Some Rules Are Built To Bend: Zoning And Re-zoning in Charlottesville

Much of our work has gone to testing the proposition, fundamental to the argument for the Future Land Use Map and up-zoning, that Charlottesville’s current zoning meaningfully restricts housing supply in a way that prejudices housing affordability. We have looked that this question through the lens of results, analyzing the pace of residential unit supply here. We found a rate of housing unit creation in excess of population growth and in excess of Virginia’s average. We considered the question through an analysis of development potential under the current zoning here (with an additional interactive map here). We found hundreds of vacant lots, nearly one thousand lots zoned R-2 or R-3 but containing only a single family home, and called attention to the city’s own analysis of development potential under the current zoning that showed capacity for tens of thousands of new units.

Yet, it is important to remember than a zoning ordinance is not like scripture or a constitution. Developers and citizens have the ability as a matter of course to petition for spot changes in the zoning map (rezonings) or special-use permits/variances to allow for higher intensity use than base zoning allows. The Wharton Residential Land Use Restrictiveness Index, the metric that much of the literature on land use and housing affordability relies on as a proxy for the stringency of land use regulation in different jurisdictions, has several subcomponents that do not refer to the jurisdiction’s zoning ordinance, but rather to the process for changing designations or getting exemptions to the ordinance. It is a fundamental aspect of land use policy. A very cursory examination of land use in Charlottesville is highly suggestive of flexibility. The total acreage covered by zoning categories which host at least some actual residential uses of an intensity of triplex or higher represents 67% of Charlottesville’s total zoned acreage and 40 out of 62 zoning categories.

Therefore, we decided to try to extend our study to Charlottesville’s record on rezonings and special-use permits. We carried out two analyses, one for a smaller sample where we could assemble very detailed data on each rezoning/SUP situation, and one where we looked at a longer and broader series of applications with a narrow range of data available on each. We would have preferred to carry out the fuller analysis on all situations, but unfortunately Charlottesville’s permitting data is not easily accessible for all variables and for all years. We asked for a fuller data set from NDS and received no response; we followed up with a FOIA request which was, after some delay, answered partially. We must regretfully conclude that as in the case of many other information domains, the City has failed to adequately track the data on rezonings, or at least failed to organize it in accessible form.

Our first analysis looks at the years 2016 through the present and considers only rezoning and SUP requests that made it to City Council. The Clerk of the Council has recently released a very helpful catalog of all Council agendas and ordinances. We looked at every ordinance vote that related to a residential rezoning or SUP. For each one, we tried to pull up all the relevant data about the request from Planning Commission laserfiche archives. The PC archives are messy, but we were able to find most of what we needed back to 2016. Before that, the records are not easily searchable and appear to be incomplete, and as a result we were unable to get reliable information. For each ordinance vote, we recorded the result of the vote, the existing zoning or use entitlement as measured in the number of residential units allowed pre-zoning, the proposed zoning (using the unit entitlement post-rezoning) , and the number of affordable units committed under proffer (if any). With the information we received in response to our FOIA request, we were able to make sure we didn’t miss any ordinance votes.

We identified a data set of 30 applications (see map here). Of these, 26 were approved and 4 were rejected. One of those was later accepted in substantially similar form to the original application. The table below shows the number of residential units allowed pre-rezoning/SUP, the number allowed post-rezoning, and the number of units committed to be held affordable under proffer.

It is evident that Charlottesville has been quite liberal in allowing additional residential unit entitlements via rezonings and SUPs. In just 6 years, nearly 1200 net new unit entitlements were created — this in a city that started the period with under 20,000 residential units. For all the talk about affordable housing, with the leverage provided by the requirement of a rezoning or SUP the city was only able to extract proffer commitments of 299 affordable units. And it’s worse than it looks, because 170 of those 299 units come from two mission-oriented developments (MACAA and Park Street Christian Church) that were approved in 2022, remain as-yet unbuilt, and likely will not ever be built without as-yet unsecured city subsidies and private philanthropy. The City still cannot say how many affordable units under proffer exist and remain affordable and amazingly only after the creation of the Comprehensive Plan hired HR&A to figure it out. The above chart suggests that the City probably shouldn’t bother — the number of proffered units is so small as to be nearly irrelevant. Using a heroically generous assumption that every unit found today on rezoned parcels is counted first toward fulfilling any proffer commitments, the maximum number of ADUs in our sample is 76. The failure to secure a significant number of units by proffer is, to our mind, an even bigger failure than neglecting to keep track of the few it managed to secure. For more on the equally dismal record for payments-in-lieu (payments developers make in place of providing ADUs), see our earlier research here.

If zoning were truly very restrictive in Charlottesville, we would expect to see that newly created entitlements would get built out fully and quickly. After all, in a situation of artificial scarcity of building entitlements, these entitlements would be valuable and completed units subject to excess demand and high prices. What did we in fact see?

Only 305 of the new residential unit entitlements were built out as of the spring of 2022. Now, it is true that some of the entitlements were created recently enough that it is possible that construction might still be underway. If we exclude all rezonings/SUPs granted after 2019, we are left with 967. That still means that fewer than 1/3rd of these older-vintage entitlements were built out: hardly what we would expect in a situation of high effective land-use regulation stringency.

One of the other submeasures of the WRLURI captures the time required for a rezoning. Even a system that tends to give approvals most of the time can be costly if it imposes long and unpredictable delays. We took a look at the time from initial application to approval for our sample of Charlottesville rezonings/SUPs, and compared it to the typical time required to go from an building permit applicationt to issuance of a certificate of occupancy.

The first quartile-third quartile range for the time required for rezoning/SUP approval is 138-216 days. That is, most approved applications took around 6 months to work their way through the system. This is not a great deal of time compared with the time to go from building permit application to C-of-O issuance, for which the same range is 230-520. The comparison is even starker if we look at multifamily (5+ units) projects, where the 1st quartile is 532 days and the 3rd quartile is 837 days. Again, this is not what we would expect to see from a punitive or over-restrictive regime. It is also a bright spot in the City’s record of administrative performance that we did not up to now fully appreciate.

As we mentioned above, the disorganized state of Charlottesville’s publicly available permit data meant we could not do this sort of detailed analysis further back than 2016. However, we did have a more restricted set of variables available to us for all permit applications going back to 2009 — that is, a longer data series and one that covers all applications, not just those that made it as far as City Council. An interactive map is available here. It is possible that while the City Council approves nearly all rezoning/residential SUP applications that reach it, many applications are effectively derailed at earlier stages. The longer-range dataset available to us allowed us to look at this question.

Of all applications in the Open Data Portal permits table, 50% had advanced by spring 2022 to approval. While not as high as the pass rate at the Council stage, this is still a high approval rate. Only 7% of applications had received an outright denial. Many of the applications were of more recent vintage and still in process — showing here as “APPLIED.” We arbitrarily assigned any application filed in 2019 or earlier that showed up as “APPLIED” to a category labeled “LONG DELAYED”, on the conservative assumption that such a delay would amount to a constructive denial. However, this may not be the case. Developers might sometimes choose to slow-walk applications that get feedback from NDS or the Planning Commission that revision is going to be required. When we consider only applications that are in one of the “definitive” statuses, the approval rate looks even higher, above 70%.

While the failure to use the rezoning/SUP process to extract affordability commitments is dispiriting, and the failure to analyze this aspect of land use regulation in advance of writing a new zoning ordinance is frustrating, on the whole we don’t think our results are bad news. That the city provides a functional process for developers with worthy projects to seek flexibility to deviate from base zoning is, on the whole, a good thing. It does, however, raise further doubts about whether base zoning in Charlottesville needs radical change. A final side note: Charlottesville was a jurisdiction in the original WRLRURI paper and the city scored a -0.9, meaning it was nearly one standard deviation below the mean on land use regulation restrictiveness. The score fits with our data and analysis.

In listening to the claims of the architects of the FLUM and CP, both within and outside city government, that zoning constitutes an effective impediment to the creation of housing, and particularly affordable housing, in Charlottesville, we have been struck by the absence of evidence for the proposition. Over several iterations of research, moreover, we have found quite a lot of evidence of absence of this claimed effect. Namely, we have seen: ample addition of new residential units, tilted toward multifamily housing; a considerable number of undeveloped parcels or low-value commercial parcels ripe for redevelopment (for example, the Seminole Square parcel that Great Eastern now proposes to turn into a 350-apartment complex as of right under current zoning, which we identified on our list of development opportunies and which in response a Council member incorrectly claimed was undevelopable because of its HW zoning designation); a substantial number of parcels developed as SFH even though current zoning would allow higher density; and now extensive data on rezoning and special-use permit applications showing very high approval rates, alongside a large number of upzonings that have not turned into new units. We will shortly publish some information on the quantity and location of supported affordable dwelling units, something that the city still has not managed to generate, even after paying a consultant a six-figure sum. All of this represents analysis that a competent consultant and fully-staffed city government would have done beforeundertaking to write a comprehensive plan. Having failed at that, we hope the city will at least undertake it before it writes a new zoning ordinance.

April 2022