HBAR Government Affairs Updates

As a service to our members, we send out a weekly government affairs update that details the latest happenings in local government and the political process. We also send out alerts on important matters on an as-needed basis. If you are a member and are not receiving this update and our alerts, please contact Waren Wakeland at (804) 282-0400, ext. 5 or wwakeland@hbar.org to have your name added to our distribution list. Please be sure to provide your name and the name of your company.

On the Docket : Government Affairs Update February 29, 2008

SB 768 - The Proffer Reform Bill

It has been a wild and crazy week for SB 768.

Last Friday negotiations effectively ended on the bill as after nine meetings and numerous different stands on impact fee caps, the bill's main opponents - the Virginia Association of Counties (VaCo), the Virginia Municipal League (VML) and the High-Growth Coalition - announced they would not accept any cap on the fees.

Tuesday afternoon the House Rules Committee was scheduled to hear the bill. At that time it was thought the committee would put the bill in a study committee for further review during the off-session, effectively ending its hopes of passage for this year. But during the day Tuesday word got around the General Assembly about a Washington Post report to be published the next day that Fairfax County was planning to divert $30 million from its transportation impact fee fund, which it established last year after the legislature gave local governments the right to establish the fee, to its general fund to help balance the county's budget. You can read the story by clicking here.  http://www.washingtonpost.com/wp-dyn/content/article/2008/02/26/AR2008022603410.html

Legislators who supported enactment of the impact fee last year were furious. Local governments argued for the fee saying they were so far behind in providing basic transportation needs that, in lieu of the legislature properly funding transportation, the only choice was to allow them to charge this fee. Speaker Howell and Governor Kaine granted their request knowing it would upset the building industry.

The Fairfax action not only undermined the local governments' arguments. It's also a political stab in the back to the Speaker and the Governor. As a result, on Tuesday the bill was held over for further consideration until 4 p.m. Thursday.

Thursday morning Delegate Franklin Hall, D-Chesterfield, asked the parties to come together one last time to discuss making an agreement. Thursday afternoon an agreement was reached between HBAV, the Virginia Association for Commercial Real Estate, the Virginia Association of REALTORS®, VaCo and VML. Here are the parameters.

• 1)     Senate Bill 768 will be held in the House Rules Committee until the 2009 General Assembly session. It will not be sent to a study committee.
• 2)     House Bill 111, whose patron is Sen. Watkins, will be amended on the Senate floor to prohibit local governments from adopting a road impact fee ordinance until July 1, 2009.
• 3)    The Speaker of the House will draft letters to VaCO and VML expressing his desire that local governments freeze cash proffers until July 1, 2009. He also will direct all parties to meet during the off-session and come up with an agreement to terminate the cash proffer system in Virginia and create a more structured system to allow the building industry to more fairly contribute to paying for the cost of growth.

In other words, the intent is that there be no proffer increases or impact fees established until legislation ending cash proffers is passed and signed into law. If HB 111 passes as amended and is signed by Governor Kaine, Chesterfield County will not be able to enact the transportation impact fee currently scheduled to be considered at its March 12 meeting.

HBAR thanks Delegate Hall and Speaker Howell, as well as VaCo and VML, for working overtime to craft an agreement. The agreement shows there is clear understanding that the cash proffer system contributes unfairly to the high cost of housing in Virginia, is highly flawed and must be replaced. Now there will be more than nine months to work out a new, more balanced system to pay for growth.

A Word About Grassroots Action

HBAR has sent several "red alert" notices in February asking members to contact state senators and Delegates concerning the proffer reform bill. Our research shows us that 20-25 percent of these notices were opened. We thank those who opened the notices and responded by writing your elected officials.

But we must do better than 25 percent in the future. The anti-growth activist groups such as the High-Growth Coalition and the Virginia League of Conservation Voters have well-organized grassroots operations. When their members get notices to call their legislators and urge them to vote no on SB 768 they read the notices and act, early and often. Several legislators have commented that they have heard much more from the bill's opponents than from us. The activists' voices are making a much bigger impact than ours.

We cannot match the activists in numbers, but we can match them in action. They are zealous in their opposition. We must be more zealous in our support.

Now a "red alert" may sound a little corny, but we only send these notices for crucial issues. SB 768 is the most important piece of legislation the home building industry has tried to pass in Virginia in at least a decade. The HBAV lobbyists at the State Capitol can't get it passed alone. They have to have our grassroots help and support. Please, in the future, open the "red alert" notices and act as soon as possible. We don't ask for this help unless we need it.

Richmond Affordability Statistics A Mixed Bag

NAHB has released the Wells Fargo Housing Opportunity Index (HOI) for the fourth quarter of 2007, and it shows Richmond area homes are becoming more affordable, but not as quickly or affordable as in the rest of the nation or the South.

The HOI shows the median home price in the Richmond area has decreased slightly, from $235,000 in the third quarter of 2007 to $230,000 in the fourth quarter. The median family income in the area is listed at $68,700, which makes the price-to-income ratio in Richmond 3.35-to-1. Affordability, measured as the percentage of families who can afford to purchase a new home, increased from 50.5 percent in Q3 to 54.6 percent in Q4. However, Richmond's rank nationwide in affordability slipped from 92nd out of 220 metropolitan areas researched in Q3 to 103rd in Q4. In the South region, which includes 63 metro areas in Washington, DC; Maryland; Delaware; Virginia; West Virginia; North Carolina; South Carolina; Georgia; Florida; Alabama; Mississippi; Louisiana; Oklahoma and Texas, Richmond's affordability rank slipped from 32nd in Q3 to 39th in Q4.

By comparison, three areas in our region among the fastest growing cities in America do better than Richmond. Raleigh, NC has a median income of $69,800 but a median home price of only $211,000. Austin, TX has a median income of $69,500, but a median home price of only $200,000. Atlanta, GA has a median income of $67,100, but a median home price of only $175,000. Richmond's median home price is seventh-highest in the South region, lower only than homes in the Washington, DC area and the Florida Peninsula.

Third-party inspection procedures in the City of Richmond

HBAR has received information from several members that the city of Richmond is no longer allowing third-party inspections on job sites without city approval of the inspector in writing. This requires builders to submit information about the inspectors including a resume, the address where they will work and the type of inspection to be done for every site. The city requires receiving this information at least 24 hours before the inspection is completed before issuing approval of the inspector.

Richmond Commissioner of Buildings Art Dahlberg told HBAR that the city has recently found sites where inspections were done poorly, and footings had to be ripped up and replaced. He said the city has to have a way to know inspectors are qualified to do these jobs. As local governments are forced to cut budgets and rely more on third-party inspections, Dahlberg said many localities are implementing this policy. The city will keep a list of inspectors qualified to do certain work. The builder will call in the inspection, the city will check that the inspector selected is on its list of qualified inspectors for that job, and approve the inspector for each job.

HBAR understands the city's desire to have only qualified inspectors working on sites in the city. We agree with that desire. Several builders have told us that these regulations are causing private engineers to stop doing business in the city. We don't think this was the intent of the regulation, but we also think that might have been a first reaction to the change. Dahlberg said that while there are some kinks to be worked out, most builders he's spoken with are adjusting to the new policy. HBAR will continue to work with Mr. Dahlberg and the city to give the city what it wants - quality inspections from third parties - and give the builders what they want - inspections done well and in a timely manner.

Chesterfield County Quarterly Builder/Developer Meeting

If you build or develop in Chesterfield put Tuesday, March 4 at 9:30 a.m. on your calendar. The proposed fee 13-15 percent increases for building permits, 75 percent increase for rezonings and 85 percent increase for site plan reviews will be discussed along with updates on the subdivision ordinance, traffic impact analysis scoping procedures and zoning process changes. The meeting will be held in the Supervisors' meeting room at Government Center, 9901 Lori Road in Midlothian.

New Kent County Quarterly Builder/Developer Meeting

The next quarterly Builder/Developer meeting will be held on Thursday, March 6, at 12 noon at the Quinton Community Center, 3041 New Kent Highway in Quinton. Lunch will be served. Call permit manager Dana Boothe at 966-9690 to make reservations.

City of Richmond Form-Based Code Seminar

Form-Based Code is the type of zoning that regulates patterns of development by focusing on the relationship of buildings to each other and the street. The draft Downtown Master Plan for Richmond recommends this form of zoning be implemented.

The city Planning Commission is holding a seminar to discuss the legal and practical aspects of Form-Based Code zoning Wednesday, March 12 at 6 p.m. in the city council chambers on the 2nd floor of City Hall. Presenters will include Dan Slone of McGuire Woods LLP and Geoffrey Ferrell of Ferrell Madden Lewis LLC. There is no charge for admission.