RD556 - Report on Proffered Cash Payments and Expenditures by Virginia’s Counties, Cities and Towns 2019-2020 – November 2020

Executive Summary:

Section § 15.2-2296 of the Code of Virginia authorizes governing bodies to accept proffers through conditional zoning. Localities under § 15.2-2296 through § 15.2-2300 have been authorized to accept proffers, and the number of localities authorized to collect proffers as a form of conditional zoning has expanded over the years. A proffer is a voluntary offer from a property owner as implied by § 15.2-2296 Code of Virginia and can be an act, donation of money, a product, or services(*1) that limit or qualify how the property subject to the conditions will be used or developed. These conditions are in addition to the general, uniform regulations otherwise applicable to land within the same zoning district. Upon approval by the local governing body, the conditions become part of the rezoning and pass with the ownership of the property. (*2) Cash proffers are a form of conditional zoning that are generally used to offset the impacts of a particular development by providing funding for new roads, schools, or other public facilities and services. Cash proffers can be used for onsite or offsite improvements to offset impacts from a new commercial or residential development. (*3)

In 2016, the General Assembly passed new legislation addressing residential developments and cash proffers; stipulating that onsite or offsite proffers must be specifically attributable to a proposed new residential development and must directly address an impact to an offsite facility. A voluntary cash proffer is considered unreasonable unless the residential development created a need for one or more public facility improvements and the new development would receive a direct benefit from those improvements. Localities are only allowed to accept cash proffers for roads, schools, public safety or parks and recreation that would need improvements or a brand new facility as a direct impact of a new residential development. This limits how cash proffers can be used for residential developments in the future, however; localities can still expend cash proffers for commercial developments for 11 different types of uses as listed under § 15.2-2303.2 Code of Virginia if the proffers were collected prior to 2016.(*4)

Section § 15.2-2297 of the Code of Virginia stipulates that a zoning ordinance may include and provide for the voluntary proffering in writing, by the owner, of reasonable conditions, prior to a public hearing before the governing body, in addition to regulations provided for in the zoning district or zone by the ordinance, as part of a rezoning or amendment to a zoning map. Furthermore, (1) the rezoning itself must give rise for the need for the conditions; (2) the conditions shall have a reasonable relation to the rezoning; (3) the conditions shall not include a cash contribution to the locality; (4) the conditions shall not include mandatory dedication of real or personal property for open space, parks, schools, fire departments or other public facilities not otherwise provided for in § 15.2-2241; (5) the conditions shall not include a requirement that the applicant create a property owners association under Chapter 26 (55-508) of Title 55 which includes an express further condition that members of a property owners association pay an assessment for the maintenance of public facilities not otherwise provided for in  § 15.2-2241; however such facilities shall not include sidewalks, special street signs or markers, or special street lighting in public rights-of-way not maintained by the Department of Transportation; (6) the conditions shall not include payment for or construction of off-site improvements except those provided for in § 15.2-2241; (7) no condition shall be proffered that is not related to the physical development or physical operation of property; and (8) all such conditions shall be in conformity with the comprehensive plan as defined in § 15.2-2223.

Section § 15.2-2303.2 of the Code of Virginia directs the Commission on Local Government to annually collect data concerning local government revenues and expenditures resulting from the acceptance of voluntarily proffered cash payments. These cash proffers, comprise either (1) the aggregate dollar amount of proffered cash payments collected by the locality; (2) the estimated aggregate dollar amount of proffered cash payments that have been pledged to the locality and which pledges are no conditioned on any event other than time; and (3) the total dollar amount of proffered cash payments expended by the locality in each of the following categories: schools, roads and other transportation improvements, fire and rescue/public safety, libraries, parks, recreation, and open space, water and sewer service extension, community centers, stormwater management, special needs housing, affordable housing, and miscellaneous.

Although the Code of Virginia has authorized every jurisdiction to use some form of conditional zoning since 1987, only localities meeting specific criteria may accept cash proffers. On the basis of these criteria and census data from 1990 through 2010, a total of 298 Virginia localities (89 counties, 36 cities, and 173 towns) were eligible to accept cash proffers during FY2019. (*5) The table displayed on the fifth page of the report shows the statutory authority for and categories of localities eligible to accept cash proffers.
(*1) Kamptner, Greg, The Albemarle County Land Use Law Handbook.(June 2017) Chapter 11, Page 11-1
(*2) Virginia Citizens Planning Association and the Virginia Department of Housing and Community Development, The Language of Planning, Community Planning Series, V (June, 1986), p. 10.
(*3) John H. Foote, “Planning and Zoning," Handbook of Virginia Local Government Law, ed. by Susan Warriner Custer, 2001 Edition, pp. 1-11 – 1-14.
(*4) Appendix A
(*5) U.S. Department of Commerce, Bureau of the Census, 1990 Census of Population, Number of Inhabitants, Table 4; U.S. Department of Commerce, Bureau of the Census, 2000 Census of Population and Housing, Summary File 1 (SF 1) 100-Percent Data; U.S. Department of Commerce, Bureau of the Census, 2010 Census Redistricting Data (Public Law 94-171) Summary File. Sec. 1-235, Code of Va. states that unless otherwise specified, unadjusted population statistics are to the used in determining the decennial growth rate. See Appendix B for the list of Virginia localities with statutory authority to accept cash proffers.