City Council Work Session   10/11/2023

Oh, stop.

Yeah.

They're well aware of that.

Richmond, for example, is a huge destination north.

How are you feeling, Mr. Coleman?

Good.

away on Monday, the week of the 16th, and I just felt that to do that, unpack, repack, but I wish I had gone, because I miss home, but I miss home, I miss home.

I miss home.

Hampton's my home, so I miss the water.

You're right.

The packet is a bit much.

It was decided to project the

Excuse me.

I see where he's going.

I got you.

But just think, if it had not been for them, it wouldn't be here with me now.

I watched the rest of the meeting last night when I got home.

No, mm-mm.

Did you watch last night, Mr. Stroman?

And I thought the discussion on the importance was great.

I was a little bit tired.

Are you going to be in our 221s this week?

Yes.

We're going to talk about it.

So are you no longer ailing?

Did you have some seafood for me?

Did you have seafood for me?

Okay, good.

Did you have seafood for me?

Thank you.

I went Monday night.

I didn't go to the... Oh, okay.

I went out with some friends of mine, but it's okay.

Did you all eat over?

Yes.

That's very posh.

Is it?

Very posh.

All of those places, and they seem like they're just one big sort of

What hotel did you stay?

Marriott.

Oh, good.

Well, walkable.

I like the Marriott.

It's been a minute.

I'm not sure where the microphone is in here.

I'm looking for it.

Yeah.

It's where the green light is?

Yep.

Okay.

Is your microphone there?

Yes.

Right there.

Hey, sir.

Hello, hello.

How are you?

Great.

I think we've got everybody here, and I'll call this meeting, the city council's board session to order.

I note that we have four folks here, and Michael Payne is home sick, I assume.

Michael, are you with us?

I am, yes.

Who's going to be allowed to participate remotely?

Is there a second?

All in favor say aye.

Aye.

We are now five, all assembled.

All right, good evening.

Thank you, Mr. Mayor, members of council.

So this evening, this is our third and third session, and we are going to be talking about population change in the city of Charlottesville.

And we're also going to be sharing a presentation on the rate of change analysis and the affordable growing unit financial calculations.

So we have two presenters this evening.

We have Hamilton Lombard from the Weldon Cooper Center.

for UVA, and then virtually we have Kyle Talente from RKG Associates.

Thank you.

I think I presented to all the members of the council.

I think I was telling Brian, thanks to maybe, except for him, at least some of y'all were on the school board before, so I think you all are somewhat familiar with the Welding Cooper Center.

We produce population estimates for all the county cities in Virginia, 133 each year.

Those go into state funding and planning formulas.

We also project out the future population going after the next couple decades.

We do school enrollment as well.

And we also are a partner with the Census Bureau.

We were quite involved with the 2020 Census Count, trying to get that number as accurate as could be.

So in this presentation, hopefully it's going to be 10 minutes or less, I just want to try to outline some of the demographic trends we see for Charlottesville, but given that we look at demographic trends across Virginia, I'm hoping to add a little context to, at least from my perspective, explain some of the factors that I see driving growth in the area, or maybe in some cases inhibiting it.

Next slide, please.

If we look at the population of Charlottesville over the last few decades,

We had a very stable population in the city really beginning when the annexation stopped.

We had some infill.

At the same time, we had a lot of families leaving the city.

The newer developments are out in the suburbs.

The population aged.

Household sizes shrunk, but we had a little bit more new development, so it kind of bounced out.

Very, very flat population for decades.

Then we had the rezoning 20 years ago, which upzoned some areas around UVA, particularly West Main Street, and that's when the growth resumed.

When you get closer to now, though, the late 2010s, early 2020s, we saw growth start to stabilize again in the city.

We had the 2020 census, which was conducted April 1st of 2020.

It turned out to be about the worst time you could have because you had the pandemic before UV is closed.

The census counted about 46,000 people in the city.

My office produced its own estimate of the city's population, that goes into state funding formulas, and that was the city's population was probably with over 50,000 instead.

We've seen a little bit more growth since then.

Going forward, we're expecting the city's population to add several thousand.

So when we get to 2030, the city's population, if our estimates turn out to be correct, will probably be around 53, 54,000 by 2020.

If it turns out the census is more accurate, maybe it'll be right around 50,000.

May I ask a question?

Sure.

Well, when we're producing these projections, we are doing them for all 133 counties and cities.

We're using the same methodology across the board.

So we're not doing any sort of scenarios based off of zoning.

So at least when it comes to these numbers, what we're looking at is the past growth trends and really looking at age distribution.

Charlottesville is relatively young.

That means it has more births, fewer deaths.

And that drives long growth really regardless of some of these other factors.

If zoning does change, there are, I think, a number of implications.

We've come back to that towards the end, talk about some of those a little bit more as we go through it.

But these projections are basically saying, given what we've seen in the last three decades, we've had new development and then more development, we're expecting moderate growth.

If we modeled it after what we saw between, say, 2003 and 2017, we'd probably be looking at 5,000, 6,000 during the 2020s.

I think what we're doing is balancing that out with the slowdown we saw in the late 2010s and the slowdown we had in the early 1990s.

Yeah, you know, I think Charlottesville isn't unique at all when you look at its growth trends over the last two decades.

You had very flat growth, a little bit decline in most smaller cities, Roanoke, Richmond, Harrisonburg.

And then you saw most of them come around in the early 2000s and do some upzoning, really trying to think about how to be more attractive, particularly for multifamily development.

And then you saw the populations grow.

And

Again, you get to about 2015, you start seeing the tide go out, and most of these areas of population start slowing down or declining.

Harrisonburg is probably the best one to compare with.

Harrisonburg didn't stop annexations early, so they have more greenfield development than Charlottesville does.

Manassas is probably a good comparison in a lot of ways.

I'd say Manassas, Harrisonburg, maybe Lunchburg are some that come to mind and kind of compare with.

Roanoke, I think, is also a good one.

We have some smaller ones that are a bit different.

And, you know, I think one of the things to keep in mind is you have some areas in Hampton Roads that are consolidated city counties, but again, maybe some comparison.

The city county system, though, is really unique.

So Blacksburg is not a city, but as a town, it's actually very comparable.

Leesburg is the same.

Yeah, the population size, I'd say that.

Of course, it's so tricky.

Charlottesville is 10 or 12 square miles.

Right, right.

So we're one of the actual smaller

cities as it relates to area?

I would say so, yes.

Okay, okay.

And are there any other cities in the Commonwealth with similar demographics, i.e.

Harrisonburg would be a very good comparison.

Of course, it is, again, bigger in area, but similar in many ways.

Winchester is, I think, also a good comparison point.

And I would say you could probably say the same thing in Varonic.

Varonic City's population is about 100,000, but its urban area is actually fairly similar, maybe a little bit bigger.

I would say those in Lynchburg, I think all those have a lot of comparisons.

They're all similar.

When you look at independent cities in Virginia, no matter where they are, even if it's Norton or Falls Church, they often have more similarities with each other than they often do their neighboring counties.

Okay.

Maybe we're going to jump to this in a minute.

I don't want to see what you're talking about.

Will this track at all students?

It does, and I'll talk a little bit about that in a bit, but it definitely does.

It should count students.

And when you're looking at this number here, this is the Charlottesville number is me adjusting for the students that the census missed.

So that growth we see in Charlottesville during the 2010s, that's based off of the estimates we produced trying to count those students rather than the census, which we show less.

Okay.

So we had very little growth in the city during the 70s, 80s, and 90s, but the region continued to grow.

We've had, when you look across Virginia, very steady growth compared to most other metro areas.

One way I try to think about it is the Charlottesville area adds about the city of Charlottesville every two decades of population.

When we had very little growth in the city, we saw more growth in neighboring localities.

Armaud County's population doubled from 1970 to 2000.

Fluvanna in green tripled from that spillover growth going out of Charlottesville into the rest of the area.

And you can see the growth picking up in the city in the 2000s and 2010s.

And what I think is notable about that is when we had growth in the city after 2003 up to about 2017, we saw less growth out in the exurbs, particularly green fluvanna.

More recently, after 2015, 2017, we saw growth pick back up in those areas.

On the right, if we see growth trends we've seen so far in the 2020s continue, this is where we would end up, which is more like the 2000s, early 2000s, more like the 90s in the last 10 to 15 years with pretty little growth in Charlottesville, but more growth out in the outer suburbs.

And this is the defined metro area according to OMB, but Louisa County gets a lot of spillover growth.

That's been the fastest growing county in Virginia the last few years.

We also see a lot of spillover growth going to Augusta County, Waynesboro, and Stanton as well.

Those aren't included in the chart, but I think it's important to understand some of these dynamics.

Charlottesville, essentially, when you have development in the city, it receives a certain share of the growth the area has, but the amount of growth we have in the area as a whole seems to be pretty stable.

Next slide, please.

I think looking, trying to understand this dynamic, understanding when the city's had growth when it hasn't, it's really useful to look at construction in the city over the last few decades.

Before 2003, we had that infill development, relatively low levels of construction, and then we saw it go up.

We had a lot of the apartments built on JPA, over on the corner, after 2010, over on West Main Street, and then more recently, we've seen it fall off a little bit, though still higher than it was before the 2003 rezoning.

One of the surprising results of the 2003 rezoning was not that only that it provided more housing for U.K.

students, which was where most of these new home apartments were occupied by,

We also saw the city's public school enrollment begin growing.

It grew right up until the end of the 2010s.

And work I did with the schools six years ago, one of the things we looked at was where students lived in the city by housing type, by neighborhood, for the last two decades.

And what we seemed to be seeing was, as you had new departments built and occupied by EVA students, the single-family homes they'd rented in the past were then occupied by public school students.

Families were moving in there and renting them.

And that boosted the city's population further.

But when you start getting into the late 2010s, the trend we saw here in Charlottesville, around Virginia and in the country, with a stronger housing market, strong economy, as more families have been renting these single family homes near UVA in Charlottesville, start moving out to the county, out to Green, Armall, Flavanna, and so the school room starts to go down.

We saw this here in Charlottesville, we saw this in most school systems across Virginia and around the country, more families moving out.

That's part of why we've seen less population growth in the city.

Another factor going on behind this, again, not at all unique to Charlottesville, is with the stronger economy, particularly for entry-level workers, more people could afford to move out of their parents, get their own place, maybe not have to have roommates anymore.

All this created more demand for housing, and Charlottesville wasn't building as much as it had before, and that's why for a few years after 2017, we even estimated the city's population had declined, even though it was still building the new housing, just not as much as before.

Next slide, please.

I think when we're thinking about growth in the city and the region as a whole, it is really worthwhile looking at UVA's enrollment.

That's been a big factor behind it.

UVA's enrollment's expanded by about 5,000 full-time students since 2000.

About half of them live in the city.

It's a big factor behind demographics of the city.

We've also seen employment go up at UVA.

But I think it's also worthwhile looking at the overall region's population growth.

It's added about 56,000 residents over that period.

While there's some correlation between the two of them, the vast majority of the growth we see in the area doesn't seem to be directly coming from UVA at all.

Next slide, please.

From looking at demographic trends across Virginia, I think one thing that's really useful to contextualize growth in Charlottesville is to look at other metro areas within about two hours of DC or less that have grown faster than the country as a whole over the last two decades.

When you do that analysis, Charlottesville doesn't jump out too much.

It has grown faster than the rest of the country.

It's grown faster than the rest of Virginia, but not by a whole lot.

But one thing I think that's unique about Charlottesville is if you try to measure housing affordability, there's lots of measures out there, a really crude one that I do like.

It's just the ratio of typical home value to the typical household income.

If you do that measurement, Charlottesville is the most unaffordable of these metro areas near D.C.

It's one of the most unaffordable on the East Coast.

It's actually more unaffordable than Northern Virginia using its crude measure, but by using that one,

And if you look at the Winchester metro area, that has about the same income level as Charlottesville.

The whole price is there about 20 to 25% less.

It's grown faster in part because of that.

It's built a good deal more housing on a per capita per household basis, and it's grown faster as a result.

Charlottesville maybe would have grown faster if housing was more affordable, attract more people.

It's hard to say.

But overall, when we look at Charlottesville's growth compared to the rest of Virginia, look how it interacts.

A lot of it, I think, is being driven by

It's proximity to Northern Virginia.

There's about a quarter million people who can move out of D.C.

year every year.

Next slide, please.

And I think that's a big factor driving behind it.

We have the Northeast Corridor and Northern Virginia as a whole.

Since 2020, we've seen that migration going out in Northern Virginia to D.C.

area really accelerate.

You can see this green band around the D.C.

area.

So many areas have been pulling people out of D.C.

If I made this map, say, for 2015 to 2020, the distribution may be when it looks that different, but I think the intensity of the migration has picked up.

Fairfair County's population is declining.

It's the first time we've seen that since, I think, the early 1800s.

There's a lot of migration going out of the D.C.

area.

A big factor behind this, I do think, is the persistence of remote work.

Stanford University does the best of remote work.

It's about the same level in the middle of this year as it was back in 2021.

Northern Virginia has one of the highest rates.

I think the best estimate I've seen is over half of the workforce is remote most of the time.

So you think about the idea that you only need to go into your office once or twice a week, once or twice a month.

Charlottesville may be unaffordable to local residents by measure I gave, but if you look at places like Arlington, home prices are 70% higher than Arbonne County.

Income levels in Northern Virginia are twice that of our region.

And if you're remote, it's probably even higher than that.

So

What we are seeing, I think, is a lot of people moving out of the D.C.

area, going out to these areas where it's more affordable, they can keep that salary, go get into the office when they need to, but it's still a high quality of life, lower cost of living.

Next slide, please.

I'm sorry, but just for clarification, if I understood you, did you said that

nearly half of the workforce in Fairfax County is?

Northern Virginia.

I would say over half of it is, by the best estimate I've seen, is remote most of the time.

I mean, this is not a question for you, but why is it the road still crowded up there?

It's a, it's a,

It's certainly a question I've heard before.

There were several studies done on the implications of remote work a long time ago, way before COVID, and all of them said their theory was that with remote work, people would be driving longer distances, not shorter distances.

They'd be driving more often, actually.

And if you think about that, if we are seeing people live much further out, driving two hours one way twice a week is actually not that bad, and the rest of the time you're not doing it at all.

But that actually can generate even more traffic, right?

Mm-hmm.

But it's certainly something being studied.

These are the projections my office produced for our region going forward the next couple of decades.

Instead, there's a lot of uncertainty because of persistence from at work.

Trying to make sense of what we're seeing here, the 2020s, we're expecting aging population cause more deaths to temporarily slow growth down.

Going out 2030, 2040, based off the age distribution we have in the region, past trends, we're expecting it to pick back up.

But as I said, there's a margin of error already when you think about going out a couple of decades.

And with remote work really being a pretty new trend that hasn't really been factored into these projections because we just don't have very many years of this new demographic trend, there's a lot of uncertainty.

So it could be higher than this because of the... Yeah, it could be higher or it could be lower.

And I would say kind of close with these two scenarios.

I had a presentation last week to a bunch of local government leaders from around Virginia and a number of

West, if you're going out to West Virginia, mentioned how many UVA employees they have who've moved out there.

And they're hours away from UVA, but if you think about the cost of living difference, it's worth their time.

State Farm had their, I think it was a call center office up on Pantop to close that.

It'd be interesting to know how many of those workers live in the area anymore, if the cost of living is very high compared to if you can work live somewhere else.

So it could be lower, you know, in that situation.

The other situation is if

There's more housing production in the region and you see remote work sticking around, the area is attractive.

You could see even more people coming to the region in the past.

In the past, we always had a lot of migration coming from Northern Virginia, but these had people either having an unusual system where they could get up, commute regularly, close to retirement, starting their own business.

Now,

Most of the workforce in Northern Virginia could in theory live in Charlottesville and commute there if remote work sticks around.

It's a lot more affordable in Northern Virginia.

It's high quality of life here.

So it's, I think there's two different scenarios looking forward.

But if remote does not stick, it would go down.

I think, yeah, I think if remote sticks, we're looking at more like what we had back in the 2010s, still growth higher than we had in the past, but maybe it'd be, this scenario was basically if remote work doesn't stick around,

That's essentially 2010s, 2000s scenario.

One of the things I've heard trying to understand that is that it's basically the way you're firing people.

When they do this, it's embarrassing to say we have to let go of 10,000 workers.

But if you want to

call your workforce.

It's a huge perk.

So you say everybody comes back in the office and then people you really want to keep you say, actually, it's okay if you stay here.

There have been so many announcements.

I see that in the New York Times, Wall Street Journal almost every week.

But when you look at the best number Stanford has, it hasn't budged.

It's about a third of all full days worked or worked at home, paid days.

The same in 2021.

Do you find that the salaries are

holding the same?

You know what I mean?

The cost of living here is less than living in Northern Virginia.

We get that.

All of us know that.

But are the people that are working remote still making the same salaries that they were making and buying a home here because it is less?

I don't know if the home is less, but our taxes are less.

That's definitely a given.

Are their salaries the same or have they leveled out

Some of these are federal jobs, right?

And the federal government is going to be very constrained on doing that.

And then, of course, contracts as well.

I haven't seen any good data showing that within the U.S.

you're really seeing an impact.

I know some corporations have had that.

If you live so far from the office, we're going to pay you less, basically because they're saying you're not going to be able to get in easily.

But when you look at the top line numbers, no.

One statistic that jumped out to me thinking about housing price differences.

It is expensive here, but Fairfax and Arlington had, when you look at the value of homes, was the highest on the East Coast after only Nantucket and Martha's Vineyard.

Arlington is just under a million dollars as the median, so half the homes are over a million.

So Charlottesville looks quite affordable in comparison.

Yes, it is.

And there are some people who would look at this data and basically go back to the very first slide and say, well, if there was an upzoning that occurred in 2003 or whatever, if you build it, they will come.

We shouldn't build it, so they won't come.

That is one narrative that I think some would argue

would put forward, and I don't agree with that.

I think that's... I'm not really asking you to... Yeah, but I think that next slide, you know, that's one factor to look at is when you don't, we didn't build it in the city, people went to green and went to Flavanna and...

It's still happening in this area.

Maybe not in Charlottesville, but in this area.

Because the leaves are still growing.

It's growing quite a bit, yeah.

And logically, we look at the implications of that, not just on our climate goals, but just the longer distance that people are traveling to work, the more that impacts congestion and traffic.

Particularly because you're taking away options.

The longer the distance people have to go, the fewer options they have.

The only one on the left is the vehicle.

And then the other point is, if you build it, they will come.

Well, it's more complex than that, and I think you would agree with this, because they're going to come anyway and displace the people who are in here.

That's right.

Because they've got so much wealth.

They've got a million-dollar house that they can sell and come in here and displace somebody else.

So they still come.

It's not a matter of if we don't build anything, people won't show up.

It's if we don't build anything, they still will show up, but there's fewer options for the people here today.

some of the nonprofits.

So I mean, I understand that we need to provide more supply, but who is that supply going to be for?

I'm just trying to put all of this together, because I know we need a lot of different housing type, but the majority of the upzoning, because it's not a lot of money into

Well, isn't, and I'm not disagreeing with you, but isn't that the goal of like the medium intensity and things like that?

Is that missing middle?

I mean, the missing middle is not for the million dollar home, but for

hopefully for people like my kids.

It's hopefully, I mean, what we're aiming for is for a wider range and more diverse choice of housing options for people.

It's also recognized new construction is always going to be at the upper end of the market, right?

That's just in fact, that's how new construction works.

But in the face of population growth, the more options we create, the new construction is going to draw in the highest value.

the existing construction then becomes available rather than not getting drawn into the high end market.

Because I used the analogy of musical chairs the other day.

We're playing a game to simplify the housing market, which is always dangerous to do.

But we're playing a game of musical chairs, but instead of taking chairs away, we're just adding more and more people to the game.

Yeah.

And so the answer is we need to just make sure there's also more trips available.

And you can see that in the data like around house sales.

Even before the interest rates spiked, we hadn't moved to the city eight years ago.

We were up in green for the first 11 years we lived in the area.

And if we had not moved into the city eight years ago,

Yeah, yeah.

Same year, we moved in 20, and we wouldn't have been able to afford, you know.

I think it's interesting if you look at the region, because that tells the tale, that even after, I guess, annexation stopped, the area's population, you said we added a Charlottesville every 20 years?

No, population Charlottesville every 20 years.

That's about right, yeah.

Remarkably steady.

The region's never had a decline.

You look at Hampton Roads, Northern Virginia, it's a lot more ups and downs.

That's interesting.

James, do you have any sense of how these other communities are dealing with this?

I mean,

Roanoke or Winchester or Harrisonburg?

Are they looking at these sort of supply side zoning models?

I had conversations with Roanoke.

They're definitely looking in the same direction.

I've had conversations with Richmond.

They are.

And then obviously Arlington, Alexandria, Fairfax, Montgomery County on the other side of the Potomac.

They're all having this exact same conversation.

There are various places on their pathway towards it.

To me, this really tells the story that it's our region because people don't, you know, they don't know whether in Charlottesville or in the county or not.

Most people.

Are we going to get a copy of these slides?

Yes, we are.

Thank you.

I know you already have.

You have a sense, I mean, the county is such a different beast, but I know that they are at least making voices about doing more for housing.

We feel like they're

behind us or ahead of us or in terms of how progressive we are in our vision for the future?

I don't know exactly where we are, where they are, but we are, we have started a series of regular meetings with their staff to talk about their confidence as well.

But they're not as constrained as we are.

Yeah, they've got land out forever.

One of the big questions, one of the big conversations happening in the county is whether to expand the growth area.

Right, right.

And that is a very controversial conversation for them to engage in.

Is that like the 500 million?

I think that's actually within the growth area.

It's kind of Route 29.

It's the immediate vicinity around Charlottesville.

Okay.

I mean, I don't know it perfectly.

I know.

What I'm saying is the immediate area around Charlottesville.

It's up 29, up basically to the airport area.

And it's going to be on.

Almost up the green county line.

Oh, okay.

I mean, look at the new developments that they're building out there.

They're just beyond the airport roads.

So north of Charlottesville.

Okay.

I guess a couple of months ago, I was trying to find, because I remember talking with you a couple of years ago about the issue about school population, and I wound up perhaps misquoting, I don't know what you had said,

and number of folks jumped all over me saying that I had it all wrong.

But I remarked that sort of paralleling what I think you had said to the group I was part of, it was part of the city council, partly the school board, I'm not quite sure who all it was, about at least a correlation, whether it's a causation is a different issue, but at least correlation between

the development of those large student complexes on West Main Street and the infiltration of more families with more school kids.

And it caused about a 250-student bump in the school system over about two years, which of course then caused you guys to project that it would continue on up to 5,000 students, which of course it didn't.

It sort of stopped after a couple of years.

But it raises the question as we're looking at, for example, a project that was being considered last night, if we're looking at other student-oriented development and other student-oriented apartments that, if built, might free up some of the spots around the, you know, in Fifeville and Fenton Bay, places like that.

So I don't know whether this is beyond the scope

to think that if we were to either, for example, house all of the second year students on grounds, which would be another, I'm told, about 1,700 students, or to provide 1,500 student apartment complex at the corner of Stadium and JPA and Emmett Street,

I think it's possible.

We're actually in the midst this fall of updating the analysis of the school division before, and I think this is a good question because there is only so much single-family housing that ultimately can get freed up, but I would suspect

If this was 2015, given our current housing stock, yes, it will affect enrollment.

One big change that we have seen happen since 2020 has been a doubling in our area of the amount of people being educated privately, either at home or private schools.

In the county, there are about spots, I think, for about a thousand more students being built currently in private schools.

New private schools are ones expanding.

Charlesville has a relatively high rate of children going to private school compared to the region or Virginia's whole.

So that is one difference.

The one question is, will you have a lot of phantoms going to those areas?

I'm not positive.

It really would depend on the housing, something I'm hoping to have a better answer to.

My hunch would be yes.

Maybe not as much as 2015, but probably something comparable.

But I would suspect far fewer of those children will be going to public school than we had back in 2015.

Yeah, yeah.

So people moving to apartments, are they moving out of homes that might get demolished and turned into a 4,000 square foot mansion?

Or is it maybe a 1,500 square foot home that doesn't make sense to demolish, but somebody can rent a house for $3,000, $4,000?

So about eight years ago, the assumption seems to have been

that a lot of the folks who moved into the flats and the standard and so on were coming from the 10th and Page and Fifeville neighborhoods.

And I think that it is, I mean, I don't know how many of those, I mean, obviously there was some sort of gentrification kind of abuses going on with richer families moving in, but I suspect there was a fair number of folks who were suddenly able to move into a

a house that had been knocked by a bunch of students and maybe there were some kids in there.

I live on Buckingham Road, which is, you know, all the way up, almost, you know, past Barracks Road.

And the neighborhood I was in a couple years before we moved in 2016, most of those homes were into students.

There's no students on that street anymore.

Buckingham.

Buckingham Road.

That used to be the majority of students.

Housing Iowan was occupied by students.

So I think you do see it, you know, the reach is pretty far out into the city.

Has anybody done, I asked this question of some folks at the university and they said they didn't really know the answer.

Do you know whether there is any data showing where in the city, where in the county UVA students are actually living?

UVA certainly knows this.

And it used to be that they had their phone book they put out.

It was all actually digital.

Someone could map this just a while ago.

I don't know if they currently map it.

There is data available from the census where you can estimate it pretty well, not perfectly, and the geography is rough.

And that's why I had that figure.

By my estimate, about half, maybe slightly less than half of UVA full-time students live in the city.

A little over half live in the county, with the dorms for the county.

You also have a lot of areas with the grad students living in law school.

Just a surprising amount who live five, ten miles out as well for usually graduate students.

You could map it.

It depends how granular you wanted to go.

Well, I guess the main question I would have is...

When you say that students have moved off of Buckingham Road, that presents a different set of issues for us than to say they've moved off of 8th Street.

And so I don't know whether, I remember 30 years ago, the big concern was mommy and daddy in Fairfax were buying up a house on 10 and a half Street.

and putting their son or daughter and three other kids there and kicking a family out.

I don't know if that's still the trend or whether that moment passed and the neighborhood is kind of the way it is.

Well, I can say just from living in that area, there certainly are plenty of homes going up Rugby Road that were not built to live in students that are generally probably pretty desirable place to live.

But the math is an investment works better to rent them out to six, 10 students.

Maybe those would ultimately get freed up.

I think a lot of that freeing up is already happening.

There are a lot of young professionals who maybe, if the rent was good enough, would take out a new apartment over the single family homes, and that might get freed up with more construction as well.

Do you know this?

There are people I work with that I've been assisting as well, I guess.

The university's 2030 plan is supposed to house second-year students.

I guess currently some of the second-year students are already housed on grounds.

Roughly half.

Okay, roughly half.

The goal is to get all of those on grounds.

Of course, the cost for the dorms, the way the university builds dorms is

for numbers like north of half a billion dollars to do that.

I also don't know if the sense I get is that President Bryan is definitely committed to this personally, but whether the board, maybe you know this is more of the work that you do, whether the board is really going to be behind making this sort of investment until it's actually sort of, I guess we could ask Bill Palmer, but

until it's actually enacted and the capital plan is put into place.

Not that I think that they would have every intent of honoring the word, but it's a big commitment.

And so I would be interested if anyone knows any more data on that.

The other thing I did here is that some of the way they build these dorms are where you've got grad students and families living in the Copley Road area, which is

not very dense.

And so that would be an ideal place to put it.

So some of those folks may actually be

I don't have any more.

I know that the university community task force working group, that was one of the recommendations to first and second year students on campus, but it was kind of, I don't recall getting nay or yay from President Ryan, but

We know that it was going to be just a big political type of thing with the parents and the students and the board of visitors as well.

So kind of lost touch of where that stands.

I mean, I know I've heard from some private when that happened, some private student developers in town to say, you know, we provide a viable service to the community.

Well, you know, when I was

I was elected almost four years ago.

I can't remember whether it was even before I took office or immediately after I took office, I got invited to have a bagel at Bodo's with some of the owners of the large companies that house a lot of students.

top 11 property owners in terms of sale of property taxes paid.

Barracks Road Shopping Center was number one, and numbers two through 11 were the companies that own these student-oriented housing.

Basically saying, don't do, of course, I would tell him, it's not us, it's the university who's going to do this, but it said, don't encourage them because it's going to kill us.

and they're certainly concerned about it.

If they were going to house 1,700, it's going to take 1,700 students away from their market.

We're getting all of these large projects that are still coming along JPA.

It was interesting, DML, one of the sessions I sat in on

The person was talking about doing a financial analysis.

It was really geared more for like mixed use type commercial, essentially partnering in a way with developers to be able to get tax receipts, but also realizing the costs that were involved in sort of developments.

But the comment the guy made was that student housing had gone through a boom and was going, was plateauing in terms of

that particular market sector across the country.

So we're one part of that, not the average, I guess, but it is interesting to me if the university is planning to do that and given what we're doing, how the business models of some of these developers catch out.

Yeah, just pulling it up in the university's 2023 strategic plan that does specifically say that their goal is to house all second-year students on grounds, but there's...

Obviously a lot of certainties in the timeline.

And then another factor is that they're currently considering using on campus residences that house people above second year for second years, and that's about a thousand beds.

So if they go that route, the total net impact would actually be a lot smaller than the top headline of all second years on campus.

That's not peanuts.

And the other question is, what can we reasonably expect from the university in terms of their own growth?

I talked to a couple of university officials a week or two ago who said, oh, the university is not expecting to grow.

I talked to another somewhat senior official a year or so ago who said that they are projecting a 0.75% year over year growth.

reminds me back in the 1980s, it was on a planning commission and we would meet with what was then called the PAC Tech Committee, the planning and advisory committee, technical committee, which was the planning commission and planning staff level meetings.

And we would hear every year, we're not planning to add any more students, but every year they would add another hundred students.

And eventually I came to recognize that the key word there was planning.

They were not planning.

but they were still adding the students.

So the university has grown at about a 0.9% a year growth rate, year over year, basically since women came in 1970.

Charlottesville has grown at a year over year 0.9% growth rate.

And I have

have been so bold occasionally is to try to draw a causal link there.

And while the causal link isn't perfect, I think there's some causation there.

I mean, actually...

I mean, I read this somewhere about a month or so ago.

There's only four schools in the state that have saw an increase.

UVA, Virginia Tech, William & Mary, and George Mason.

All other schools have been plateaued or gone down.

Not James Madison?

Okay.

Well, James Madison has grown phenomenally over the last couple decades.

One thing we know is that the political pressure from Richmond, which will not be accompanied by dollars, but at least the political pressure from Richmond is going to be to continue to find more seats in classes in Charlottesville for the kids in Fairfax who are going to the good schools, who are getting the good SAT scores.

and that realistically that pressure is always going to be there and it'll come if nothing else through whichever governor appoints to the board of visitors and so we are likely to see that pressure even if they don't send any money along with it they will send the pressure along with it and we will then have to deal with that growth whether we like it or not and whether we're getting any help in dealing with it or not.

And so part of what I've been trying to think about is if we assume that the university is going to continue to grow at roughly 0.75% a year or roughly 1% a year, whatever the number is, that's 200, 250 more students a year.

By 10 years from now, that's another 25,000 to 3,000 students.

and certainly by the year 2050, if we're thinking about using 2050 as our ultimate goal because of our carbon neutrality goal and so on, we can reasonably assume that the university will have grown by perhaps as many as 10,000 more students.

If the 0.9% projection continues for Charlottesville, then we're up in the 60, 63-ish

range.

But one of the things that has concerned me is that as I look at the chart, if you would go back one in the slide deck to the rate of growth of the Charlottesville, of the city of Charlottesville,

Can we go back one of those slides?

The slides right before that?

Yeah, there we go.

So what we see is that in the 2010 to 2020 time period, where I say maybe it's better to look at about 2005 to 2015, the growth rate was higher, and then it

It's sort of kind of leveling off again.

Between 2010 and 2022, according to if we use the census data from 2010 and the Weldon Cooper data from 2022, we get a 1.4% annual year-over-year growth rate during that 12-year period.

Obviously, if you carry a 1.4%

like 77,000, not 68,000 or something like that.

So that's the kind of, that's a number that has the potential to be scary.

I mean, I can kind of think about where we might, how we might decide to house a few thousand more students, but where we might decide to house 10,000 more students, let's say 5,000 become Charlottesville residents,

or where we might decide to try to house another 10,000 people in Charlottesville or much less 15,000 people or 20,000 people in Charlottesville.

Now we begin to have a fundamentally different planning problem.

And that's one of the reasons why I wanted to have this conversation was to see if we could figure out what we're really dealing with and if we should be planning for

Charlottesville in the year 2030 or 2040 or 2050, what kind of a city are we looking to plan for?

I'll say again what I've said a couple times, maybe not in this public setting, and one of the things that concerned me about our comprehensive plan was that whereas Richmond will say

their comprehensive plans of Richmond in 2040 or Roanoke in 2045.

We don't have any similar timeline in our comprehensive plan.

We didn't tell people two years ago what we were planning for.

So, I mean...

Isn't that the numbers of the population growth, what we plan for?

I'm not sure if I understand.

If the rate of change is like this, if we extend this line on out, we're at a much higher point than if we're extending this line on out.

The question is, are we truly looking at

a set of numbers that amounts to a projection of the last three or four years, which first of all, we've got a lot of funky things in those numbers.

Second, we've got what I believe to be the case that our numbers may be somewhat lower than say 10 years ago because we don't have that many places to add housing units.

In other words, we're not dealing with the housing demand.

We're simply not housing as many people and therefore we're only housing the people who can afford to buy in.

It makes a big difference whether we're planning

So are you saying that the proposal of zoning may be too much?

Yeah.

And then try to figure out if our goal is, if we think we know that by the year, let's say 2040,

that we think the population is going to be 65,000 people or whatever the number would be.

What do we have to do to be able to accommodate that kind of growth?

It may well.

I don't have the

The charts and the graphs teed up right now, but that's the kind of discussion that, and I use 2050 for two reasons.

The first reason is because that's what this zoning plan is sort of based on, is the idea that we want to get to a walkable city with zero net emissions of carbon by 2050.

So at least in one part of our planning, we are already planning for 2050.

The problem is that

We're not planning the rest of the city for 2050.

We've just got one number, which isn't even an input.

It's an output.

Planning based on an output without planning for the inputs is not planning.

If I may, I think if you want, you could probably get a pretty good number for 2015.

2050, I think, I don't know what's in the following presentation, but if you have a good idea what the build-out rate might be, even a couple scenarios,

You can apply expected household size depending on what's going to build and get you a pretty good idea where you might be depending on what the build out scenario is.

I think the percentage rate is, you know, is it's kind of a good sort of rule of thumb, but it is really based off, you know, we know the region is probably going to grow by about 50,000 every 20 years.

Then how much will be in Charlottesville is based on how much is built here.

But we also end up choosing our population.

We end up choosing to build only that which rich people will buy.

No, no, no, no.

I completely agree with what you're trying to do here and see the logic of it.

But assuming we had a reasonable

about a reasonable build-out.

Yeah, that could be even the low side, honestly.

Okay.

In fact, if we were to go at 1.4% until 2050, by 2050, we would have roughly 77,400 residents.

And you're using...

basically compounding.

Yes.

Yeah.

Year over year.

So, and again, that's historically kind of, well, I shouldn't say, sorry, that's what it was for the period between 2010 and 2022.

Yeah.

If we look at

at a 1% growth rate year over year, by 2050, we would have 68,500 residents.

And so that's probably pretty close to the historic, truly, you know, the trend going back to 1970.

So 75,000.

I think that if we had the assumption that we had, you know, a functioning housing market and people, you know, could move right now as a kind of ceiling because it's not adequate housing for it.

Okay.

What's your name again?

Hamilton.

Oh, okay.

All right.

So Hamilton just said,

We are constricted because we're only 10 square miles.

He gave us some cities that are similar to Charlottesville.

Nothing is like Charlottesville, but similar.

So if you have 10 square miles, even if you're considering the whole density issue, you have to have somewhere to build for the density.

But there's only so much land.

Even if you go up,

When we look at all of these little things here, I mean, I'm not saying we're not going to get denser, but if you look at, oh gosh, whatever page it is, the feet, you know, the number of feet that you can have in order to build up or whatever you want, there's only so much space.

I mean, if you only have 40 feet on either side or 30 feet on either side, you can't build something that's 50.

So there's a lot more people we can put in the city.

And that is what the folks who've been driving this, particularly from the Planning Commission, I haven't talked to them about their numbers, but they're probably thinking of

But how many plots of land are there within the 10 square miles that will accommodate that 15 story building?

I don't disagree, but I'm just saying at a certain point,

You've run out of land.

Look at how big has Manhattan.

Duh.

That's bigger than 10.

I know, but it's really dense.

Yeah, they got life.

I'm not saying we want to be like downtown Manhattan, but I think.

Well, I don't know, but I mean, maybe we do.

And I think that's something else that

not this council, but maybe going forward, you know, when you're talking about density, what do you want the city to be?

Is this going to be a city that includes upper middle class, middle middle class, and lower middle or moderate lower class individuals?

Are you going to be a retirement community where everybody from the Northeast that, you know, sells their property and moves here like they did to Miami years ago?

Are you going to be a place for just trust fund babies?

I mean, what is it that we want to see our city be?

Well, I mean, what the people, what the folks who've been advocating for this effort for the last five or six years would say is they want something that can handle everything you just described, except maybe the trust on babies.

And so that's why they and the consultant, James, but that has been the mindset behind this whole thing is to create as much options

across every possible segment.

Oh, no, I don't think we're recruiting.

I think you're replacing.

If you looked at the little...

diagram that we had last night.

Okay, Brian, you and I were sharing because the gentleman from Mr. Freeze's office gave it to us because we were talking about the parking space.

They're going to have studios, one bedrooms, two bedrooms, three bedrooms, and four bedrooms.

Five little places in there.

All total is going to be 1,500 beds.

So unless they are students who are coming from means of

you're not gonna be able to afford a studio or one bedroom in there.

And so what I'm saying is, even if you take the 1500 children and put them, plop them in this building, if that building is approved, then wherever they are sprinkled through the city, you are gonna perceive that you have spaces for 1500 people.

But are those spaces for the 1500 people

going to be affordable because they're going to have to be repaired.

Yeah, I'm not sure.

I mean, have you looked at a house lately that students have lived in?

I mean, I'm just saying, I mean, and I mean, look, I love students just like I love everybody else, but I'm just saying, if I'm renting the students as a property manager, when those students move out,

There's a certain amount of repair that has to be done, and that repair is passed on to the next consumer.

Well, again, the idea is to build as much stock across the various types of product to make that possible.

Right, and one of the angsts that's in the community now is that we're trying to spread that throughout the entire city, places where maybe they hadn't seen that type of density before, you know, because there's some lots that's in

So if you don't mind, there's been studies that part of growth that's unforeseen is hard to have a crystal ball.

is the trend of retail and shopping centers will eventually not be as popular as it is now.

And that will be the next space for future density development.

Those will be converted from commercial residential.

Since we have our expert here, these are all discussions we need to have.

And I don't mean to cut off the discussion, but we've got an expert here, an expert we're looking to join in and talk about some other things, both of which will feed into this discussion.

Well, sure, why not?

Yeah, I'm comfortable.

That's fine.

or do you need some more time to run your numbers?

No, the numbers are fine.

But something for us to have an example for.

I'm an example person.

The difference between the 1.4% leading to 77,000 and the 1% leading to 68,000, it's about a 10% difference.

If we say 75,000 plus or minus 10%,

It does.

One thing to keep in mind is if we figure the area is going to add, say, 50,000 or so here in 20 years, you're probably figuring you're still taking less than half the region's growth.

So that's why I said 75,000, we see it's a little on the low side.

Okay.

We're also 27 years out.

So if we see that the 1.4% isn't happening, we can readjust.

Every five years, we have a comp plan.

The fact is we didn't readjust between 2013 and 2021 even when we adopted.

Any more questions for Hamilton?

Any other questions for our demographer here?

We love your department.

Thank you, sir.

Okay.

Now we want to get to our economists.

So I'm going to keep it over.

Thank you.

Good evening, everybody.

My name is Kyle Celenti.

I am the president of RKEG Associates.

We are a real estate economic development and planning consulting firm up here in the big bad northern Virginia.

On behalf of everybody here, I want to apologize for all the angst that we have created for your community.

with that James if you wouldn't mind getting my presentation up so I can see it too and then we can get started.

Okay, so as as it's getting pulled up on effectively what we were asked to do is update some previous analyses that were run as the city was considering its housing policies.

There are two particular analyses that we ran, both financial related, trying to understand, on the first hand, the potential rate of change of the proposed rezoning classifications of RARBRC within the areas that they are designated.

and the second is, next slide, please.

And the second is understanding the financial feasibility of the IZ policy or the affordable dwelling unit program ordinance that the city is considering.

Yeah, move Pam.

Can you just minimize there?

Am I taking up too much?

You know, James tells me I have a gigantic head.

That's good.

Excellent.

Fire away.

All right.

So, um,

As I mentioned, both of these analyses are financial related, which is understanding for the rate of changes, what would the potential new value of those properties be based under the new zoning and then how would that potentially affect ownership patterns

and for the ADU policy is understanding the viability of putting in place a requirement of a set aside, which is how many units have to be provided at an income control level and then what is the target income rate that we're going to go after.

I'm not going to bore you to tears with information on this.

If you want to ask some questions, I'm happy to answer.

But the modeling takes into account three primary areas.

There are three

functional analyses that need to be done.

On one hand is the construction of the project.

Obviously, you have soft costs, you have hard costs, you have land costs.

So you have to understand what it's going to cost to get the project developed.

And on the other hand is the operation.

And when you operate a property, there's revenues, everything from rental rates and parking revenue for a rental property.

And then the sales price, if you're building something for ownership, you're going to build it and then you're going to sell it to the

the next owner.

And then, of course, along with that is the operation costs.

Now, obviously, for ownership properties, there are very minimal operation costs because you're going to sell it and then you're out of the deal.

But for rental, you have everything from financing costs, debt and equity to pay for the project, but also all the costs that it takes to keep the property up and running.

So what we did was we created a customized model

that is specific to Charlottesville so that we could test both the rate of change and the ADU policy to understand the viability and then what the potential impacts to the community.

Next slide, please.

So under the rate of change analysis and what you're looking at now is how we, if you will, broke the city down into its component parts.

And the reason why we did this is twofold.

One is through our analysis, we realized that not everywhere in Charlottesville is the same.

Rent revenues aren't the same everywhere in the city.

Ownership values aren't the same everywhere in the city.

And so we wanted to make sure that as we modeled this, we were

looking at what the potential impacts were based on where you were located in the city because it's not a one size fits all.

And secondly is around we wanted to make sure we identified the sensitive neighborhoods, understanding that those communities have comparatively lower residential property values than other parts of the city.

So what you're looking at here is a map of the different areas that we identified.

We gave them very unoriginal names of area A, B, C, and D.

As you can see, area A is in the green, area B is the yellow, area C is orange, and area D is the maroon.

And obviously areas C and D are very reflective of the sensitive neighborhoods that I just mentioned.

Next slide, please.

So what we did was we built upon the work that was done previously.

We updated all the market data based on 2023 trends.

And I will tell you that

The valuations and the price of housing has gone up quite substantially in the past two years within the city.

I think that's not a surprise to anybody, but it was timely that you did this analysis, though, even though the previous analysis was done not long ago, that if you don't mind the euphemism, the world has changed.

And so understanding that was important.

So we compiled the new market value for properties impacted by the zoning change.

So we focused on the areas that were going to be rezoned to RA and RB and RC, respectively.

We calculated what the new market value would be based on the new uses.

So if we were allowed to do in RA, we're allowed to do up to three units or four if we keep the existing structure.

RB was six.

and up to eight RC and so forth and so on.

And so we had to calculate what the value of those properties would be, what the value of the land would be to a potential buyer if they were going to take advantage of that development.

And then we compare that to the existing values that came out of your property assessment database and our market valuation analysis to understand what the potential change of that value would be.

And so we broke it down and we're going to show you some graphics in just a moment to help with the explanation, but understanding what the potential of someone willing to sell that property for redevelopment or infill development if they're going to keep the existing structure would be.

And so we broke it down into is the higher existing value higher than what the new value would be?

And obviously they're not going to sell because you would lose money in that regard.

And then we looked at it as up to 25% higher, 25 to 50% higher, more than 50% higher, and gave them different penetration rates, or if you will, that's a technical term, but what is the likelihood someone will sell?

So if I take a moment here and step back, imagine the home that you live in, if you owned it, and if you do, you own it, and someone knocked on your door and said, I'm going to give you 80% of what the value of the house is today.

Well, obviously, you're not going to have any interest of that.

Now imagine if they said, well, I'll pay you 10% more than what the house is worth today.

I can't speak for all of you, but I can say for me with two kids, one in high school and one in middle school, the likelihood of me being willing to relocate for just a 10% bump in the value of my house is very, very low.

Now you show up at my door and say, I'll double what the value of your home is if you move out tomorrow.

Now we can have a conversation.

And so the model takes into account these different value differentials.

to understand what the potential impact would be.

And then we calculated the number of parcels that would be acquired annually under these what I'm calling penetration rates to allow for the new amount of housing that's being proposed on those properties.

Next slide, please.

So we looked at RA and the graphic you're looking at here is the percentage of parcels where the existing value in green is above what the new value would be.

Yellow is within zero to 25% below.

Orange is 25 to 50.

And then

Red is 50% below.

So as you go into the upper levels of the graphic is more likely someone is going to be willing to sell those properties.

So area A, if you remember that from the previous map, you could see about 30% of the parcels are valued more today than they would be under the new zoning.

It's almost 70% in area B, but it's only about 18% in area C and D.

which are obviously the sensitive neighborhoods and that translates if you look over on the left hand side of the screen to annual rate of change for RA of about 2.4% annually at area A or about 77 parcels of 0.81%

annually in Area B are about 30 parcels, and then 3.32% annually in Area C and D are about 69 parcels every year based on those rates of change and the differential in value.

And so from our perspective, one of the big takeaways here is the impact on the sensitive neighborhoods is going to be greater than the impact in the other areas of the city.

And as you can see on the right hand side as to why is the fact that the new value created by the rezonings is going to be much greater in many cases than what the current value of the properties are.

The next slide, please.

So with the same analysis for RB and what you're going to see here for RB and then even more so in RC is that rate of change goes up because we're allowing six units base instead of three and up to 12 units with the bonus density instead of six

You're creating greater value.

If I'm going from a single unit to 12, and even if six of those 12 have to be income controlled through the ADU program, you're just creating a substantially greater value.

And so you're likely going to see a higher rate of change.

And that's exactly what you see here.

It's gone from in between, you know, less than 1% up to three and a half percent to between 4.6% for area B up to 7% annually in areas C and D. Yet again,

The sensitive neighborhoods are likely going to be more highly impacted because of the differential in value between the rezonings and the units that are currently there.

And if you look at the graphic on the right hand side, you can see in area C and D virtually none of those parcels are worth more today than they would be under the rezoning.

And most of them, over 75% are

going to experience a 50% increase in value over what they're valued at today.

And then if you flip to the next slide, you're seeing more of the same.

Now that we're getting to an even higher level of development intensity,

the potential impact and the potential rate of change.

Now it normalizes across the areas because you're creating so much value with all these new units that you will likely see a similar rate of change.

But as you can see, you're talking, you know, 7% annually in each of those areas.

I'm sorry, was someone about to ask a question?

This is a moaning SO.

Okay.

Next slide, please.

Just a second.

I'll ask you one question.

The report that you had given us a couple months ago contains almost exactly what you were just showing on those charts, but they're off by a few little decimal points.

Did you all recalculate something?

Yes.

So we worked with the advisory group and they asked a series of questions and we went back and we did some fine tuning of the model to reflect the questions and comments that they had.

And as a result, that has impacted what the value creation would be.

And so we went back and modified some of the revenue numbers.

We went back and modified the output.

One of the big areas that they were asking questions was around, can we

look at the bonus density where only one of the units has to be affordable as opposed to, you know, 100% of them has to be.

So as we went back and modified the model and also with our interviews with developers, we continued to collect more information after that first iteration was created.

And so we have continued to update to try and get it to be as close to reality for Charlottesville as we can.

And so that's why you're seeing some modifications from the from the original submission that we have provided.

Thank you.

Yes.

So so some of the kind of higher level assessments that that came out of the analysis, obviously, the new zoning classifications are going to have an impact on current development patterns.

When I have a parcel that has a single structure on it or a single housing unit on it and I can go to six or eight, you know, you're going to create value.

And as a result, there's going to be interest from the investment community to acquire those properties and and

execute upon what I'm allowed to do.

As you saw, obviously, RA, which has the least intensity in the new zoning, is going to have the least impact, as opposed to RC, where you're able to get substantially more out of the property, and as a result, you're likely going to develop it.

But the one caveat I want to give

is that the rate of change doesn't consider the physical capacity of these parcels.

And so we weren't able to, under the timeline or the budget, to be able to go through parcel by parcel and say, well, this one can only accommodate six units, even though they're allowed 12, or this one can only accommodate two units, even though they're allowed three.

And so this is what I would say are conservative numbers.

They're probably not going to be actuals.

There's probably a number of parcels within the proposed RARBRC zoning that can't accommodate the full level of development.

So as a result, won't create the full value opportunity, which then will impact the potential consumption for redevelopment or infill development.

And so

I just wanted to bring that up to say the numbers you see are probably very conservative.

The actual impact probably would be lower on a year by year basis if we had the time and the resources to be able to go through and hand analyze each property within these potential zoning designations.

Next slide, please.

So somewhere in the report,

that we got a couple months ago, there was a mention, sort of that warning that these numbers are likely to be projecting a higher degree of change than what we're likely to really see.

Are you thinking that maybe it's, that the actual rate of change might be half of this, or is there any kind of

I think half is excessive.

I can't give you a real good range because I'd really want to look at the parcels and be able to give that number.

You know, I would say, is it twice as what it's likely to be?

No, I don't think so.

I think it may be, you know, if I had to take a wild guess here, maybe it could be as high as 20% above what it would likely be.

But once again, that's going to be dependent upon the parcels that are in the community.

I will point out though that what I think will remain constant is the relationships between the different areas of the city, because the reality is the value differential in area C and D are substantially greater than in the other parts of Charlottesville.

So while the nominal numbers may differ, I think the relative impact is going to stay consistent across the various

sub areas that we analyze.

Okay, thank you.

Next slide, please.

And then, you know, we also looked at it, like I mentioned, we also looked at it requiring income controlled units to access the bonus density.

It does create a positive value, but not as positive as the base zoning does.

And so what does that mean?

It means all things being equal, an investor is more than likely just going to take advantage of your base zoning than being willing to take full advantage of the full development if 100% of those

bonus units have to be income controlled.

And so this table you see below here kind of reflects what the residual value of those parcels would be under a hypothetical three-unit, four-unit, six-unit NRA

base zoning, which is the very first column, as opposed to allow it to do six units, but three of them have to be part of the ADU program, which is the first column in the set of tables on the right hand side.

And so while it does create a positive value impact,

It's not near as strong as if I just did the base zoning.

So all things being equal, it is highly unlikely that an investor will want to maximize the bonus opportunity based on the current structure of it.

Now, if you change that from all of the

of bonus units have to be part of the ADU to one.

Well, that changes the story quite substantially because in RA, I can get you five market rate units and only one ADU as opposed to three market rate and three ADU.

So my point of bringing this up is one, as it currently stands,

all things being equal, you're probably not going to get many ADU units out of the RARBRC zoning designation.

So just to kind of clarify in my own mind.

So the way to read this information would be

Yes.

So that's what someone would be willing to pay for a parcel to be able to build the eight units on that parcel.

I want to say this accurately.

In area C and D, there would be an investor likely willing to spend that much to buy it.

Now, will they?

That's a different story.

Will the property owner know that their property is worth that and ask for that?

Highly unlikely, unless they're truly tracking these conversations.

But all things being equal, I can hit my return expectation

Okay, thank you.

There were these numbers too.

I'm sorry, I didn't catch all of that.

No, I'm saying that the developer is running these numbers as well and seeing what they'd be willing to pay and what their profit would be as well.

And so the other point here is that based on what area of the city you are determines whether it's more advantageous to do ownership or rental.

So areas C and D where rents are at a premium in Charlottesville are more advantageous as a rental

redevelopment.

So I just, you know, can we stop for a second because this is, and I know we talked about this some last week with Sunshine, but this is the concern that, you know, we have in, in, in,

those sensitive communities that this zoning will, you know, put them more in danger of changing, you know, more quickly.

And so, you know, we talked about some options last week of, you know, holding off until we do the plan, but, you know, specific area plans in these neighborhoods

But that's not likely.

So anyway, I'm just kind of thinking out loud that this really kind of puts the numbers to what, you know, a lot of people were feeling, you know, what was what would happen.

And it's kind of ironic that these neighborhoods are adjacent to the university, because I think that that's why they're, you know, that they're so much in danger of changing and changing now.

So anyway, I'm just

I'm trying to understand this page because I really don't.

But explain to me just the upper leftmost number on there, Area A, RA, Rental, 274, 443.

That number reflects what an investor would likely be willing to pay for a parcel

in area A in the RA zoning to tear down the existing structure and build back a three-unit rental property.

So the same area C and D are a...

Somebody would be willing to pay $444,000.

Why is that more than in Area A?

What's the difference there?

Not many.

So if I've got RC and I'm in Area A, it sounds like I want to be building condos there.

Yes.

I don't remember having seen these numbers in the document that was sent to us a couple of months ago.

No.

Well, I mean, these numbers have existed always.

I don't know if I included it in that analysis because I felt it important to show

Well, I appreciate it.

And just one last question.

So could one interpretation be, let's say you're in area C or D, you're zoned RB and you're a renter.

If the current assessed value of your property, if you were to look at the parcel that you rent on, if that assessed value was currently less than $88,000, there would be a decent probability that at some point in the next several years, an investor would buy that home and your rental situation would be impacted.

Without question.

I think that's a really, really important thing for us to consider is

that impact on renters who are 60% of the city and a higher proportion of folks in areas C and D even than that compared to other areas of the city.

Yes.

And if you're a homeowner, you build that wealth.

If you're a renter, you're just screwed.

That's a very good point.

And informally, we have a lot of predatory cash only offers well below value currently.

That is not uncommon.

I do this type of work mostly up and down the East Coast from Atlanta to Boston.

So I assume that these

Correct.

The only thing that would change that is if market demand changed, and as a result, the

consumer, whether it's a homeowner or renter, willingness to pay would change.

And then the two grids on the right are assuming that all of the additional units are going to be affordable.

And that proposal has undergone a number of changes over the last couple of years, and who knows where it's going to turn out, but it's good to have that general reference.

Yes.

So similar to the rate of change, we broke the city down into various market segments based on their market performance, based on desirability, based on the feedback that we got from the development community in terms of where the greatest demand is and the different types of demand.

So what you're looking at here, areas E,

F, G, and H are subsets of the city.

Obviously, H is mostly downtown, G is Rose Hill, and then E and F surround the university.

And then the entire rest of the city is I. And just so you understand, I is pretty much everything that's not inside one of those black circles or black shapes, I should say.

Downtown is not a circle.

And the reason for that, simply put, is the market, while different,

The price points don't vary substantially once you get outside of those four primary study areas.

Next slide, please.

So what you're looking at here is the financial performance of developments by sub area based on the size of the project.

I color coded it to try and make it a little bit less confusing, whereas green means it's feasible and the market would likely execute on it.

Yellow is kind of on the borderline, orange is experiencing some challenges, and red is not market viable.

And the top set of graphs are a measure called return on cost, which is an assessment of the property is stabilized, and then what is the total cost to build it?

You divide the net operating income by the total construction cost, that gives you the return on cost.

In the market today, just so you understand,

6% return on cost is the go-no-go threshold for rental development.

The bottom tabs are the bottom tables, three of them across the bottom there is what's called the internal rate of return.

And unlike return on cost, the internal rate of return takes into account the time value of money.

So it's analyzed over a period of time.

And it also takes into account debt and leveraging and the money that it costs to operate

the property beyond just the calculation of NOI.

Just so you understand, within the marketplace as of now, a 12% IRR is what's considered the line for going to go.

And so the reason why I show you both is a project has to pass both of those tests for an investor to go forward.

The return on cost analysis is more geared towards

debt financers because they want to make sure that if something goes wrong, they're going to be able to get paid back if the borrower goes into default.

The IRR is more along the lines of the developer investor because they have a long-term hold in the property.

Those percentages, 6% for return on cost and 12% for IRR, internal rate of return, are not my numbers.

Those are numbers that are generated based on the market and ones that we've collected.

So what are some of the takeaways here?

Well, number one is Area I, outside of the four main rental markets, either downtown, adjacent to downtown, or near the university, isn't feasible really for multifamily development of any type.

It's marginal, but not really the preferred use.

And

If you remember back to the rate of change analysis, all things being equal, an investor would most likely do an ownership project out there anyway, because those areas are much more profitable from an ownership perspective.

The second thing we learned is that if you do a development that requires

Any form of concrete and steel development, whether it's a podium development, which the first or second floor have to be concrete and steel, and then the five floors above that are wood frame, or it has to be a pure steel frame construction because you're going above six stories, is not feasible in the marketplace today.

The simple fact is the cost of construction for steel frame is too high for even the market rate

rents that are being generated in the city.

The only potential exception to that, because every time I give you a rule as an economist, of course, there's a reason to break it, and that's how I protect myself, is for student housing, because the rent on a per square foot basis for student housing is well above what's called the family market or the traditional renter is willing to pay.

Those units rent way higher

on a per square foot basis because of the manner in which they are rented and the individuals they are rented to.

But so if you look at this in the areas highlighted in black, you can see no matter what you do, even market rate, it is highly unlikely in today's market, even for a straight market rate deal where there's no ADUs, it's just not financially feasible to do steel frame construction or podium construction.

So building code allows five stories wood frame to go to six.

You are required to do one form of concrete and steel.

I don't know, Charlottesville off the top of my head, but like International Building Code, I believe you can do seven stories, two concrete and steel and five wood frame.

Yes, absolutely.

And that's an important distinction for your zoning code because your bonus density allows you two more floors.

And the reason why that's important is the only zoning codes where someone would be willing to take advantage of the bonus density is in your areas where it's zoned to three stories.

because they can go to five.

And so I can stay within the wood frame construction.

And the only change I have to do is I have to target a 50% of AMI instead of 60% of AMI.

In the areas that are five stories or eight stories at the five,

I can go to seven but to do that I have to do two levels of concrete and steel and so that's going to destroy the project so I would never take advantage of the bonus density and like I said at eight stories or ten stories I'm not doing the deal even at market rate let alone I don't care you're going to give me bonus density it just makes the project worse to be honest with you unless the market thinks it's a good enough location for UVA student demand yes yes yes and and and I would say even that is not a slam dunk if you will uh

is the challenge.

There is challenge to that, too, because construction costs on a per square foot basis are, I'm guessing off the top of my head, I could probably open the model and tell you, but like $120 to $150 a square foot higher than for wood frame, which is substantial.

Next slide, please.

And so similar to the rate of change, I wanted to do some summaries of this.

The proposed ADU policy, forgive me, is appropriate in your traditional rental development areas, areas EF, G, and H.

10% of the units at 60% of AMI, they all remain financially feasible as long as you're in the wood frame construction, so you're five stories or less.

However, downtown could support greater affordability.

Areas G and H, the rents are higher there than they are in E and F.

And as a result, by our analysis, they could support a higher set aside or a lower area median income even before the bonus density and still remain financially feasible.

Now that will require you to do a bifurcated ADU policy where you say if you're in this downtown zone, your ADU requirement is that.

And if you're in this zone over here, your aided requirement is this, but it's something that you could do.

I would encourage you not to try and maximize it for the entire city because you could then push areas E and F out of the picture, if you will, because you would make them infeasible.

Next slide, please.

As I mentioned, I don't need to belabor this any worse, concrete and steel construction is not supportable at any rate or fashion right now, with the possible exception of a student project.

Next, please.

So that's the findings for both the rate of change and for the ADU policy assessment, but there were some considerations that we came across

in our analysis that I wanted to put in front of the city as you consider this.

And one of the areas is how to address a partial unit calculation.

So if I have to give 10% of the units and I'm building 55 units, I owe you 5.5 ADUs.

Well, I can't build a half a unit.

So what happens to that 0.5 unit?

And so

What we've learned through our experience, and it holds true for Charlottesville, is if you do what's called the roundup, which means if I build 55 units, I have to give you six.

If I build 51 units, I have to give you six.

But if I build 50, I only have to give you five.

You're going to create tiers of development.

So even if my property may be able to accommodate 53 units, I'm not going to build them because the cost to me is going to be worse than if I just build 50.

And so our suggestion and the thought is to allow for a partial unit payment into a housing fund rather than requiring them to deliver that whole unit.

That is going to be particularly impactful on smaller projects.

If I'm doing a 10 unit project, I owe you one ADU.

But if I want to do an 11 unit project, that 11th unit has to be an ADU.

Well, that's going to financially hurt the project.

And so I'm not going to do it.

So that's a consideration.

Payment in lieu, how to address developers who want to opt out of delivering units on site and or how do you calculate what the value of that partial unit is if I don't make you build it.

That's a very exciting conversation.

There are multiple ways to calculate it.

You can set a flat value that you pull out of thin air.

Other communities have done that.

The two approaches that we always encourage our clients to consider are what's called the value gap approach and or the total construction cost approach.

Next slide, please.

So the value gap approach simply is how much is the unit worth for market rate and how much is the unit worth as a ADU subtract the one from the other and

That's the value difference.

So if the unit is worth $100 as a market rate unit, and it's worth $50 as an ADU unit, the value gap is 50 bucks.

So if you don't want to build that unit, you have to pay us $50 into our trust fund.

If you owe us a half a unit, you have to pay $25 into the trust fund.

And so that's how value gap.

It's basically the gap between the value of the unit at market rate versus an affordable or an ADU unit.

The other approach is construction cost, which is very simple.

How much does it cost to build a unit, a multifamily unit or an ownership unit?

And that's what the value is.

So if that value is $500, well, if you owe us half a unit, you have to pay $250.

And the construction cost doesn't take into account the difference between market and ADU.

It's just the cost of a unit.

And there are benefits and drawbacks of both.

Obviously the construction cost approach nets more revenue to the city, whether it's a buyout of having to build on site or a payment in lieu, but it's more punitive because the developer isn't gaining that much value through not having to build a half a unit or not putting that unit in their project.

Conversely, the value gap doesn't generate as much, but it's more fair and it creates a higher

likelihood that an investor is going to maximize the potential of a piece of land for development.

And as you were just talking about earlier about how are we going to accommodate housing units, that's a consideration that the city needs to make, which is if it can hold 55 units, do we want 55 units because we want to maximize what we can get out of it?

Or are we uncomfortable with 50 units because the investor is not going to want to have to build a sixth

for the five market rate units that they're going to get.

Next slide.

I wanted to show you how we calculated the value gap.

So what you're looking at here is a table for rental housing between 30% of AMI and 80% of AMI, the gap of the value of those units between market rate.

So if it's a negative number, the ADU unit is worth less than the market rate.

And if it's a red black number, it's worth more.

And so you can see here,

based on the size of the unit and what the potential revenue is, the value gap between a market rate and that ADU unit can range from where you are in the city because of the revenue differentials, but also the type of unit.

And so you can see here and then the bottom line underneath each of those rows for areas EF, areas GH, and area I is the average.

And so

Our advice would be if you're going to go the value gap approach and you're doing 60% of AMI and I'm building a project in area G or Asian downtown, the value gap calculation would be $184,000 and 463.

And so if I want to buy out, that's what I would have to pay into it.

If I owed you half a unit, I would owe you half that amount of money or $92,231.50.

Next slide.

And then this is just a construction cost approach differential, which is looking at different types of construction, what the average construction cost is per square foot, and then what that value is.

And as you can see, these values are substantially higher than the value gap approach because you're dealing with the total cost of the unit as opposed to a difference in value.

These were just, these are what they are today based on

current construction cost numbers that we calculated through looking at existing projects and interviews.

Obviously, these will fluctuate and change as costs go up and down over time, but I just wanted to give you a sense of what we're looking at and how it varies because if I'm building nothing but three bedroom units, that construction cost number is way different than I'm building nothing but studios and ones.

Next slide, please.

Housing voucher considerations, blending the IZ or the ADU with voucher units.

There are communities that are trying to accomplish this.

You can try and create greater affordability within your projects by tying with vouchers.

So your vouchers actually fall kind of in between 50 and 60% of the area median income.

So you're not going to create a financial benefit to a developer, but what you can do is you can serve a household at 30% of AMI or less than that at the 60% of AMI level by using a voucher.

So you can have those units serve a lower income without adversely impacting the financial feasibility of the project.

And then financial incentives is maximizing your leverage with new zoning requirements.

We talked a lot about this.

I don't need to belabor the point, but there are things that you can do with either tying in other financial programs like low-income housing tax credits or playing with the set-asides and the target AMIs that you can look to do things.

So one of the things that we encourage our clients to consider is

If I could do 10% at 60% of AMI, I could probably do 17% or 18% at 80% of AMI because it has the same financial impact.

And so you can look at, well, do I want 18% of the units instead of 10% of units, even though I'm serving a different income level?

Or do I want to look at different areas of the city and say certain areas like downtown might be better for lower AMIs because

better transportation access, better support service access, more walkable to retail, so forth and so on, as opposed to maybe something further away where those resources aren't going to be as robust.

Next, please.

And then finally, the approval process, you know,

I don't know how to say this delicately, but the longer it takes for me to get my approval, the more it costs for me to do the development.

And so finding ways to reduce that process can lower the cost of construction and as a result, create greater opportunities for more affordability in the same project.

And so that's just something for consideration for you to think about as you go through and look at this more holistically rather than just a financial assessment.

And then finally is maintaining your IZ.

As you all are very well aware, the market is changing quite substantially, even every six months, let alone every 12 to 24 months.

And so our recommendation is you need to relook at your policy in a limited amount of time

to make sure that it's not out of sync with the market because you don't want it.

You're just as much shouldn't want it to to leave money on the table, if you will, where you could ask for more and it wouldn't adversely affect the project as you would it basically making development is feasible.

And so the only way you're going to be able to do that is looking at it.

You know, the current ADU is no more than every two years.

And I would say that's the max that I would do if it were me.

But those are just some of the considerations on top of just the financials that we wanted to put in front of you all for your for your consideration as you as you try and solidify this this policy.

Yep, I have a question.

So I know you didn't do this analysis and you would not have numbers, but you provided that analysis that except for student housing, the market wouldn't really respond much if at all to construction above six stories.

because of the construction materials.

Does that market response vary fundamentally if it's non-residential construction?

In other words, one of the things I'm trying to figure out is, let's say there's a mixed-use corridor where you have 10 stories by right.

I can't answer that because I didn't look at your commercial market to understand what going rates are for.

I will say at a $400 plus, $450 square foot construction cost for concrete and steel, rents would have to be north of $50 a square foot, probably higher than that.

And unless that's what going rents for office in Charlottesville are, I would say no.

Nope.

Okay.

I can promise you they're not bad.

I am sorry I put the room in such a dour mood.

Well, I'll just say I think this is one of the most important presentations we've received because I think it's giving us some specific numbers and just some of my initial thoughts are I think

Our community has been so consumed by the conceptual debate about whether supply has an impact on affordability, which, in my opinion, it's settled, it does.

But we've been so consumed by that, we haven't gotten as much as I think we need to into some of the nuances once we all accept we agree on that.

And to me, this points out that

particularly in RB and RC, but also RA, there are areas of the city where particularly renters will see the value of the property they live in increase, increase the likelihood of an investor flipping that home and increasing displacement of those residents.

And that, let's say you live in 10th and Page, you're renting at $1,200 a month, you make $40,000, $50,000 a year.

And yes, we do have a sizable number of non-subsidized renters at that level in areas of the city.

If they're displaced, they're not even with increased supply, that new supply is still going to kick them out of the market.

So they're going to still go into Greene County, Buckingham.

So that impact is something I think we need to be very aware of, as well as, which I think in part, the sensitive area community was meant to try to get around.

And the second is that our understanding of what those mixed use corridors

might have been will play out very different in practice than maybe what we might have thought.

And my biggest concern is those areas of the city where renters have a very real risk of getting displaced.

If an investor is willing to pay a million dollars for a property in RC or the equivalent and say like a CX zone, there are absolutely areas where that is going to equal displacement.

while still acknowledging that that is true while it's also simultaneously true that increased supply is needed.

Yeah.

So Michael, you know, I concur.

I mean, I think, you know, one of the reasons that, you know, I wanted to

I think one of the reasons that I want to do this project is because I want to try to protect the, you know, the sensitive neighborhoods and we have to come up with a different name is kind of in my brain now but and it seemed like this zoning the proposed draft zoning ordinance will have a

a negative impact on them.

It's like it's going to really expedite what's going on now because, you know, it's going to create the opportunity for more density and therefore the profits are going to become more expensive.

And I was thinking about many of the people that I know, I was thinking about the 10th and Page neighborhood where, you know, I could see it changing, someone coming in and either want, you know, if they move or should pass, that that could change.

And

And I know we can't, you know, we talked about this before, Jay, of like, you know, just kind of, we want to really delve down into those neighborhoods, but we, you know, after we adopt this, but we can't kind of put that on pause.

That's my understanding, you know, and so anyway, I'm just kind of talking out loud.

I know we're not going to come to solutions tonight.

That's just kind of, you know, after hearing all of this, this kind of puts numbers to,

what many residents feel, what we probably felt as well as putting a reality to it.

I learned a lot about construction costs, steel.

I never heard the term podium before construction.

I learned a lot tonight.

So anyway, thank you so much.

Can I ask a quick question, James?

So there was a presentation we saw at some point about the actual number of units that we thought would be built.

Is that in this package?

That was the HRNA study.

Yeah, that's a different one.

Yeah.

It just wasn't that many that were being shown to actually be built.

Right.

And there's numbers in this one, too.

We can translate the annual parcel into unit count based on the zoning classification it's in and to give you a general sense of what that could look like.

But in the stuff we got a couple months ago, it was pages 36, 37, 38.

Yeah, well, for example, for RA, it says 2.22% annually for Area A, and it says 72 parcels annually.

Now, the number that he was showing is off by, I think it may be

is essentially the same analysis.

Well, I can translate that because like an RA is going to be three units.

So 77 times three, that's going to be the number of units as you see the consumption.

And so we are going to provide you an updated version of that report with all these numbers once we finalize everything with James.

So that's a draft and you will get a finalized with all the clean numbers in it.

But even then, so the percentage is, you know, minimal.

It's very little difference.

It's not like it's a wholly different report.

And can I also say, I think, correct me if I say anything that you would perceive as wrong, but what this report is, what the HR&A report was, they're all kind of snapshots in time based on current market conditions.

So I think it's worth emphasizing.

You referenced today we have a broken housing market.

What is the result of that broken housing market?

Costs are very, very high.

The projections he's showing are based on revenue, which are based on those costs being very, very high.

Let's come back to the point why supply is so important to this.

I wouldn't take his numbers and project those forward indefinitely, because what we're trying to work towards is not a broken housing system.

As we move towards not a broken housing system, those revenues should stabilize and that changes the numbers.

So if we take this snapshot 20 years from now, it should be a very different snapshot.

Yeah.

So if you assume 2% consumption, well, as parcels are consumed, the number of parcels will go down.

Yeah, I think, and I know it's not

In the scope of work you had in the presentation, I think it would just be useful for us to move that from the conceptual level down to specific numbers to get a sense of, particularly of us in the context of a regional market, how much new supply would result in, say, inflation adjusted investor willingness to purchase it over a million dollars.

What is actually that new supply necessary to bring that down by 1% or whatever?

Because I think

I don't know if that makes sense, but I mean, being able to see like what is the number of new supply correlate to the percentage of the current market conditions actually changing, I think just helps frame our conversation because I think conceptually I agree, but it's just very helpful to see specific numbers, particularly in the context of us being, this is a regional housing market, not just 10 and a half square miles of Charlottesville.

I'm not sure I understand how to even think about that.

Right.

Yeah, I mean, and that, yeah, I mean, that's, again, I don't think that is the situation or likely at all.

But when we're thinking about displacement in specific areas, what would the actual

new supply need to be for the investment conditions to change such that displacement pressure would actually be reduced without additional protections with that increased displacement pressure coming from the fact that a zoning change could increase the value of that parcel by 50%.

An investor is willing to pay over a million dollars.

Thank you.

I have no more questions.

Anybody else have any more questions?

Well, thank you.

I say I'll take the slide deck and pour over it at 2 o'clock in the morning as I want to do.

to come up with.

I really do appreciate having the numbers and the insight.

Thank you.

My pleasure.

Thank you.

Is there more?

Yes.

Yeah.

Well, one of the questions that I had posed to you a month or two ago, and I think that everybody would like to have at least some idea of is what's in the pipeline?

What's in the pipeline for projects that are, you know, obviously not everything that's in the pipeline is going to get built, but what are we looking at either in terms of affordable projects

or in terms of market rate projects.

That's at least one bit of data that I don't have that I'd like to have.

Yeah.

And it may be that in terms of broad background kind of thing,

How do other counselors feel?

Yeah, I'm sorry, Michael.

I think that I can't think of anything else.

I think that we have a lot of information like

the last two presentations in particular about how it's going to impact the sensitive neighborhoods.

I really want to talk through that because if we adopt as is, and I know it's still a lot of work to be doing, we're saying, okay, we realize that we're going to do this and it's going to increase the likelihood that someone may, that those neighborhoods will expedite the changes in that.

And I know that

Zoning changes specifically to address the notion of anti-displacement.

So maybe theoretically they could vote next Wednesday and you guys would then have a recommendation that would include those and we could bring those to this table for a specific conversation.

with council.

I think that that is something that we, because I think that when we set out the meeting dates, we said that next week we wouldn't meet.

We talked about having a work schedule on the 25th, Wednesday the 25th.

It's already on the calendar.

It's already there.

Let's hold it there and let's figure that

after next Wednesday, we'll have to kind of figure out amongst ourselves what the topics ought to be.

After the 18th, when the Planning Commission meets again.

Yes.

And they will be talking about anti-displacement issues.

Yes.

And it's possible, in theory, they could vote on something to send to us.

And so will that be the new, will that be the draft, will that be the latest iteration of the draft?

We're not going to

We're not going to publish a whole new draft, so what you will receive as the recommendation from the Planning Commission is the existing draft plus a document detailing all of the tweaks and changes.

So I don't have to go back and repeat anything about just Christmas vacation.

We might need to discuss that.

Actually, that may need to be a large part of the discussion on the 25th.

Okay.

In order to hit the, basically, we need a minimum of four weeks before the public hearing.

Mr. Freese, want that?

almost of necessity need to be in order to adhere to at least the potential adoption prior to the end of the council.

And I would just concur with the vice mayor.

I think the points he raised, I think, are the biggest ones I feel like I think we need to discuss more around displacement and then as well as once the planning commission

gets the finalized versions of the things they've been mulling over for changes and a few of the mixed use corridors and the specific anti displacement stuff they've talked about.

I think we'll need to then talk about those things in depth.

And then finally, as just an extension of the work we saw tonight,

Yeah, particularly, remember, it's just like when you guys are advertising the tax rate, what people pay in taxes is a product of rate and value, right?

There's two factors that come into play in answering your question, Councillor Payne, supply and demand.

Yeah, and I know it would be additional to his scope of work.

I don't know if the economist we had tonight, if that's something he's capable of doing or connects to the work he had already done.

And I understand if it's not possible.

I think it would just help make this conversation more specific and constructive for us as council.

Something to that effect, because I think it will just allow us to

have a more informed conversation about the displacement things we talked about tonight.

In the context of the point James raged, which is true, is that these are current market conditions.

Supply will change that.

If we have a specific number around that, we know how much does supply actually need to change in order for the displacement pressure to lower, or do we make changes?

I hear you.

In a sense, I think it's going to be really super complicated.

It also will really vary throughout the city, I guess, in those four zones.

That's what

I'm most concerned about having something specific for us to discuss as it interacts with areas at the highest risk of displacement.

And I would think it would be most valuable to have it similar around the rate of change, like at different areas in the city.

But again, I understand if that is not possible to produce and I understand that would very likely be in addition to the scope of work that of the analysis he gave us tonight.

But

One of the other issues, I suppose, is whether whatever change that we make, how will we know a year or two years or three years down the road whether we're making progress?

And

And I would suggest that's a very short time to assess progress under a given.

I mean, where we are today is the project of decades.

Okay.

Are we good for now?

I think so.

Yeah.

So our next meeting is Monday night.

It's not with you.

unless you want to be there.

Can I ask a question, if I may?

You mentioned that going to 75,000 people by 2050, Ray, could be a potential goal or destination.

Wouldn't it be possible to analyze the future land use map to maybe its full extent?

If everything was maxed out, what capacity that would provide?

Somebody else calculated that to be $165,000.

Okay.

Thank you.

Okay.

We're adjourned until Monday.

Whether that's a correct calculation, I don't know.

As long as it's bigger than $75,000.

Yes.

Way bigger.