As the greater Charlottesville-Albemarle area continues to feel the effects of a housing shortage, a panel of developers argued last week that localities in the area can incentivize new construction through land use reform.
“We intentionally, through our comprehensive plans and our zoning ordinances, limit the supply of land for new homes,” said Charlie Armstrong, vice president of land development at Southern Development, during a panel discussion held by the central Virginia Regional Housing Partnership, a program of the Thomas Jefferson Planning District Commission.
Additionally, Armstrong noted that the land set aside for new construction has limits on how many people are allowed per plot: “We intentionally, as a community, limit the density of new homes that is allowed on any one piece of land.”
That’s especially troubling given that a 2019 housing needs study commissioned by the RHP found that housing prices and rents have increased steadily over the years, while wages have not. Since 1980, Albemarle’s Comprehensive Plan has set aside roughly 5 percent of the county’s 726 square miles for residential development. However, much of that land also has to be rezoned for dense development. Since rezoning approvals are no sure thing, the zoning code adds to the cost of each unit.
Fellow panelist Chris Henry of Stony Point Development Group pointed out several recent projects in Albemarle that would have seen denser housing constructed, but which have been stopped or stalled due to opposition from neighbors. That includes Southern Development’s 130-unit Breezy Hill project near Glenmore, which failed to get a necessary rezoning from the Board of Supervisors in January.
“At some point we have to have some tough conversations as a community about how we want to solve that problem,” Henry said. “Where are we going to designate areas that we want to develop in a way that allows the price of housing to come down and more supply to come on line?”
A housing plan under development in Albemarle County calls for reforming the zoning code to allow thousands more units on designated land in the form of triplexes, bungalow courts, and other structures that require more residential density. Albemarle County planners have also added language in the Crozet Master Plan to try to make it easier to build this so-called “missing middle” housing, though some members of the Crozet Community Advisory Council have panned the idea.
“Southern Development would love to be able to produce those kinds of things, but there just aren’t places to produce them,” Armstrong said. “We need to put that missing middle into our zoning ordinances and remove the barriers that exist.”
Henry said another external factor is that many people who end up purchasing homes are moving to the area for the first time, and can outbid those who are seeking to move up the property ladder in a place with limited supply.
“A retiree moving from northern Virginia, for example, has a lot larger budget for a home than a young professional trying to find a job in Charlottesville,” Henry said. “Some of those folks are pushed out to areas like Staunton, Waynesboro, Palmyra, Richmond.”
Henry also said housing is more expensive to build now than when many existing neighborhoods were first developed. Back then, developers did not have to comply with regulations to reduce stormwater runoff or meet requirements to build sidewalks and other public infrastructure.
“Municipalities used to be in the business of building roads,” Henry said. “A lot of that has been pushed off to the private sector for various reasons, a lot of them are reasonable. But it’s added to the cost of homes.”
Another factor in the increasing cost of development is the increasing complexity required to get a bank to finance a project, especially if the proposal includes both commercial and residential elements, noted Andrew Clark, vice president of government affairs for the Home Builders Association of Virginia.
Clark works as a lobbyist to pass legislation in the General Assembly, and this past session focused on a bill to create a housing opportunity tax credit. Such a credit would help fill the financing gap, but opportunities for credits are limited. Various nonprofits and other entities compete for limited low-income housing tax credits provided by the Virginia Housing Development Authority.
Clark said other solutions include making it easier for localities to create tax abatement programs and to waive fees for development. Albemarle County is considering doing the opposite, and increasing fees developers pay in order to cover the cost of processing land use applications. The Board of Supervisors will take that up at a public hearing on April 21. Armstrong also hopes that Governor Ralph Northam will sign a bill directing the state to study how accessory dwelling units might help increase the supply of homes.
Armstrong said if people want change, they have to speak up at local meetings to support additional housing.
“That’s not just at the comprehensive planning level or in the zoning ordinance level,” Armstrong said. “That has to go all the way down to the very small technical policies, standards, and specifications that cities and counties publish that everyone has to follow because that’s where the cost comes in.”