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August 17, 2008

TDR discussions continue; Group identifies concerns with Slutzky proposal

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Two weeks after Albemarle County Supervisor David Slutzky (Rio) detailed his straw proposal for the creation of a marketplace for the voluntary transfer of development rights out of Albemarle’s rural area, stakeholders got their chance to make their comments on the plan. The Weldon Cooper Center at the University of Virginia is facilitating the discussion group to seek input on how a system of transferrable development rights (TDR) might work. 

Participating in the group for the first time, Supervisor Dennis Rooker (Jack Jouett) presented a chart he created which depicts how much of a receiving area would be needed to accommodate development rights transferred from the rural area. Slutzky suggests creating a receiving area that would total 1% of the County. That translates to about 7.2 square miles or 4,608 acres. Assuming a lot density of .77 dwelling units per acre, Rooker said that would be only enough to accommodate 12,000 development rights, if 2 rights would be required to develop one lot. 

“The [enabling legislation] requires that you create an area that is capable of handling the development rights that might be put into it,” Rooker said. He added that the County also would need to require that the necessary infrastructure needs be in place as well. “North Pointe right now is dealing with sewer issues that as I understand it will end up costing $30 to $40 million.”  Approved two years ago, North Pointe is a 900 home mixed-use development in Albemarle’s designated growth area along Route 29 North past Airport Road.  No construction has begun in North Pointe.

Individual property owners must apply for a determination from the County of how many rights they have, which results in a Determination of Development Rights letter. Rooker estimated there are at least 40,000 development rights in the County, but that the exact figure is not known. If the number is close to 40,000, Rooker said the County’s receiving area would need to be around 24 square miles, or over 3% of the County.

After Rooker’s presentation, each stakeholder was asked to identify a pro and a con with Slutzky’s proposal. Here is a selection of some of the responses:

PROS:


Cannon
Albemarle County Planning Commissioner Jon Cannon is serving as a facilitator in the TDR discussion series

“It’s an opportunity to preserve the rural character of the County.” (Leigh Middleditch, 5-C’s)
“It would have the potential of preserving a land base which we need for various environmental reasons.” (Joe Jones, Farm Bureau)

 “It’s the best idea that I’ve seen on the table for a win-win solution between the no-growthers and the rural property landowners.” (Frank Quayle, Realtor)

“There is a potential to create building lots that the market demands that are not currently available and as a result of those lots not being available, people are building in the rural areas.” (Chuck Rotgin, Great Eastern Management Company and developer of North Pointe)

“You might create some marketable rights for people who don’t want to divide their property.” (Dennis Rooker, Albemarle County)

“We always thought of this TDR approach as a way of protecting the rural area by encouraging growth in the growth area, but with $3-plus gas, there might be a new paradigm operating here… It may be a transportation planning tool in that with gas prices that high, more and more people are going to want to live centrally where they work so this TDR project might facilitate people living where they can afford to live.” (Tony Vanderwarker, Piedmont Environmental Council)

“If we take seriously both the statements of the City and the County that we want to work towards a sustainable community, I think this is a creative and potentially useful tool.” (Jack Marshall, Advocates for a Sustainable Albemarle Population)

CONS:

Rephann
Terry Rephann of the Weldon Cooper Center is serving as the other facilitator of the TDR discussion series

“The market may not work.” (Leigh Middleditch)

“I don’t think that the 50 acre mandatory down-zoning [from 21 acre minimum lot sizes] creates a fair-market value for the development rights... To me it creates a fire sale of development rights. All of a sudden they’re there just like a hailstorm and when you got a flood on the market, prices tend to go down.” (Joe Jones)

 “You are violating landowners property rights and assuming that their land is your land to talk about and to do with what you will. The starting point of saying that there is going to be a mandatory 50 acre downzoning is a violation right there of what landowners and property owners would want to see happen.” (Sarah Henley, Forever Albemarle)

“The plan as it was presented  is fundamentally flawed because it rests on coercion,  it rests on a force that to me is not sustainable ultimately, and it deprives people of fundamental rights, and the vision it creates is one I can’t even begin to think that anybody could take seriously.” (Deborah Stockton, Virginia Independent Consumers and Farmers Association)

“I’m extraordinarily skeptical that you’d need to give up two division rights to get one home built. I struggle to believe a 50 acre downzoned parcel could have a value that is comparable to today’s 50 acre parcel with division rights.” (Frank Quayle)

 “David’s density is much, much too low… In order to create those lots, they’ve got to be bigger. You can’t expect people that want a yard and a big house that are going to build on a 5 to 10 acre lot in the rural areas, which they currently can, to come into a quarter acre of half acre lot in the boundary.” (Chuck Rotgin)

“It’s way too complex to work in a natural marketplace. I don’t see enough positive market incentives to create a legitimate market place that will actually work. I see it as kind of one-sided right now.” (Dave Phillips, Charlottesville Area Association of Realtors)

“I would like not to expand the existing growth areas and wish there were some way to utilize existing growth areas as the receiving area.” (Jack Marshall)

Other comments and questions were made as participants offered their comments. Here’s a selection of some of their viewpoints:

“If no solution is reached, the winnowing away of property rights that’s happening dramatically over the last 18 months and will continue, there’s a high degree of probability that 5 or 10 years from now rural
property owners will have far less ability to do with their property what they can do today.” (Frank Quayle)

“There seem to be two core goals of the County’s growth management strategy. Number one, to discourage growth in the rural areas. Number two, to create vibrant, compact, mixed use areas in our development areas where you’re going to attract growth that would otherwise go into other areas. The pro I would offer is that this is a creative proposal for trying to find a politically palatable way to accomplish that first goal, discouraging growth in the rural areas by simply downzoning rural area properties. Broadly, the con that I have with it is that in trying to achieve that first goal, we seem to be undermining the second goal of creating vibrant and attractive development areas.” (Morgan Butler, Southern Environmental Law Center)

“The pro is that if we achieve a workable plan that all interested parties including the landowners can agree on, that adds a lot of valuable predictability for the future. My counter-acting con is that I’ve spent most of my adult life in government. Aggressive governments continue to be aggressive and we could perhaps reach a conclusion here that makes permanent changes on the land itself but doesn’t prevent future actions by the County government to make future controls added on to this agreement.” (Jay Willar, Blue Ridge Homebuilders Association)

“Its complexity is going to be its constant bane, and there’s no question about that. I still think that its fundamental pro is that the proposal tries to balance the legitimate concerns of property owners against the need to constrain development in the rural area,” Slutzky said. “I don’t know if we can pull it off.”
Dennis Rooker warned that the TDR mechanism could create a false sense of compensation for rural landowners. The fair market today might see a development right worth as much as $175,000, but Rooker feared selling the development right to the receiving area might be as low as $20,000.

Neil Williamson said the County’s population base is shifting to the growth areas, many of whom are getting upset at a lack of services. He wanted to know how infrastructure would be paid for if the development in the boundary area would all be done by right.

MANDATORY OR VOLUNTARY?

Leigh Middleditch asked if TDRs would work if they were voluntary, meaning no downzoning would take place. He also wondered if an area of the County could be set up for a pilot project to see if it worked.
Joe Jones said he would not support a mandatory downzoning, but would be interested in parting with his development rights voluntarily if there was a value in it.

Sarah Henley was adamant that a program that downzoned the whole County would be against the wishes of farmers, but said a voluntary program might work.

“I’m looking for government that is incentivizing and asking for permission to do certain things with your land, and to understand the investment that’s in that land,” Henley said. “Farmers put their investment in the land and now it’s being played with like a board game.”

Rooker said when he was preparing for a panel discussion sponsored by ASAP in 2007, he did not find any effective TDR programs that were not mandatory. “The ones that were voluntary did not have a single transaction,” he said.

WHAT ABOUT THE EXISTING MARKET?

Morgan Butler said there were as many as 8,000 lots in the rural area that are currently undeveloped, and these would not be affected under Slutzky’s proposal. “At the current rate of rural development, between roughly 200 and 300 lots a year, that number of vacant lots could basically satisfy 20 to 30 years of rural development…. How do rural landowners react to a downzoning when the market for  development rights created by the downzoning may not kick in for decades?”

Chuck Rotgin: “I think there is enough significant anecdotal evidence that the unavailability of lots that the market wants in Albemarle County over the past 10 to 15 years has pushed people into the rural areas. More importantly, it’s also pushed people into neighboring counties… that’s bled our tax base… it’s also created tremendous transportation issues… we’ve got all these people that we’ve pushed out of the community, paying taxes elsewhere, yet they’re using our roads and we have no tax base and no money to help fix those roads.”

Jay Willar: “I wonder if we’re fighting the last war here. If the building community nationwide sees a trend that says people are looking for smaller lots, smaller houses… and as Tony said, gas prices are going up and they’re going to stay up. Several people have mentioned that the trend in Albemarle County is less building in the rural areas, more building in the growth areas. I wonder if the markets aren’t going to be taking care of a lot of these problems on their own, and the government doesn’t any longer need to step in and be as forceful as this kind of plan talks about.”

PUBLIC COMMENT

Several people not invited to serve as stakeholders also attended the meeting. Grant Griffin, with the Appraisal Group, wanted to know more information about what could be done in the boundary area. Could anything be developed at all on that land without a development right? What would that do for the property rights of existing landowners in that area? He also said developers’ costs would skyrocket if they were forced to pay for land as well as two development rights.

One woman was concerned that decisions were going to be made that affect her land and she was frustrated she could not be part of the discussion. Terry Rephann, a facilitator with the Weldon Cooper Center, said one of the sessions would be dedicated to receiving input from the public, possibly in late October.

Dave Phillips told the new attendees that Slutzky’s proposal is not in any way official, and that was just a proposal to serve as a starting point in a long discussion. “If we’re able to come up with something, it’s going to take a while and a lot of mental changes and a lot of compromises on different people’s parts,” Phillips said.

Supervisor Rooker reminded the new attendees that the working group was not created by the Albemarle County Board of Supervisors, and no staff time is being spent on evaluating the costs and benefits of a TDR plan.

After the participants got the chance to weigh in with their thoughts, the room was split into four groups to further discuss the pros and cons how they would revise Slutzky’s proposal to make it more palatable. Those groups will report out their work at the next meeting, scheduled for August 28, 2008.

Group

Sean Tubbs

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