Beginning July 1, doors that have been closed to residential developers will open once again. SB1373, signed by Governor Northam on February 21, aims to fix some of the obstacles created by the Proffer Reform Act, which has applied to residential rezoning applications since 2016. As the development community is well aware, that Act was designed to address “proffer abuse”, whereby local governments went too far when negotiating development conditions on residential projects, by requiring the developer to “volunteer” a proffer that arguably had no direct nexus or connection to the external impacts of the proposed development.
Unfortunately, the 2016 Act had the unintended consequence of creating a “gag rule”, where localities felt constrained to adopt strict policies against direct negotiations with developers on active residential rezoning applications. This lack of engagement between the developers and the localities injected a sense of uncertainty into the rezoning review process, and has had a chilling effect on the submission of new residential rezoning applications.
SB1373 addresses this matter head on. It removes the “gag rule” and allows for more open and free dialogue between developers and the locality, which, in turn, will allow for more productive negotiations during review of residential rezonings. Moreover, this new legislation will help clear the path for developers and localities to adopt more creative approaches to rezonings, without sacrificing the need for fairness that underpinned the Proffer Reform Act in the first instance. While not a complete cure to the unintended consequences of the Proffer Reform Act, SB1373 presents a welcome step forward in helping to restore certainty back into the residential rezoning process in Northern Virginia.
If you would like more information on how this legislation might affect you or your development project, contact OFP Shareholder Noah Klein at 703-218-2193.