Exclusionary local tactics preventing starter home development in Virginia

This post originally appeared in the Virginia Mercury.

Five years ago, before the pandemic-driven demand for more space and the en masse entrance of millennials to the housing market, the median home sales price in the commonwealth sat at $290,000. Last year that figure hit $390,000 — a $100,000 jump over a period during which Virginians’ median household income actually shrank by $2,975, according to the latest available data.

With the demand for housing pushing up prices to crisis levels, one would assume elected officials across the commonwealth would be doing everything in their power to produce more homes, but some counties are actually making it harder to build affordably.

A cluster conundrum

The high price of land and the extensive barriers to building new housing in Richmond and its surrounding counties have pushed the demand for homes to the outer edges of Central Virginia’s sprawl. With its easy access to Interstate 64 and prime location between Virginia’s current and former capital cities, New Kent County has quickly become the second fastest-growing locality in the commonwealth.

The announcement last year of plans for a $185 million AutoZone distribution center were largely seen as a coup for the often-overlooked county. To accommodate the coming 350 warehouse jobs, not to mention New Kent’s 25% population growth over the last decade, one might expect local leaders to make it easier to add residents. Instead, last summer its board of supervisors actually decreased the allowed density of new development.

Because New Kent’s population grew more than 10% over the last decade, state code requires at least 40% of the locality’s land to allow cluster subdivisions, a development classification that unlocks permits for denser housing like townhomes in exchange for builders preserving more of the site’s total acreage for greenspace.

Designed to marry land conservation and affordability, cluster subdivisions centralize development to just one part of the parcel to preserve more farmland or forest and simultaneously lower the cost of the roads and water infrastructure that homebuilders spread across units. Under such plans, developers can build denser homes on just half of the project’s land and preserve the rest as greenspace instead of turning an entire site into single-family homes with large yards.

Whereas New Kent once allowed developers to set aside 50% of a site and build on the other half, last summer the county increased the land conservation requirement to 80%. New Kent Board of Supervisors member Patricia Paige, who proposed the ordinance, did not return emails and calls requesting comment on this column. While it sounds like a win for livability to preserve more greenspace, the reality is that developers often can’t cover their costs if they are only allowed to build homes on 20 acres of a 100-acre parcel.

“They’re essentially finding a loophole to legally comply with the state code requirement but in a fashion where the cluster subdivision provision just won’t be used,” said Danna Markland, CEO of the Home Building Association of Richmond. “The more homes you have on a particular project, the more you can spread the cost of that development across all of the homes. They raised the open space set aside so high that it’s unworkable.”

The poison pills of planning

Residential zoning that only allows single-family detached structures may garner the most attention for its intentionally exclusionary nature, but it is far from the only land use regulation that localities deploy to keep out new neighbors. Setback requirements, lot coverage guidelines, minimum lot sizes, and even inclusionary zoning standards can all be manipulated to make new development nigh but impossible.

“Often poison pills can look like plausible planning demands,” said Nolan Gray, author of “Arbitrary Lines: How Zoning Broke the American City and How to Fix It,” in a phone interview. “These rules are presented as heavily studied technical measures to improve the ordinance, but often they’re arbitrary standards designed to make housing more expensive to specific types of people.”

New Kent’s goal of increasing the amount of preserved land contained within each cluster subdivision sounds reasonable if not laudable, but closer inspection of the code’s implications for sprawl reveal the 80% set aside’s disingenuous nature, according to Markland.

“By decreasing the density in new development, New Kent is contradicting its effort to preserve rural space,” she said. “If this were truly about preserving the county’s rural character, then they would designate specific areas for higher density so that the farmland and countryside can remain undisturbed.”

With land a limited resource, each anti-density policy localities institute increases the amount of land needed to produce a single housing unit and thus raises the price on Virginians seeking long-term shelter.

“We can’t produce more land,” said Joh Gehlbach, the vice president of government affairs for the Richmond Association of Realtors. “By restricting the number of homes we build on limited land, we ultimately restrict the number of homes we can add to supply. When population growth is factored into the equation, we end up with demand outstripping supply, which results in more expensive housing.”

State standards?

In an address to the General Assembly last summer, Governor Youngkin laid the blame for the commonwealth’s skyrocketing housing costs on “unnecessary regulation, overburdensome and inefficient local governments, restrictive zoning policies and an ideology of fighting tooth and nail against any new development.”

Although some prominent members of his own party disagreed with the governor’s diagnosis, others like Del. Carrie Coyner, R-Chesterfield, spotted an opportunity to innovate. Having worked as a land use lawyer for more than two decades, she has seen excessive land use regulations limit communities’ ability to add new housing, retail, and services time after time.

“It’s important we still have zoning at the local level because we don’t know everything at the state level,” she told the Mercury in November. “But the state can come in, set guardrails, and reframe what local governments are using as the tools in their toolbox to make local land use decisions.”

The advantages of a statewide set of land use regulations could be manifold: Smaller builders could more easily work in multiple jurisdictions, planning knowledge would be more transferable across the commonwealth and localities would be unable to block all new development carte blanche.

“Establishing statewide standards doesn’t mean taking away local control,” explained Gray. “But when you have guardrails around land use planning, it disallows local governments from creating rules that are completely unworkable.”

Despite the fanfare (and controversy) around Gov. Youngkin’s Make Virginia Home plan, so far none of the administration’s bills this session would limit localities’ control over land use. Perhaps the package’s most important proposal is HJ 507 from Del. Danny Marshall, R-Danville.

The resolution directs the Virginia Housing Commission to study how revisions to the state code could “streamline and enhance predictability in local development review processes and alleviate the effects of local policies or ordinances that contribute to increased housing costs and constrain the supply of affordable and workforce housing.”

The potential passage and results of Marshall’s study bill can’t come soon enough for pro-development housing advocates like Markland.

“The ‘restrict our growth’ mentality among boards of supervisors is not unique to New Kent,” she said. “Counties’ practice of using exclusionary zoning to raise housing costs and deter development is much more the rule than it is the exception in Virginia.”