post on the topic.  The Free Enterprise Forum welcomes the community discussion of the agreement.

By. Neil Williamson, President

Often the most enlightening questions start with, “What if?”

Working with co-author Derek Bedarf, we looked at developing empirical data to answer the question, “What if Charlottesville’s annexation was successful compared with the results of the negotiated Revenue Sharing Agreement?”

After significant research and deliberation, it was determined that this information was available but not assembled in a manner that made such calculations easy. Utilizing Geographic Information System (GIS) technology for the real estate assessment data and 15 years of Albemarle County budget documents for the other taxes (sales taxes, consumer utility taxes, business taxes, motor vehicle licenses  and prepared food and beverage taxes.  Other taxes excluded from this study, for a variety of reasons, include utility consumption tax, short term rental tax, clerk fees, transient occupancy tax, penalties  interest, and audit revenues), The Free Enterprise Forum calculated the tax revenue generating power of the study area.

The resulting “Hindsight Report” examines the tax generating power of the proposed annexation area as it compares with the revenue sharing payments.

  •  The Hindsight Report indicates that over the study period (2001-2016), Albemarle County received, from the study area, over $277 million in local tax revenue compared with the $212.9 million revenue sharing payments made to the City of Charlottesville (+$64.1 million).

  • Had Charlottesville been successful in the annexation and the revenue sharing agreement not been in place, the City would have received $304.7 million in tax revenue from the study area during the study period compared with $212.9 million in revenue sharing payments from Albemarle County (-$91.8 million).

 

  • During the study period, study area property owners paid $72 million less in real estate taxes by being in Albemarle instead of the City of Charlottesville. This “Non-Annexation” Dividend averaged saved (Albemarle) property owners between $3 million and $4 million annually topping out at $6 million in 2007.

The question the data does not answer is whether the Revenue Sharing Agreement was a good deal for all involved.  This is a subjective question that can only be answered in context.

At the time, the historical record suggests annexation was a very real threat and revenue sharing negotiations were heated.

The historical public record also shows many citizens at the public hearing raising some of the same questions regarding equity and fairness that remain part of the discussion today.

Was it a good deal?

Hopefully this data will help you decide.

The Albemarle County Board of Supervisors is scheduled to discuss the Revenue Sharing agreement during their second August meeting on Wednesday August 9th.

Founded in 2003, The Free Enterprise Forum is a privately funded, public policy organization focused on Central Virginia’s local governments.

The entire Hindsight Report can be accessed at www.freeenterprisefoum.org under the reports tab.

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.

Greene County Recommends Water Fee Change

By. Brent Wilson Field Officer

The short story is monthly water bills are increasing in Greene County.

The longer story requires understanding the political workings and billing rationale of the  Rapidan Service Authority (RSA).

Statutorily, the RSA Board, not the Board of Supervisors, set the rates for water and sewer.  Politically, the members of the RSA Board include two members from each locality (Greene, Madison, Orange) who are appointed by their respective Board of Supervisors for four year terms.   Thus, the RSA Board generally does whatever the locality asks.

Currently, RSA charges a Facility Fee of $20 per month for each water hook up. This results in a single family residence paying the same as a larger commercial establishment (Restaurant, Retail, Hotel, etc.) – regardless how much water each consumes.

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Brenda Garton

When an account establishes new RSA water service, a determination is made regarding the anticipated water use of the account and the “hook up fee” is calculated based upon the anticipated use/dwelling unit use.  In most cases, commercial users pay a multiple of the Dwelling Unit (EDU) dependent on use.  A restaurant may require 5 EDUs, while a chiropractor’s office is only 2 EDUs.  Each year, annual water consumption is audited to determine if the proper EDUs have been collected.

At the September 28th Greene County Board of Supervisors meeting Interim County Administrator Brenda Garton, proposed having the commercial users be charged facility fees based on how many EDUs are purchased for each location in order to make the facility charge more equitable to consumption.

Further, Garton recommended that the Greene Supervisors request RSA to increase the Facility Fee to $30 effective July 1, 2019. Chairperson Michelle Flynn (Ruckersville) agreed that both issues should be acted upon and forwarded to RSA so that RSA can act upon them at the same time.

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Michelle Flynn

Flynn asked Garton how quickly RSA would be able to make both changes. Garton estimated 2-3 months as the soonest but felt they would be accomplished by January/February, 2019 at the latest.

Flynn wanted to be sure to have ample time to publish the increase to give the public plenty of notice of the increased fees even though this issue has been discussed for months. Supervisor Bill Martin (Stanardsville) credited Garton with getting this project back on track and that the increased revenue will go to paying for existing and future debt of the water project.

Garton stated that RSA will have to have a public hearing to approve the two rate changes proposed.

Supervisor Dale Herring had a final question – the revised fees only apply to water – not sewer?  Garton confirmed that this was the case. The board unanimously approved that a resolution be sent to RSA.

Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.  The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at http://www.freeenterpriseforum.org 

Photo Credit: Greene County

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/

Is Charlottesville ready for Collins’ Affordable Housing “Marshall Plan”?

By Neil Williamson, President

Former Charlottesville City Council candidate and Public Housing Advocate Brandon Collins is energetic and passionate, but he is rarely described as optimistic or even jubilant.

Late in Monday night’s (6/18) City Council meeting he was both as he called for Charlottesville to give up on developer incentives that produce precious few affordable housing units and instead launch a “Marshall Plan” for affordable housing to meet the current shortfall of 3,318 units.

Please let me explain.

Council received two important, somewhat disconcerting,  housing reports.  Prepared by Partners for Economic Solutions, the housing needs assessment was blunt in its analysis of current and projected market conditions.  It concluded that the city had a current need for 3,318 affordable units, growing to 4,020 units in 2040. The reasons for these conditions were summarized:

The forces creating this affordability crisis and impeding fair and affordable housing include:

• The city’s constrained supply of developable land supply limits the potential for new residential construction.

• More than 200 year-round housing units have been diverted to short-term transient rentals through Airbnb and other leasing services.

• High land and development costs limit the market’s ability to build new units that could rent at levels affordable to households at less than 60 to 80 percent of AMI.

• Federal funding for construction of new affordable housing and for Housing Choice Vouchers has not kept pace with the growing need. Public housing funding to the Charlottesville Redevelopment and Housing Authority includes almost no support for renovating existing public housing.

• Zoning policies such as minimum lot sizes, height restrictions, setback requirements and maximum residential densities can prevent more intensive development of the city’s limited land resources. Community resistance to change leads to policies that prioritize preserving existing single-family neighborhoods over the development of new affordable housing.

• The lack of predictability in the City’s development approval process has a chilling effect on developers considering projects that require City Council and Planning Commission approval. A last-minute decision can scuttle or significantly delay projects in which the developer has proceeded in good faith, investing hundreds of thousands of dollars.

• The approval process is expensive and time-consuming, adding directly to the total development costs and ultimate housing prices.

• The tight housing market allows landlords to discriminate against low-income households with limited financial resources, spotty or no credit histories, arrest records, children, housing choice vouchers or other perceived risk factors.

• Housing affordability for many households is an income problem. Low levels of education, limited skills training, inadequate public transit and difficulty finding quality affordable child care can prevent individuals ability to reach financial self-sufficiency.

With this report in hand, the folks at Partners for Economic Solutions examined the height bonuses currently under consideration in both the Strategic Investment Area and the Comprehensive Plan.  The concept explored was how many units could be provided and at what level of affordability.

The very detailed report included carrying costs, a 7% profit margin as well as other development costs.  This profit margin was explained as necessary or the project would not gain investors – they would instead put their money into other projects with a better return on investment.

Development costs are impacted by several factors, but most significant are the style of construction and the type of parking. Height has a direct impact on costs with lower-cost wood-frame construction limited to four stories. A fifth story can be added if the first floor is constructed in concrete rather than wood. Above five stories, most apartment buildings are constructed on concrete or steel and concrete at a much higher cost per square foot.

Parking is a major cost factor, averaging $5,000 per surface space, $20,000 per space in an above-ground parking structure and $32,000 per space in a below-ground structure. Surface parking is the least expensive option, by far, but it consumes a great deal of land.

The model assumed up to four stories of development would be served by surface parking with taller buildings requiring structured parking.

The analysis also suggests a limited ability for height bonuses to secure committed affordable housing units. Generally speaking, Charlottesville rents do not support the construction of mid-to high-rise residential buildings with the exception of student housing adjacent to the University of Virginia grounds, high-end condominiums and possible niche products such as luxury senior housing. Five-story structures are feasible only at the higher rents achievable in Downtown neighborhoods.

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In conclusion, the report found that if density is the only incentive, based on market conditions, it does not work.   Providing perhaps 15% of the incremental increase in units @ 60% AMI or 10% of the incremental increase @ 50% AMI.   The consultant went so far as to say, “some of the Planning Commission concepts have no value to the developer; it is NOT an incentive”.

After this well presented and documented report was presented, Councilor Kathy Galvin said,

This would depress a hyena

Mayor Nikuyah Walker said, “This is bad”, and continued to express concern that the economic analysis included a profit margin for the developer.  She contended that until we change that conversation we are never going to fix this.  She said that if you are willing to house just a few people at a time – that’s not a direction I support.

Councilor Mike Signer called out Albemarle County’s role in the housing affordability issue.  He indicated the politics of increasing density is very tough highlighting his affirmative vote in the 3-2 decision to rezone 10th and Jefferson.  He also pushed back on the contention that a profit margin did not matter.

Vice Mayor Heather Hill called out the Air BnB taking up some of the Accessory Dwelling Units are being pulled out of affordable housing stock.

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Brandon Collins

At the end of the meeting, Collins presented a different perspective 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.

Beyond the ironic title “Marshall Plan”, the Free Enterprise Forum has several questions.

  • If providing significant affordable units was not economically feasible with a 7% profit margin does the loss of that 7% make the economics work?
  • Considering the current political climate in Charlottesville, could a $140 million bond be supported by the citizens?
  • Would this council support the tax increases needed to service the debt issuance?
  • Does addressing Affordable Housing head on start to address some of the other socioeconomic challenges in the City?
  • Could this program actually increase the demand for affordable housing?

As usual, we have more questions than answers.  Stay tuned.

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: TV10

Albemarle Rushes Rural Rights Reduction

imageBy. Neil Williamson, President

Do commercial uses fit in Albemarle County’s rural areas?

Looking at the photo to the right of Earlysville General Store, I would say not only do they fit, such uses (and the owners, employees and patrons) are the very fabric of the community for generations.

But such community supportive land uses are now in jeopardy.

Please let me explain.

On Wednesday night (6/13), the Albemarle Board of Supervisors will be considering a zoning text amendment (ZTA201800002) that would significantly reduce the number of uses allowed on property that is zoned commercial in the rural areas.

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.

The concept of “takings” was discussed at the Planning Commission.  In the meeting minutes Deputy County Attorney John Blair explained the issue:

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Anecdotally, we have seen property values diminish with reduction in rights but it was not until we read a 2006 paper by Oregon State University professor William K Jaeger that we found empirical evidence of such property value deimmunization.  Jaeger’s research is very careful to paint a broad brush regarding property values but provides an interesting window on the comparison between regulated and unregulated land costs.

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In explaining this issue, Jaeger mentions the significant externalities involved in any real estate valuation:

Given the possibility of a price effect for both regulated and unregulated land due to the land-use regulation, it would be presumptuous to attribute the entire price differential between the two markets to a reduction in property values for the regulated lands. To use an analogy, if you tie your boat to a coastal pier and then, after a period of hours, notice that the level of the boat is now below the level of the pier, you are unlikely to ask: Did the pier move up or did the boat move down? You will immediately understand that piers don’t move up, but that an outgoing tide could have easily caused the boat to fall.

Considering the significant number of variables in any real estate transaction, and the Supreme Court’s decision regarding loss of up to 90% dictating a taking, I believe this loss of property rights would not meet the legal definition of a taking.

Even if it is legal is it right?

Albemarle County’s Rural Chapter of its comprehensive plan recognizes the need for commerce in the rural areas.  Specifically calling for such communities to develop:

Crossroads communities that provide support services and opportunities to engage in community life;

Why then are these ~80 rural properties being effectively downzoned so quickly?

We do not know specifically but here is what we do know:

1.  Albemarle’s Board of Supervisors closed meeting earlier this summer one topic announced to be discussed was a Zoning Text Amendment and ongoing litigation.

2.  According to several sources, Albemarle has a court case on June 22nd regarding a rural area land use decision

3.  The Planning Commission was clearly pushed by the Supervisors to have this ready for the June 13th BOS meeting

4.  An e-mail asking the direct question of Albemarle County staff went unanswered last week.

If the Albemarle Board of Supervisors is pushing this agenda due to a specific court case, the Free Enterprise Forum believes the public has a right to know.

It’s a shame a bad law (400 gallons of water use per acre per day) is now being replaced by one that is even worse.

We continue to believe a thoughtful discussion of performance standards could produce a significantly improved ordinance that could more properly balance property rights and the community goals.

But that would take time, something seemingly the Supervisors don’t have.

Respectfully submitted,

Neil Williamson

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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: Earlysville General Store Facebook Page

Greene County Planning Commission Lowers Proffers

By. Brent Wilson, Field Officer

The Greene County Planning Commission  heard a rezoning request at their May meeting to remove or reduce the cash proffer required for a Planned Unit Development (PUD) originally granted in 2008. For the last ten years, Kinvara Properties, LLC has tried to develop approximately 33 acres fronting Route 29 southbound just north of the Food Lion plaza.

A cash proffer is a “voluntary” financial contribution the applicant makes per unit designed to offset a project’s fiscal impacts to the locality.  The Free Enterprise Forum has written extensively about proffers including the 2013 white paper “Contradictory Consequences“.

In 2016, Virginia’s General Assembly passed significant proffer reform.  The legislation required that any proffer provided must be answering a specific demand created by the project.  Most localities (including Greene) have not rewritten their zoning code to reflect these changes.

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Lily Ridge Apartments

A recent Greene County project, Lily Ridge Apartments, did pay the $9,000 per unit cash proffer for those units developed above the by right number of units (prior to the rezoning).

However, Kinvara Properties, represented by Attorney Butch Davies from Madison County, argued that their PUD will be more dense and have only 2 bedroom units therefore creating less demand on the school system – one of the major drivers of the cash proffer policy.

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Butch Davies

Davies explained that Kinvara has had several clients interested in the property but they have said that the size of the proffer makes the project economically unfeasible. In addition, the developer has already made expenditures for water and sewer hookups and road improvements. Chairman Jay Willer pointed out that these items, while having value to the county, are not part of the proffer calculation.

Davies offered $1,200 per unit in cash proffers with the logic being that the change in the law starting in July, 2018 will require proffers to be specific in the items related to the project. Davies referred to several other projects where proffers in the $1,200 range had been accepted by Greene County.

The hearing shifted to comments from the public, which there were none. Planner Stephanie Golon pointed out that the rezoning would allow 50 residential units to be built and she estimated that the number of students would range between Lily Ridge, 27 students or .58 students per unit and Terrace Greene, 30 students or .11 students per unit.

If the Lily Ridge ratio is used then the development would have approximately 29 students but Weldon Cooper Center for Public Policy data would only project 16 students. Commissioner Ron Williams pointed out that given the current proffer and that schools are the main contributor to the costs involved then the amount should be approximately $4,500 vs. the $1,200 offered by the developer. Williams asked how the $1,200 was calculated and Davies answered that it is based on the smaller number of students.

Willer brought up the fact that Kinvara Properties accepted the original proffer agreement  and he had a difficult time lowering the proffer.  Davies again stated that potential sales to developers have fallen through with the current proffer and he believes a reduction will allow the sale to be completed and the development to go forward.

Williams stated that he thinks the development is a good fit for the area and he isn’t sure when the $9,000 proffer would become affordable. Inversely, the $1,200 proposed proffer lacks supporting detail as how it was calculated. But the county needs commercial development and he believes more residents in Greene County will attract more businesses.

While Willer agreed that more people attract businesses, he has a difficult time in revising an agreement that the two parties made and the lowering of the proffer would cost Greene County $390,000 in proffers when the development is completed.

Williams made a motion to recommend approval of a revised cash proffer of  $1,200 per unit and it was approved 3-1, with Willer voting against it and one commissioner absent. The rezoning application now goes to the Board of Supervisors for their decision with the recommendation of approval from the Planning Commission.

The reduction of the proffer in this specific case continues to set a precedent for a lower proffer. The original proffer amount was set over 10 years and should be updated with current cost and the impact of the 2016 proffer law. Another option would be to have separate proffers for individual homes, townhomes, condos, etc. and possibly down to the number of bedrooms in each unit. These are the issues that have been discussed in past meetings.

Definitely future requests from developers will point to the $1,200 amount, if approved by the Board of Supervisors, as a basis to set (or lower) their cash proffer.

An argument could be made that since lower proffers attract more developers wouldn’t doing away with proffers altogether attract the most developers?

Is 0% of the current proffer more valuable than 100% of $1,200?

Or is more residential development worth the upside of more driving potential commercial development and increased tax revenue?

It will be interesting to see how the Greene County Board of Supervisors deal with this application and if they ever get around to adjusting their cash proffer policy to be congruent with state code.

Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.  The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at http://www.freeenterpriseforum.org

 

 

Icarus, Municipal Hubris, and Tourism

FORUM WATCH EDITORIAL

By. Neil Williamson, President

When you are traveling outside of Central Virginia, where do you tell people you are from?

Do you say “Free Union”, “Albemarle County” or do you say, “Charlottesville”?

Seemingly an academic question but it is one that is at the heart of the current governmental coup of the Charlottesville Albemarle Convention and Visitors Bureau (CACVB).

According to an April 25th Daily Progress article by Chris Suarez:

In December, former Albemarle Board of Supervisors Chairwoman Diantha McKeel sent a formal notice to [Then CACVB Executive Director Kurt] Burkhart that said the county intends to terminate an existing organizational agreement on June 30.

The letter says the city and county’s elected officials had been discussing the CACVB’s “limited focus and reluctance” to promote locally owned wineries, breweries and distilleries, history and heritage tourism and ecotourism, as well as specific activities such as bicycling, hiking, canoeing and kayaking.

“We feel destination development is currently lacking,” the letter says. “Although the targets for hotel vacancy rates are important and currently successful, their vacancy rates and other directly related indicators should no longer be the primary driving metrics.”[Emphasis Added-NW]

The friction between CACVB Executive Director Burkhart and the Albemarle County Board of Supervisors had been simmering for several years.  [Burkhart retired earlier this year]. While Burkhart touted hotel occupancy rate data; focusing on proving the return on investments in tourism using economic models showing $6 or $7 benefit for every dollar invested, supervisors questioned the methodology of these models and noted the large number of hotels in the City.

imageIn addition to Burkhart not filling funded positions quickly and maintaining a large fund balance, the root of much of the concern was focused on the belief that Albemarle was not being promoted enough in the marketing of the region.

This “Municipal Hubris” has been gong on for over a decade.   I recall when the latest logo redesign [left] was competed several years ago, it was a requirement that Albemarle be in the logo and then there was a concern regarding the different size font. Then there was a discussion, I am not making this up, that it was not alphabetical.

See the source imageAccording to www.Merriam-Webster.com

To the [Ancient] Greeks, hubris referred to extreme pride, especially pride and ambition so great that they offend the gods and lead to one’s downfall. Hubris was a character flaw often seen in the heroes of classical Greek tragedy, including Oedipus and Achilles. The familiar old saying “Pride goeth before a fall” is basically talking about hubris.

So what does Charlottesville City Council think about this internal branding conflict.  We believe the answer can be found between the lines of Councilor Kathy Galvin’s polite answer quoted in the Suarez article:

“What happens next (including whether or not a city/county CACVB committee persists and I remain the city’s liaison with the county) is a matter, in my view, to be decided by the City Council,” Galvin wrote. “I will be raising that question at a City Council meeting in May.”

At the end of the May 21st City Council meeting, they selected Councilors Galvin and Signer to represent Council in the CACVB reorganization work; but there was no further discussion beyond the appointment.

To review, the proposed CACVB Executive Committee would control all aspects of the organization and would consist of  one member from the City Council and the Board of Supervisors; the city manager (or a designee); the county executive (or a designee); a tourism or economic development official from the city and county; a University of Virginia representative; two industry representatives, one each appointed by the city and county.  All but three of these members sit on or answer to either the City Council or the Board of Supervisors.

Considering the many conflicts and concerns between the City and the County right now, I anticipate the jointly funded marketing of regional tourism objectives to be an area where the city (and county) end up walking away from the “new deal”.

The result will be duplicative efforts (though they will claim collaboration), inefficiency and a lack of accountability.  Tourism will become a division of each locality’s Economic Development departments and lack the import and independence it enjoys today.  In addition, we see further weakening of the required nexus between tourism and line item expenditures.  Transparency is lost.

Perhaps a brief review of Greek mythology [Daedalus and Icarus] could prove helpful prior to moving forward with the dissolution or dismemberment of the CACVB.

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.frederickmordi.wordpress.com