Council and PC hold another work session on Charlottesville’s draft zoning

Charlottesville City Council and the Charlottesville Planning Commission met on April 25, 2023 to get another update on the rewrite of the zoning code. The roll-out of the next set of draft rules is slightly delayed.

“I think it’s no secret that we are a little behind schedule and we’ve been wrestling with where we are right now and what we have yet to come,” said James Freas, the city’s director of Neighborhood Development Services on the third module of the draft zoning. 

Here’s where things stand as of today. 

The terms of both Commissioner Hosea Mitchell and Rory Stolzenberg are up on August 31 and both are eligible for reappointment. The application window for Boards and Commissions does include requests for more people who would like to serve. 

There’s also an election on November 7 and there will be at least one new City Councilor.

Mitchell said he hopes the process can be wrapped up by the end of the year. 

“One thing we don’t have to do is re-educate the Commissioner and or the Councilor,” Mitchell said. 

Freas said he understood and said this meeting was to hear any concerns from Councilors and Commissioners as he and staff work to develop a consolidated draft. 

“A great example of that is that there’s been a request or an identification of a need to get a better understanding in module 1 of how the different components of the district standards interact with each other in order to produce potential development on the site,” Freas said.

Freas said over a hundred comments have been made requesting changes to the zoning map. A new map will be created as part of the consolidated draft.  

Further discussion on cash-in-lieu program 

At the March 29 work session, some Councilors and Commissioners expressed concern that the draft zoning would have a provision allowing developers to pay into a fund rather than guarantee units would be held below market-rate.  For background, go back and read my March 29, 2023 story on that meeting. 

On April 25, Freas explained why the cash-in-lieu option remains.

“What there is an acknowledgement of is that every project at the end of the day is unique and the fee-in-lieu offers you an option where otherwise the project may not happen,” Freas said. “Or the affordable units on site would create challenges that can’t be surmounted. The fee-in-lieu offers an option that allows both the project to go forward and to get the benefit of those dollars.” 

Freas said the calculation for the fee would result in higher values than the current one. 

Councilor Michael Payne said he still wasn’t sold on the idea and wanted to include language that stated any fees collected would not go to Council’s moral commitment to spend $10 million a year on affordable housing. 

“And these fees are on top of that $10 million,” Payne said. 

That commitment was made in March 2021 when Council adopted the affordable housing plan. Council can make no binding financial decision except for adopting a budget for the next fiscal year. 

Further discussion on “double-density” yields potential for compromise 

The first module unveiled the concept that a developer could double density in Residential-A, Residential-B and Residential-C zones but only if all of the units are designated for households below 60 percent of the area median income. 

Commissioner Phil d’Oronzio said more flexibility should be included to allow nonprofits to provide some of those units at market-rate to subsidize the affordable ones. 

“Although we do need affordable units as applying to 60 [percent of area median income], we need a bunch of 80’s and less too, and 90’s and less too,” d’Oronzio said. “The missing middle and all of that.” 

A slide from the presentation for the April 25, 2023 meeting (view the slides)

d’Oronzio suggested that only the bonus units be required to be affordable but allowing the base units to remain at market rate. 

“That still builds your units that still provide the affordable units and it still gives us places to put two or three affordable units here, two or three affordable units there,” d’Oronzio said. 

Freas said he felt it would be appropriate to proceed as planned and it could always be changed if no units ended up being built. 

Charlottesville Mayor Lloyd Snook said he did not think any developer, even non-profit ones, would build these types of units without significant subsidies. He suggested removing the double-density ability from the draft.

“Why are we trying to insist on something that is highly, highly unlikely ever to be built?” Snook asked.  

Councilor Michael Payne pushed back on Snook’s skepticism and suggested such projects could qualify for low-income housing tax credits.

“And you also have Habitat who has built projects as just an example using volunteer labor and their fundraising model where I don’t think the expectation would be that the city directly provide [a subsidy],” Payne said.  “I don’t know about eight units but we’ve definitely seen housing production at a smaller scale where the city was investing some amount of money but not even close to 100 percent of the subsidy.” 

d’Oronzio, who works in the mortgage industry, suggested a financing solution. Simple, right? 

“I can knock up a program pretty quickly that would make the city’s money a churning revolver and we wouldn’t have to spend anything like city money permanently,” d’Oronzio said. “We could probably get like 90 percent back wherein the city says ‘You want to build an affordable unit on that dirt? Fine.We’ll provide the construction for free.’ You do it. You build your unit. We vet the tenant that’s coming in. You put in a… subordinate deed of trust in there that says it has to be kept affordable for X number of years or horrible things happen to you and conveys with the property. And then on day one, the program has already found permanent financing for that homeowner to pay off that loan. The property still cash flows with the rental affordable unit that you can develop. The city gets its money back. The homeowner gets to decide what sort of affordable unit goes literally next door to them. They make a small positive cash flow on it and we move on down the road and respend that money.” 

“Well I’d love to see how that works because I don’t understand that,” Snook said. “And it may be beyond the scope of this meeting.”

“It’s not a zoning thing, but we just don’t want to do anything in the zoning code that kneecaps something like that happening,” d’Oronzio said. 

Snook said he was to meet with Piedmont Housing Alliance and Habitat for Humanity after the meeting to better understand their financing. 

Commissioner Mitchell suggested that the double density only be allowed after a legislative review similar to what is in place now with the special use permit. 

“Something where Council and the Planning Commission would have to make a recommendation and Council would have to rubber-stamp it,” Mitchell said. 

Commissioner Rory Stolzenberg opposed the idea because he said there would be too much risk. 

“For an eight-unit project to jump through a special use permit and a year of sitting on a house, or buying in advance not knowing if you are going to get it just seems so onerous to mean that they’re probably not going to happen,” Stolzenberg said. 

Snook said he had an issue with the ability to get 16-units in Residential-C zones because many of them have the same lot sizes. But he said he wants the zoning to be written in a way to allow for some change. 

“I would rather have a system that results in more units, more affordable units, being built but with some way of assuring any individual block or street that this block or street is not going to dramatically change in character,” Snook said. “The notion that we started with at the very beginning was that these changes were supposed to be house-sized, that they were supposed to look and feel like other houses in the neighborhood and I know that you can do things like that with six or eight units.” 

City Councilor Leah Puryear said there will continue to be confusion about the future until people begin to have a clearer understanding of what can happen on their lot. She suggested visuals that can help non-architects and non-planners better grasp the possibilities. 

“Say these are the things that could not happen on this lot if you did a tear-down,” Puryear said. “These are things that could happen on this life didn’t do a tear-down, or you expand it… Once they see it, you can talk about the finance part but nobody.” 

Freas said his staff and the consultants do plan to produce visual components that explain the possibilities. 

“So we’re looking at doing a video where we actually run through the factors that go into a [Residential-B] lot and give you an outcome,” Freas said. 

I’ll be back after a short break. 

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Puryear reminds Council of a major point of the Cville Plans Together initiative

Puryear also agreed with a comment made by Councilor Michael Payne that the zoning reform must result in policies that allow Black households to stay in the city. 

“Are people that live in the city of Charlottesville that look like me and [Councilor] Juan [Wade] and Hosea going to be able to even rent?” Puryear said. “Affordable to you may not be affordable to them and if the unit is $100,000 than you look at what that means. And if I’m only making $25,000 a year, I can’t even get in?” 

Councilor Juandiego Wade said he’s been hearing from many different sides of the conversation to guide how he will vote. He said it seemed that neither those who want the zoning reform and those that do are not quite happy with the current draft when it comes to density. 

“How can we find that compromise, that middle spot from the emails that we’re getting,” Wade said. “Both sides are looking at this the worst-case scenario and I think that’s what we’re spending our discussion on and I know we have to do that but 90 percent of the development and construction would take place in the middle.”

A page from the Affordable Housing Plan describes issues with displacement (download the plan)

Wade said he recently had a conversation with a resident of Ridge Street, parts of which are designated as “Sensitive Communities” in the Future Land Use Map. That map is part of the Comprehensive Plan, which calls upon the future zoning to offer tools to stop displacement.

“This particular street, it happened to have a lot of African-American homeowners on it who moved here from the county  and they moved into the city,” Wade said. “A lot of older homes and lot by lot this street is changing. Assessment is going up. One house across the street is assessed at $260,000, but they’re building a $1.2 million house across the street that has views of Monticello.” 

Wade noted that that house replaced one that had four affordable units. He said the fear is that homeowners will be priced out and added the city must use the zoning code to do what it can to provide tools, and suggested that the main beneficiary of many changes will be Habitat and Piedmont Housing Alliance. 

Wade’s comment provided a segue for Freas to discuss the Sensitive Communities areas and potential policies. He said this concept was first identified in the Affordable Housing Plan. 

“I will say that this is an issue that we have been wrestling with a lot and we did some focus groups with residents in some of our sensitive communities,” Freas said. “There isn’t really an easy answer here and part of the reason there’s not an easy answer is because zoning is a deeply imperfect tool for this. Frankly, zoning is great at keeping low-income housing out of places. It’s not terribly good at the opposite.” 

For now, one idea is to create an overlay district where only one additional unit would be allowed on properties with this designation. He said there are upsides and downsides. 

“One of the downsides is a recognition that we’re seeing displacement today as Councilor Wade described in a single-family environment and that’s not going to stop,” Freas said. “This limit isn’t going to change that and it will continue to happen because at the end of the day, the wealthiest people in our marketplace get to live where they want and many of them want to live in the areas we have identified as sensitive communities, hence the displacement we are seeing.” 

One of the proposals would be to limit additional density in Sensitive Communities to one additional unit

Freas said other policy tools include augmenting tax relief programs, spending more money on programs to help people become homeowners, land trusts, and land banks. He said further planning might help coordinate all of these mechanisms.

“Coming out of the zoning ordinance project, the first small area plan I would like to see us pursue is in 10th and Page because that is one of our hardest hit areas in terms of the displacement,” Freas said. 

Commissioner Carl Schwarz is a resident of the 10th and Page neighborhood and said he would not want to limit potential development in Sensitive Communities but that the small lot sizes on some streets may make it difficult to get density in place.  

“I think you are going to find its already difficult to due more than one additional unit as it is,” Schwarz said. “If someone could cram four units on like my lot for instance, they’re going to be small units which is probably going to be more likely to be naturally affordable,Schwarz said. 

Commissioner Karim Habbab said he thought restricting the number of units in these areas would be a disservice. 

“If somebody wants to sell a house, you can’t make them have a penalty because they live in a sensitive community neighborhood,” Habbab said.

City Councilor Michael Payne said he thought the proposal would be very different. 

“I find it very unsatisfactory,” Payne said. “I think we will end up being naive about how the housing market and capitalism is really going to play out and work here in Charlottesville.” 

And that’s why I spend some of my time going through the property transactions to find examples and to know what’s happening. I hope to post the list from March within the next week and then April soon after.

But for now, I need to conclude this edition, even though I did not make it to the end of the meeting. I refer you again to the disclaimer and hope you know how much I want to scale up so I capture more of these conversations. 

Idea introduction: Commissioner Stolzenberg’s Trilemma

As the meeting continued, the conversation kept coming back to the idea of whether the draft rules should be amended to allow at least some market-rate units to be included in projects that ask for bonus affordable units. Currently that’s not the case. 

Before the meeting, Planning Commissioner Rory Stolzenberg sent an email to Council and his colleagues to set up the conversation. For more on that letter, visit a thread he posted on Twitter

“I’d like to share a framework I’ve found useful for thinking about the differing viewpoints on the topic, as well as the different policy tools we could apply to ‘dial’ it towards one goal or another,” Stolzenberg wrote.

He came up with three categories of public opinion which I’ll quote from his email:

  • “Density only if it’s affordable.” This group prioritizes subsidized/regulated affordable housing — they’re willing to accept change near them, but want assurances that as much of it as possible will be truly affordable, and do not believe new market-rate housing benefits the community.
  • “Build less near me.” This group would like to preserve the existing form of the built environment. It can be further split into concerns about building scale (minimizing change to visual appearance, historic character, shadows) and about number of units (impacts to traffic, parking, and other externalities that nearby humans may cause), with most members sharing both types of concerns to different extents.
  • “More housing of all kinds.” This group would like to maximize the amount of new housing, including market-rate housing, even if it comes with significant changes to the physical environment.

Stolzenberg mapped out these positions in a diagram he calls a trilemma. 

“Any policy solution that completely satisfies one group will leave others dissatisfied, and any tweak to the policy is likely to please 1 or 2 groups while making another unhappier,” Stolzenberg said. “Whatever solution we reach will include an implicit judgment of how each of these concerns should be balanced.” 

I’m thinking about trying something new and interviewing Stolzenberg on this framework, and inviting others to ask questions of him perhaps in a video format. If I do something like that, it would be an experiment and I am not sure when I’d have time to take it on. Please drop me a line if you’d like to be involved with a pilot for something new.

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