RD684 - Report on Proffered Cash Payments and Expenditures by Virginia’s Counties, Cities and Towns 2020-2021 – November 2021

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 §1 5.2-2300 have been authorized to accept proffers and the number of localities authorized to collect proffers as a form of conditional zoning has been 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, however; localities can still accept cash proffers for commercial developments for 11 different types of uses as listed under § 15.2-2303.2 Code of Virginia.(*4)

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) any money voluntarily proffered in writing signed by the owner of property subject to rezoning, and accepted by a locality pursuant to the authority granted by § 15.2-2298 or § 15.2-2303 of the Code of Virginia; or (2) any payment of money made pursuant to a development agreement entered into under the authority granted by §15.2-2303.1 of the Code of Virginia.
(*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