Planning Commission Regular Meeting   1/13/2026

Welcome everyone to tonight's financial meeting.

Thank you.

Well, given the holiday break, I don't really have any details or sort of progress from what was previously reported, but I was going to touch on the two sort of large housing projects that UVA has undertaken, both Darden and the Emmett Ivy Corridor, where, you know, if you pass by on 250 for the Darden one, or if you go by on Ivy Road, you can start to see

sort of the extents of both those projects, more so at Darden where you start to see the massing kind of coming to completion.

But then along Ivy, they've come out of the ground so they're no longer a subgrade.

And so if you want to get a sense of where sort of the limits are relative to the public realm, it's becoming clearer each passing week.

And as they transition up and rise up, you'll see a lot of progress this spring.

I was just at a tree commission meeting a week ago and they are preparing their state of the forest report to go before council I think in April so there's a lot of work to put into that in terms of recommendations and the one that would be most relevant to planning commission is this

There's work on creating a sort of pamphlet packet for developers on best ways to keep or preserve existing trees rather than planting new trees because they offer so much if we can keep them.

So they've been working on suggestions and kind of images to do that better.

I don't think I have Parks and Rec or have I canceled?

I don't know, but I'm going Thursday,

The Virginia General Stakeholder Work Group, working on the building code, met on January 5th and 6th.

I was not able to attend, unfortunately, but I understand a submission was made based on my previous

submission allowing, mine was allowing four story single stair residential, this was allowing five and six story single stair residential with the same additional safety restrictions.

Interesting.

OK. From the Board of Architecture Review, the only large item was the apartment building at 7th and Delavan in the Fifeville neighborhood.

And the BAR, I believe, denied that project.

And I believe an appeal has been filed to council.

So we will see that project again.

Council will be looking at that project in the coming months.

Neighborhood Development Services.

Mr.

Oh, sorry.

OK.

I move to accept the minutes as written.

Oh, yeah, we'll get rid of that now.

Any seconds?

Second.

All in favor?

Aye.

Aye.

That passes.

All right.

Commissioner Solliades?

What are you doing?

Commissioner Carr?

Do you want to do the NDS report?

Is there anything to report for?

It's all right.

You were still getting ready.

I'm sorry.

We're jumping around a little bit.

So nothing from NDS?

Oh, NDS report?

I don't have the report now.

All right.

Well, how about the tax abatement study?

Good evening.

I'm Kelly Brown, Director of Neighborhood Development Services, and I'm just going to do a brief introduction on our tax abatement study.

So I'd like to introduce you to Mike and Jeremy, who are here to present the tax abatement item.

At a city council meeting on April 21st, 2025, council charged staff with conducting research and analysis to determine if an affordable housing tax abatement program could have a material impact to incentivize housing construction in Charlottesville.

Within the

in the context of the high cost associated with housing construction.

If such a program could have an impact, Council also asked staff to define an optimal tax abatement program structure that could improve housing construction financing and minimize administrative complexity.

In June 2025, staff contracted with 3TP Ventures to lead and conduct this study, market analysis, and model building.

to test the potential impact of an affordable housing tax abatement on the feasibility of housing construction projects.

The goal of this project, therefore, is to enable an informed recommendation to council regarding a tax abatement program in Charlottesville.

So 3TP has reached a point where they have prepared a final report and completed a feasibility model that they will present and demonstrate for Planning Commission this evening.

This is not an action item, but rather an opportunity for commissioners to learn more about this research, ask questions, provide feedback and insight, and learn how this feasibility model can help with the policy and programmatic considerations related to an affordable housing tax abatement.

All right, well just brief introductions.

I'm Jeremy Goldstein and I was primarily responsible for a lot of the quantitative analysis and work on that front.

Hi everybody, Mike Callahan, Charlottesville resident actually.

So I'll be the one leading you through the presentation this evening.

We can go ahead and get started.

You should see here an outline of the kinds of things we want to talk about, mostly get you up to speed on what the reason for the study was, what our methods were, make sure we're all on the same page about what tax statements are, show you a little bit about this tool that we built.

and the findings therein in some of the key takeaways.

So there's quite a lot that we want to talk about if you can go ahead and go to the next slide.

But perhaps the biggest takeaways are here in this next little bit, these sort of three main points.

We'll talk about the numbers themselves later, but for the time being, let's talk about the bullets, which is number one.

Right now, looking at typical housing projects across the city, whether it be different housing types or in different sub-markets, we're not seeing a lot of projects that can really pencil out, as they say right now.

There's effectively limited development and feasibility.

You can go to the next slide, please.

And the thing is, if we remove the inclusionary zoning from that math about the current realities of the market,

While that does make some small improvements in feasibility, it still does not create a condition where housing is easy to be built right now.

So effectively, this is like the difficulties of the market.

If you're hearing from local development community that it's difficult to make projects work right now, this data concurs with that.

It also occurs with the fact that inclusionary zoning has a role to play, but is not the solitary reason why things aren't penciling today.

Lastly, tax abatements can help in this process, but I think we should be looking at some sort of alternative mechanisms or other ways to make sure that we're really aligning some of the public sector concerns with, say, we don't want to overpay or oversubsidize

and the need to create more housing with this very real market dynamic of things not being able to pencil right now.

So we may want to be thinking a little bit more flexibly about that.

And while this study wasn't meant to provide a definitive solution to this problem, it is meant to help inform those kinds of decision-making processes as we move forward.

All right, so now let's go ahead and get into the weeds.

So we'll start with the study purpose.

The overall purpose is summarized here in these bullets.

We want to evaluate the market as a standstill.

We want to evaluate the impacts of inclusionary zoning from a financial perspective.

This is very much a financial.

We're not going to talk a lot about administration or some of the other very real burdens to making projects actually happen right now.

We're still mostly talking about the math, but we'll venture a little bit into some of these other issues.

We want to talk about the financial or fiscal benefits of tax abatements in a couple of different realms.

And then the other task was to provide a mechanism for the continued monitoring, updating, evaluation of impacts and findings.

So we don't want to leave you with a static picture of the market today.

when the market can change tomorrow.

I want to give you something that allows you to continue to monitor over time.

Next slide, please.

So there's a couple of things that this project does and some things that it doesn't.

And especially sort of the tool, which in some ways is really like the leave behind portion of this project, what that tool is and what it is.

More than anything else, it is a means to inform policy decisions.

and you can see those lines are sort of in bold and you almost want to say inform I wish is like double bold.

It is not giving you the policy decision, it is helping to inform.

The more that private sector math is understood by those making public sector decisions, I think the better off we're all going to be and that's really what this thing is about.

We wanted to provide you with a method that is transparent, flexible, and adaptable.

In other words, it's something that you can come back to again.

You can feel very clear about where the data comes from, and you can be making changes to it over time as better information comes along.

We don't want to act like we have all the answers.

We want to give you the means to make those adjustments as we move forward.

And lastly, this was really meant to be a collaborative effort, which meant it wasn't just us doing this in some back room.

It was done with a lot of conversation with city staff.

It was done with a lot of conversation with the local development community.

It was done with conversations with developers who aren't local, who can also provide outside context.

We wanted to make sure that this was as inclusive as we could be in making sure that we were doing our best

understand and inform a pretty complicated housing market.

This tool, though, is definitely not a handful of things.

One, again, it's not meant to be the thing that determines the policies.

There's a lot more to this than just the math.

It's certainly not a way to provide staff, which will now have control over this tool moving forward, to sort of supersede what a private developer is saying about when they're looking at their math.

This has really meant not so much to inform a specific project,

but typical projects, the standard one.

Every project is unique and that's just something that has to be understood.

And last, it's not a black box tool.

It really is like all the assumptions and things built in can be adjusted and should be as we move forward.

Okay, next slide please.

A little quick background and need just so you know, this is one step in an ongoing thing that started several years ago with the identification of the need for more than 4,000 affordable housing units in the next 20 years and then a zoning code that was adopted that was meant in some ways to address this that's also included in inclusionary housing alongside a real financial attempt to provide some financial backing to that.

and then sort of almost immediately noticing that market rate projects with affordable units haven't really come to fruition.

So the city wanted to know, well, can we learn more about that?

And what can we do as it relates to tax abatements, which is something that has been brought up on several occasions?

How valuable an option is that to improve the outcomes of housing construction?

So then our goal then ultimately is, let's build these tools, build this model that can help inform this sort of multivariate set of interests.

Next slide.

Just making sure we're sort of on the same page about when we talk about tax abatements.

We'll get a little bit more in the weeds on this, but overall, really what we're talking about is some kind of reduction in taxes as a result of meeting the needs of that abatement policy, whatever the policy would be, the intent to improve the financial feasibility of projects that have affordable dwelling units in them.

You can see it's, you know, it was authorized under this particular act, and it's really, what really happens is that it's a grant in which you refund after the fact, so someone pays their taxes, then you reimburse them after the fact, some of that sort of stuff, just to know.

So we do have to sort of operate within the bounds of the state law.

Next slide.

Oh, and you can always skip those.

Those are just the headers.

So an overview of the method.

So effectively, a three-step process.

One, again, collaboratively, determine typical costs and revenues.

And we'll talk a good bit about that and can get into as much detail as anybody wants.

to build a development feasibility tool that mirrors the private sector analysis process.

Fancy way of just saying let's build a pro forma tool.

But let's add into that tool the means to analyze impacts of public interventions.

You can sort of see this is a screenshot of a portion of the user interface tab of this tool where you can see that there's a section for project inputs and then a section for policy testing so that you can say under this sort of situation

How do things pencil?

What's the yield?

What's the IRR?

What if we add this policy?

How does that change the yield?

That's effectively what this thing is doing.

So it's calculating current feasibility of the typical project.

And then how does that change under a range of interventions?

Our primary issue was tax abatement.

But as you'll see, we tried to go a little bit further with this work because it was a good opportunity to do so.

Next slide.

So why a tool?

Hopefully this is sort of fairly clear to all of you already, but part of it is just that you need to have something like a tool that can change with changing market conditions.

This is not the first time someone has tried to evaluate the fiscal feasibility of the housing market.

But I think if you've been here for some of these previous plans that effectively come as PDFs, it doesn't always take very long for the data and underpinnings to effectively have changed.

And then it makes a lot of the findings therein, however solid the methodology was, not as relevant anymore.

We just wanted to avoid that.

We want to give you an opportunity to change with changing times and then also allow you this opportunity to start playing with a wide range of interventions and sort of seed other things moving forward.

Next slide, please.

So the inputs into any pro forma tool, they can become incredibly complex, especially for a specific project where there's real money on the line and you need to go out and get financing from other people, which is very often the case when you're doing more than, you know, enough units to trigger the affordable dwelling unit requirement.

But on the whole, the basics are that you just need costs and revenues.

Effectively is what goes into that.

There's just a wide range of costs.

There's different ways you can calculate revenues.

And there's another handful of financial assumptions that go into all of this stuff.

The thing is these things can be really unique to any individual project.

And they change with regularity.

The cost of wood changes quickly.

The cost of steel changes quickly.

Sometimes consultant fees change quickly.

Time changes quickly.

Nothing that we're presenting today, especially as we start to show you, here's our estimate for the per unit cost of the wood stick built low rise pit.

I don't want anybody to get too terribly focused on that, because ultimately what we're really trying to do is, one, at least get in the right range of overall financial viability, and we've had that vetted with people in and outside of this room.

So we feel pretty comfortable, at least with the order of magnitude, about this.

What we really want to care about is, this gives us an opportunity to make some apples to apples comparisons.

If this was the financial feasibility of this project, well here's how it would change if we added this other stuff.

And it's really the change I think that matters most.

But saying all that, we do want to show you some of the inputs and let you know what's in here.

Go ahead and change the slide.

One of the biggest ones, of course, is hard costs.

It really just comes down to labor and materials.

The way that we wanted to do that was to try and mirror real projects that already exist in the city.

So we're not making up too much of silly projects.

But we were asked to evaluate a range of housing options from single family to high rise

But I do want to note specifically not student housing.

So that's not in here.

And if there are questions about student housing, that would have to be kind of like an ancillary thing.

But the model is in place to begin to, you know, we've gone a good way on that.

It's just not part of this study.

But I do want to make clear that

So we started with an outside cost estimating software asking it to price out projects like the ones that already exist in the city of projects with these sorts of styles that you can see somebody put together.

and then that was vetted with local and outside developers based on their project experiences.

And then we made changes as a result.

We took real world examples into consideration and they were effectively always included into our numbers.

They didn't necessarily replace things but they were always included as part of that finding.

So the next slide just shows

you know something like you know here effectively the the hard costs per unit for these different these different types of units again it's these can change over time they're you know that one person's number will not be the same as another person's and we're fine with that and there's nothing about this model now that doesn't allow somebody to say oh you know what townhouse these days is that's now it's 450 oh no they're it's 325 because they've gotten smaller up fine you can plug it in

But that's sort of the base of those numbers.

You can go on to the next slide.

Land costs is another one of the important components.

Now, I should note here that getting accurate land, like price for land right now has been very difficult for several reasons, primarily which there just haven't been a ton of land sales.

So what we really started with instead was assessed land values.

We did go back and look at the small handful of sales, land sales that have been in the city, especially over the last few years.

For what it's worth, there did seem to be some pretty solid alignment between sort of 2023, 2024 land sales, of which there were at least a few more, and the assessed land value.

So it's not a bad place to start from, but it's also that these can change pretty wildly over time.

But what we really wanted to do with these was to effectively create tiers of submarkets.

The prices in one part of town are not the same as the prices in another part of town.

Even if the construction materials cost the same, the land isn't the same.

And so we wanted to use this sort of tiering system.

But it really just means from tier one to tier five, as you'll see in these charts moving forward, it really relates just to from sort of the most expensive assessed areas to the least.

This map is showing is a map of the assessed land value per acre.

And it won't surprise you to see some of the darker colors indicate higher prices or higher assessed land values.

But we did not want to go ahead and say that there is, let's say, a downtown submarket.

For now, that's high priced, but it doesn't necessarily have to be in the future, nor is it the case that there might be projects outside of downtown that would get downtown type prices even if they don't show up on this map as such.

So instead of these tiers being sub-markets in the way maybe you're used to them being like Fifeville, we'll call it a neighborhood, that's not what this is.

It is effectively a place that has

the you know the land costs and then commensurate rents associated with the types of places that currently fall under this sort of tier one the highest the highest or the tier five the lowest or any in between.

I know it can be a little confusing.

I apologize if I didn't explain it well.

But hopefully, you get a sense of what we're trying to do here.

You can go to the next slide, and you can see now when we vetted this with a local community, there was no real consensus.

While we were able to reach a reasonable consensus on construction costs, there just wasn't a real consensus on land costs.

I expect these numbers are very likely to change over time.

And it's even the case that for some,

For some folks who run performance, this is an input to see how it changes yields for others.

It's, in fact, like the land cost itself actually relates to meeting a bottom line first, and then whatever money is left over becomes the land cost.

So there's not even a consensus on how to price all these things.

So just be aware.

I wouldn't fight anybody about changing a single one of these numbers.

I'd be fine with it.

You can go to the next slide.

In some ways, that's true with soft costs too, which mostly just have to do with fees, whether they go to the city for reviewing things or to the consultants for drafting plans or doing legal, and that kind of stuff.

The one thing I want to note about this, you can actually already sort of move forward from this slide, the only thing I want to note here is that

The model ties soft costs to time.

So if you were to discover over time that it is taking longer to get stuff done, that's a material soft cost.

That's real.

We want the model to account for that.

Conversely, if there's situations in which things can go faster, that could theoretically have a benefit to cost, though we set at least a minimum for us.

There's no maximum.

We could just keep going up and up and up and up.

But we did set a minimum.

At some point, there's only so many savings from that.

We didn't want to overemphasize, say, oh, you've got this great new exabyte of your review.

It's saving you millions.

No, it's not.

You still have to drop the plans.

So lastly then, there's revenues and some other sort of financials.

But most of what we did was we pulled asking rent.

We pulled rents for apartments.com on projects that we felt were representative of tiers one through five for each of these kinds of building costs to the extent that we could find them.

We didn't necessarily find a robust number of comps all across our five tiers and six building types, but enough to at least give us some reasonable numbers to start from.

So that's our market rate rents, and then

Affordable rents are just based on area-wide median income, a proportion of that number.

So that changes every year, but that's a static number.

There's some other stuff in this model, all of which can have substantive changes on outcomes, and they were all vetted with at least some portion of the group.

Everything was looked at by at least somebody else besides us.

But again, all can be modified as we need to.

All right, I think that's the last of the like, yeah, of just the background.

Now let's go ahead and get into the tool itself.

So this tool provides two critical standards for pro forma outputs, yield on cost and IRR.

Are folks familiar with both of those, or did any definitions need it?

Happy to do it.

Yeah.

OK, so for yield on cost, that is really focused on how much you're effectively getting as a return once a project is stabilized.

So it cares about your net operating income relative to the project costs.

That's its role.

So it's, in some ways, a very simple

So once you've got a stabilized project, it's interesting to know how much money you're generating every month.

But the other side cares about time, too.

And when did you have to buy the land?

How long did it take to get things running?

When did you start getting rents?

And the way that you would look at that is with internal rate of return, which is almost like inscrutable calculation that you just put into Excel and it gives you a number, like the actual math is.

It's like a goal-seeking thing that it's trying to do to get to a net present value of zero.

So mostly you just let the machine tell you what IRR is.

But they both have generally standard thresholds for what counts as feasible or not feasible.

And that's what we really care about, are those thresholds.

And so we built that into this model along with a couple of other types of measurables that I think might yield a little bit more information for public sector folks besides just the private sector finances.

And we'll show you that in a little bit.

But again, what we really care about is the difference in these performance metrics with and without policy interventions.

So that's really what matters.

So it doesn't matter so much that this one's a 5.2.

What matters is that with this addition, it becomes a 5.7.

And that gap of half a percent is the thing that is effectively the thing that matters.

All right, next slide, please.

This is just a little screenshot of the tool interface.

We'll, I think, have an opportunity to play with it if people are interested.

But mostly what this thing is doing is it's giving users an opportunity to make selections about the development type of the submarket.

how many affordable units you're supposed to have at various AMI bands if you want.

What kind of policies do you want to test?

And then on the right, that's all sort of on the left and in this sort of dark yellow.

And then on the right are the overall findings of yields and IRR with and without the policy changes, what the difference is, and then some additional other summaries of the costs and benefits of these incentives.

So just on this one, just a quick orientation.

So it looks like the deep mustard color, that's sort of guiding the user.

These are must-fill-out sort of cells.

And I guess where we're seeing the green and the red is pretty obvious, intuitive, that this is where you trigger and don't look possible.

And then this is where you're probably not likely.

That's right.

The red's not likely.

OK, thank you.

Next slide?

So it looked like maybe, OK.

So let's go ahead and now get into some of the findings from feasibility with these key questions in mind.

What is the feasibility of a typical project?

What has the inclusionary zoning policy done to affect feasibility?

How would incentives, tax abatements or others, impact feasibility?

And lastly, how are city revenues affected by the use of these incentives?

And let's show you what we found.

So step number one.

We just looked at current condition market feasibility, which, as noted, includes the inclusionary zoning.

So these, again, are the typical findings.

As mentioned before, it's like, you know, red seems bad.

Green would be good.

This is missing.

I'm sorry to say this is what happens when I submit something a week ahead of time.

Only in the 11th hour do I realize I missed to adding a key where green means, effectively,

You've reached kind of the standard threshold for something to be likely developable.

Yellow, which we kept as actually kind of a wide band, is to say, look, there's a chance that under the right sort of conditions, projects of this type have a chance of getting built.

And then red was like, well, boy, these look pretty tough.

And effectively what we're seeing is that, as of now, new construction, financial feasibility looks pretty limited.

and that the only thing that maybe seems to be penciling out or has the chance of penciling under just the right conditions, especially under the right revenue conditions, would be a high-rise building that has really good rents.

And you perhaps can fill in the gaps about what kinds of projects might meet that criteria today.

But lots of rents.

And this is just, this has nothing to do, a lot of this is out of Charlottesville's hands.

But what if we removed inclusionary zoning?

What if that had never existed?

How would that change financial viability?

How big a deal is inclusionary zoning on its own?

And that's the next slide.

Well, effectively what we found is, I mean, it's not a sea change.

It's not like everything turned green.

But you see a little bit more, a little bit of improvement

maybe even in some other kinds of products.

But in general, yields tend to increase by about 50 basis points.

IRR increasing maybe 2%.

Still pretty difficult, though, for stuff to pencil out.

And it does suggest a need for, right now, if you want things to get built, that there's space to provide incentives or interventions to make projects pencil out.

All right, next slide.

So now we get to tax abatement.

We want to talk about two different kinds of approaches today.

One is generally what people talk about for tax abatement.

The standard is a value-based abatement.

Yeah, so part of the feedback, the feedback loop in all of this work when we presented this to Cadre, to the HAC, solicited feedback from folks across city staff.

That was one of the things that came to us was, hey, take a look at something that Baltimore is doing, and I'll show you.

A little bit about that, but just so you know, so that the value-based abatement is effectively, the abatement is on the improvement value associated with that project, i.e.

the building.

So it doesn't care about, you know, land price, the land cost stays the same and the tax-related land stays the same, but what gets abated is the building itself, the tax on the building itself.

A rent gap abatement, very different.

It is really focused on the difference between market rate rents, what that unit would have rented for if it was offered to the market, and the rent that is mandated as affordable.

So it is an abatement of the gap between those two numbers.

All right, so those are the two things we want to show you.

I think the next slide is going to be a summary, yes, it's a summary table of running the model on an example, a mid-rise project in a tier three area, so kind of the average prices, average rents, average land costs, that was subject to inclusionary zoning and then gets an abatement.

The rows are different levels of abatement.

and as you can see, if you look in the first sort of two columns, or columns two and three I should say, that you can see that as you add abatement, increasing the abatement amount, you improve the yields and you improve IRR.

But I also want to note the next two columns, which is maybe another way to evaluate the efficacy of this sort of work.

If you've mandated that a unit has to be offered to someone at an affordable rate, there is an effective loss in income or revenue associated with that requirement.

And under this particular project, that amounts to $13,000 a month.

The abatement return associated with each of these abatement percentages, you can see doesn't get anywhere close to $13,000.

100% abatement on all the improvement value, great.

There's still an effective gap between the financial mandate of inclusionary zoning and this style of tax abatement.

So that's another way to sort of evaluate how good is this program.

Another way to look at this is, well, if we didn't have this abatement and somebody built this project, how much money are we effectively giving away?

Because this is one of the things I think folks are concerned about.

Are we just giving away money?

Well, how much is that?

In this case, this would amount to as much as $50,000 plus in tax revenue waived because of this tax abatement.

Now on the flip side of that, there are lots of times where in some ways what you're trying to do is provide an incentive that creates a unit that otherwise wouldn't have existed, a project that otherwise wouldn't have existed.

So the other way to look at this is to say, well, how much new tax revenue do you actually still get as a result of this project existing with the presumption that nothing would be there otherwise?

And then you can see, well, you can get maybe as much as $530,000.

Maybe it drops down to $490,000.

But it's still $490,000 of tax revenue that wouldn't have otherwise been there.

Now, of course, there are costs associated with the people who live in this unit, et cetera, et cetera.

But I mean, it's important, I think, to think about this from multiple scales.

What are just the basic financials from the private sector side, which is something you should know about but doesn't necessarily need to be the only reason that you make a decision?

How much are you really giving them?

relative to what's being lost and how much are you giving away relative to what you might be getting back in return.

So multiple ways of thinking about this.

And this is the way in which we hope that this sort of information sort of informs a decision.

But let's go ahead and go to the next slide and show the version with that rent gap, where the abatement is tied to the gap.

So let's say we've said an average rent is $2,500 a month.

And we're saying that the affordable rent here is about $1,500 or so a month.

I don't remember.

I'm sorry off the top of my head.

and all of these things are built with like, you know, there's a mix of studio to three bedroom units, etc.

So this is just an average point anyway.

But now we're abating that difference.

So just by means of example, we're saying there's a thousand dollar a month difference and we're going to abate somewhere up to that, just in these cases, up to that thousand dollars.

And you can see the yield changes and IRR changes.

Actually, do you mind going sort of back and forth between the previous one and this one?

So you can see if you just sort of go back and forth and you're just looking at yield changes and IRR changes, you keep going back and forth, back and forth.

that the version in Rent Gap is actually much higher.

So this has a much stronger financial impact.

OK, now we can just stay with Rent Gap.

The other thing that this does is, at least if you did 100% abatement, the whole point of it is you're giving back the monthly loss.

So it's $13,000 loss, it's a $13,000 abatement.

That's the purpose.

It doesn't have to be that number, but you can reach that more easily under this sort of mechanism.

Now, that, of course.

means a much higher amount of revenue waived and effectively lower new tax revenue.

Sorry, can I ask a quick question on that last chart?

I just want to make sure I understand everything correctly.

I should have said annual tax revenue wave.

Absolutely.

Sorry, I didn't do that.

I have a question about both of these.

In terms of the cost of the city, of the abatements of either form, is this looking at

The first year the project is built, I think we're doing a 99-year IZ requirement, is that right?

So is this sort of averaged over 99 years, the first few years?

What time frame are we talking about?

Well, no, you could have an inclusionary zoning requirement for 99 years and have a tax abatement for six months.

That'd be up to you.

This is part of the policy.

This is basically what would happen for the course of the year.

Okay, so those costs would presumably, the gap narrows every year, you might assume, so

The numbers might depend heavily on the duration of the abatement.

It would depend on the duration of the abatement.

It would depend on which of these methods you use.

Is the duration of the abatement a parameter in the tool?

Yes.

Yeah, it's not really, ultimately at this stage, it's the last thing to tweak.

It's not doing a lot of kind of like net present value changes right now.

And the tool itself, the way in which that would sort of manifest itself is in like downstream effects in the model, maybe too much detail.

But it's really like, it's only looking at 30 years.

And if you wanted to build it to look at 100 years, then you would see more of us.

So there's a cap on it as it stands for right now.

But all those things can be changed over time.

At some stage, we were really just looking at a macro scale, how valuable is this sort of thing, more than really trying to get down to, say, how long should we be doing this for as of now.

All right, so I think we can move on to the next sets of slides.

So this is just a little bit of some pros and cons on these two.

The number one pro for the value-based abatement, that's the standards.

The industry standard is the one that's tried and true.

That's what you see all over the place.

But there are a couple of cons associated with it.

It doesn't fully close the market gap.

And I think this is not a technical finding.

one could just sort of think through this a little bit logically that the best opportunity is to use an abatement.

That kind of abatement doesn't look like it's very often going to make a project pencil when it otherwise wouldn't.

And as such, it may be the kind of thing that's particularly useful in really good market conditions.

But it doesn't make a huge difference in bad market conditions.

It doesn't.

It doesn't mean it's still not beneficial.

And I'm sure there are projects that would pencil that otherwise wouldn't.

So this is just sort of probabilistically.

It may not address some of these like getting us to the finish line in tough times.

Rent gap abatement, the pros really are that because it's tied to market conditions, it really is addressing the financial loss that is associated with inclusionary zoning.

A person could reasonably say this is an unfunded mandate and doing something that's focused on addressing that unfunded mandate.

This is probably the best way to do that.

And because it's more robust, it might be more beneficial in a wider range of economic times.

So that's good.

The number one con, it's rarely used.

We found this Baltimore example.

Our project wasn't to do a deep dive into the Baltimore version.

So this is mostly just trying to get information from them.

And they're like, well, we just sort of started it.

And we don't have a lot of results yet, because they're dealing with the same macro level housing conditions that Charlottesville is.

So there's probably some number of administrative hurdles that would exist.

I wouldn't say like, gung ho, let's do this.

But it is sort of intriguing.

But there are things that still have to be figured out.

And it still has the same, like if it's a very strong market, how would you know if it's needed?

All right, so we can go on to the sort of wrap up thing.

Oh, sorry.

Well, I mean, technically not in our scope, so we didn't go very far down this path.

It was easy enough to sort of program into the tool a couple of other standard kinds of incentives for housing feasibility.

So we built those into the model.

That includes gap financing and land provision.

That's really a reduced development review timeline, so a reduced timeline to get things to market, and forgivable loans.

They're sitting there ready to be used.

We've got a couple of examples.

You can see, oh, they also have demonstrable improvements on IRR.

And so it's not surprising that you'll hear that there are other places that use multiple incentives at once to make something happen.

And this is part of why there's no

No single one that's the silver bullet.

But some of these can be layered on top of each other.

And the model allows for that.

You could turn on two policies at the same time and see what happens.

So that's there, too.

It hasn't been done in as a robust a manner as some of the other parts.

OK, with that, I think I'm on to the final of the key findings slide.

Thank you, by the way, for giving me so much time to talk about this.

I hope it's been helpful.

But here are the key findings.

Market conditions are challenging right now.

It's just the case.

And inclusionary zoning adds a financial burden to that challenge.

It just does.

Traditional tax abatements can help.

There's no question.

It's a net positive.

But they would look today to be insufficient on their own.

I don't think you could make a reasonable recommendation that this is a thing that needs to happen today to solve your problem.

But you could recommend it today because it can be part of solving problems.

Next note is that it may be worth learning a little bit more about this rent gap tax abatement model, sort of vetting it with those who would have to do it.

What are the things that we need to be thinking about as far as are we missing anything about how this would really work?

Are there other kinds of administrative challenges that we would need to face?

Because it does look like it might be a better balance between some of these public and private priorities.

helped make market dynamics sort of the crux of what it is that we're trying to all work towards.

And I think that makes a lot of sense.

Saying all that, there may be other incentives and policies that would be needed to make this work.

And lastly, for the purposes of future exploration, future adaptation, this lead behind tool I hope is a mechanism to keep this part of the conversation beyond just the submission of our report later this year.

I think that's it.

Thank you for the time.

I think the final slide just has our contact information for me and Mike.

It's just our first names at 3TP Ventures.

Was there going to be a live demo of the tool?

You want a live demo?

I was curious.

Sure.

One of the questions I had, and I didn't have a chance to spend time with the tool, but do you take into account completion time?

Is escalation built into the tool?

It is.

OK.

That's right.

I have a few.

I've been making a pile.

Thank you.

This is exciting.

Accessibility issue, red-green blindness.

Oh, thanks.

Please.

Can do.

Developers often will, when they're crying to me, will talk about the hurdle rate for a loan, that a hurdle rate, that you can't just pencil.

You have to make enough profit that the bank gets big feelings and makes them happy.

Well, I would hope that the, well, honestly, I don't know if we really did.

All we really set was that if you reached a particular yield, that might mean that it is likely to be feasible.

That's really the full extent, but it may well be that this hurdle rate needs to be something that would be ultimately included in any other version of this.

But at some point, again, this is,

Our interests, I think, on the public sector side are a little bit more, what are the tools we have available to us to affect positive change?

And that ain't one of them.

You know, talking to the bank isn't one of them.

And so it's a little bit more like, well, here are the impacts of the tools that we have.

And is this worth the squeeze?

In order to get an effective

desire yield.

Did you base that all on current interest rates?

No, no, no.

And that's an easy thing to change.

For right now, it really is just like the sort of red, yellow, green, like, oh, it's a seven.

And right now, that sounds like that's probably like projects like that would be likely to pencil.

But again, it's not your particular project, right?

for debt, but there's certain spreads that developers and lenders look at in order to start a project.

So that has to be moving with interest rates.

I think you and I talked about three years ago, something in a five or three quarters might have been sold out, and now it has to be penciled out at like a seven or six and three quarters.

So which is why time makes a huge difference.

I would love to have a local person with in-depth knowledge provide some information about that to me at some point.

For about, oh God, five years.

For about five years, the city of Charlottesville has been trying to get permission from Richmond to do a split rate tax, to tax land at a lower amount than buildings.

Oh, sorry.

Can I get that?

Land at a higher amount than buildings.

There it is.

With the hope that this could reduce the land acquisition costs, reduce holding costs, and improve the profitability of for-profit and nonprofit development.

No, because right now it's modeling your existing condition.

But if you wanted to change it, then it would just be a field that would get changed.

Those are all my questions.

I want to say, first of all, I really appreciate this tool.

I think it's not necessarily the point of the study, but having this accessible can really help some people that may not understand how these work and be able to build themselves a model this way can really get in here.

I haven't yet played around with myself, but just looking at sort of the input screen here, it appears to be relatively straightforward.

So I just want to appreciate that.

My comment more is about

You talked about this a few times, that really it's about the delta between with and without.

That's really what matters.

In some of your matrices, I'm curious to know what project return on cost or IRR did you pick?

for those tables that sort of showed the results.

Like I have that you were showing a half a percent yield on cost improvement and 2% IRR improvement.

And I think knowing that based yield or the base IRR is important because a change at a 5% IRR is going to be smaller than the exact same monetary change at a 10% IRR.

Oh, well, so there is.

We ran that same sort of table on lots of different scenarios, and it sort of kept all the automated to do so.

And really, that was just kind of like a generic kind of finding.

Sometimes it would go as high as half a percent.

It wouldn't always go to half a percent.

I think that in some ways depends on the inputs of the project.

the project type but that's you know effectively that's all in here you wanted to you wanted to try and test the viability of a particular style then then you would be able to get a sense of that a little more of that that particular project type and for what it's worth there's really nothing to prevent you

from making specific changes even away from the typical.

So you can see here in the mid-rise tier one project, we're assuming it's 135 units of ground parking and three spaces for every four units.

But you could go ahead and change those if you wanted to.

You would just have to go and hit reset to default at some point to make it go back to the original typical.

So you can try and mirror some sort of real life project if you want.

So I'm hearing you say that some of those

All right, thank you.

But also it wasn't asked.

I hope we were upfront with folks about what it is we were looking for.

We're looking to try and make this thing as reasonable as we could so that it can help inform decisions moving forward as opposed to this being the thing that's some part of the negotiation that's happening right now to decide on a number.

Yeah, 10 or 12 or something like that.

But you can make a change.

And then you exit.

No, it didn't.

It's a really good example of some of the real world issues here that I think are always going to be kind of project specific.

Because truth be told, the chances that I'm exactly right about what the rents were for this project in year 11 are like zero.

So all of them are just kind of assumptions.

And under this sort of model environment, what is it that we find?

The real estate taxes are related to the assessed value of the property.

So they should be rising every year.

Jeff, could you actually just come to the microphone so at least everyone can get the benefit of your questions?

There wasn't scheduled for this.

It seems like it's useful information but I also feel like anybody listening in is going to have no idea what's going on.

600 West Main Street.

Okay so we were talking about an assumption for to get an IRR you have to assume some exit date whatever that is.

So you picked a date like 10 years and through that the real estate taxes were zero.

Well, they were related on whatever you actually put in for the abatement.

You can set the abatement.

Right, but you were showing how the abatement doesn't help that much necessarily in getting that different yield up, but I'd like to look because what happens is

Real estate tax is like 33% of our OpEx or something.

So if that stays at zero and doesn't grow, and we can control other OpEx and grow our rent, then maybe that gap is, you said you didn't use net present values, for example.

I think we have, and it also goes to IRR, like if you can exit in five years, it's just a lot of variables other than just the going in yield on cost and also how you can go over time and get the benefit of the real estate tax abatement versus maybe two, three, four years and also how the burning off of it kind of decreases value and also seems

You also didn't have present value that when it burns off and the city gets the real estate taxes for let's say the 20 years and you net present value that versus the real estate taxes on that piece of property today.

My economics have shown sometimes it's like an 8 to 10x of what they get today.

Like they get 40 grand and over the time they would get 400 grand.

So that would be a good thing to factor.

And also I would really change your naming of it because I don't think the city's giving anything up.

I think it's a city investment in its infrastructure, just like a bridge or anything else.

I think that

This is a place for cities to make investments because of housing shortage and the other economic benefits that kind of flare out from housing.

The giving, I think, paints it in like developers are like, give me something.

I think it's really just the city invests right now in affordable housing, and the city invests a lot of different ways in city infrastructure.

Oh, for sure.

Yeah, but I want to be respectful of the wide range of opinions about this.

And that's, in some ways, why that is mentioned.

I'd like there to be, if you look at this through a,

You know, through a developer's lens, what does it tell you?

If you look at it through a person who's skeptical about development's lens, what does it tell you?

I mean, I don't mind at all.

I'm not debating, but I'm just, I was sitting there and I was like,

I'm thinking about the philosophical part of this and I'm thinking about people watching it and I'm thinking about people going, why do these people lead?

I don't think it's a giving.

I think it's an engine.

It's an impetus.

Thank you.

Well said.

Well, I just, again, looking at the presentation, you started with the yield on cost with just the market feasibility.

You just did the analysis, saying like, guess what, it's hard to build right now.

You did another one that you sort of took the same sampling and you said, you know, if we removed inclusionary zoning, it kind of moves, but not in a fundamental way.

Did you think about overlaying that same data set through the rent gap and through the other one?

Just a couple scenarios, just to sort of visually continue that thread, saying that with these things, look at things turn green.

You know, I was just curious if that thread would be helpful.

I could imagine that being helpful as a visual aid and only just in the sense that because these are all sort of typicals and rounded numbers,

Man, I wonder if it's like a matrix.

It's like six runs, and you show how you mess with it.

I think there's plenty of evidence that these can.

can change the landscape, especially if you are savvy enough to do things at the right time and take advantage of them in the right way.

And I think, in some ways, this tool will never be able to capture all of that stuff, nor really, I think, should it necessarily attempt to.

I think, in some ways, it's good to know that there's merit in an abatement.

It's not a cure-all.

And this last question I had was not about this tool or the study.

It's a question for Kelly in NDS was, did the city, and again, this is very naive, but this is new construction, new rental construction.

No, we haven't considered any sort of policy in that vein.

No, it's something I've just thought about.

I've seen other sort of tax abatements for other investments or other sort of, whether it's sustainable or small water or other things.

I was just curious if there was a way to say, hey, if you shave your rent down on your existing rental property, you would maybe pay less property tax or something.

Again, I'm not sure.

It's different because you're

This is net new revenue that you're basically giving some back.

This would be taking existing revenue and decreasing it.

Yeah, it's an interesting idea, for sure.

The only thing that I'm familiar with is tax payment programs or tax credit programs for making investments in the property, like rental rehab type credit programs, but nothing that would seek to reduce the rent.

It just occurred to me, it's often hard to work across silos, really in any organization.

We have an economic development team here at the city.

They're very good at problems like this.

Yes, they have.

They've been involved.

Chris Angolan and his staff and the tax assessor's office was involved in some of this, helped set cap rates and exit cap rates and some of the financial details.

I've got a question.

I'll try not to ask a policy question because I know you didn't look at policy or like what's the right policy, but I think the, and you didn't look at kind of the burden to administer an abatement program, but I do think that is something that we will probably want to consider and council wants to consider, but looking at the three example cities, and there's sort of like the two strategies, the traditional tax abatement, and then there's the rent gap abatement,

Could you just kind of summarize how does a traditional abatement actually get operationalized?

I'm building a project, so does the city have to tell me, here's the percent of the future tax revenue that we will refund to you?

And then is there something that has to happen every year

and a city department to make sure that this is administered.

No, I think all those are done annually and there's compliance components to all this stuff.

I won't pretend that I'm an expert in the administration of this stuff for sure.

So we're reaching the end of the things where I think I'm the number one choice for doing this stuff.

But yeah, I mean, it is certainly an ongoing

I can at least tell you sort of anecdotally one of the things here, so as cool as it is to say hey we made you whole through this rent gap method, there are other costs besides just those that come up with the creation of the requirement of affordable housing that

may not necessarily just be shown on a pro forma spreadsheet that are the kinds of things that will come up if you wanted to go down this path.

And some of them have obvious financial costs and some have karmic costs to deal with, just the headache costs to deal with.

But they're all real.

Any additional component that you're putting on to folks who are just trying to

It oftentimes just return the debt that they accrued by loaning the money from somebody else.

These are major projects.

Every one of these examples are seven, eight, sometimes nine figure projects.

No one has that money.

It's all loaned from someone else.

and you know oftentimes the capital you're raising does not care about the policy that you've put in place.

I think I have two actually short ones.

One, just so that I understand, you have in the matrix an entry for single-family homes, but IZ comes into play for 10 or more units.

I think at this stage it's kind of like a placeholder.

So this scope of study for the tax abatement study was really to look at where the city policy comes into play requiring affordable units, and that's at 10 plus units.

So we did not look at the potential for tax abatement on those.

OK.

I think in reality, it would not come into play.

These are sort of like, yeah.

That's why I was confused.

And then really quick, I think this is a question for staff.

Just a sort of sanity check.

The model that you're doing is saying, OK, most land tiers and most topologies are not feasible to build right now.

Oh, units not developed.

OK, not a lot.

Thank you.

Sure.

Thank you.

I decided it didn't make sense for me to sit back down again.

So Kelly Brown, NDS director again, and I'm here to present another presentation as kind of part of the NDS report on another study that we are getting ready to embark upon looking at our

We have an affordable dwelling unit manual with a specific focus on the in lieu fee requirements for student housing and non-student housing.

So I have a presentation to share that provides an overview of some background on the topic of student housing and

in what we're looking at in this study, a timeline, and really hoping that it can be an opportunity for Planning Commission to provide some feedback on the scope of work to really inform the study approach moving forward and desired outcomes.

And we would be returning to you with updates once the study is underway.

So again, what I'd like to try to share with you today is some background on student housing, some initial observations on

areas of concern or questions for what we want from our policies for requirements of in lieu fees for student housing and non-student housing moving forward, what we have proposed as a scope of work for study, an approach to community engagement, some potential options, really one set of options that we may want to test through this study, and a timeline for that work.

So go ahead, Patrick.

You can keep moving.

All right, so just by way of history of student housing here in Charlottesville, UVA enrollment growth has steadily increased and increased the demand for student housing.

As many of you know, students historically really lived on grounds in a limited capacity.

And then also in older apartment complexes near UVA,

That includes in converted single family homes and small apartment buildings.

and what we're seeing recently as enrollment has grown and construction costs combined with feasibility of development has changed over time.

Private developers are now stepping in and building purpose-built student housing around grounds.

Within walking distance to ground seems to be a really important consideration.

Another key feature is the provision of four-bedroom units allowing for rental by the bedroom.

You can keep going, Patrick.

So this is by no means a comprehensive assessed market assessment of student housing or really a comprehensive assessment of supply and demand, but just some kind of high level statistics to provide some foundation for understanding what the city is really facing in terms of need for student housing.

and how that's being met.

So total undergraduate and graduate enrollment at UVA.

One statistic I found online was 26,470 students.

Unfortunately, I broke a cardinal rule and did not document my source when I put that on the slide.

If you go on the UVA website and looks at their quick facts and figures, it puts it closer to 27,000 actually, 18,000 undergrad, 9,000 graduate.

So we're really kind of within that ballpark, hopefully, in terms of the statistics we can find online.

7,000 beds approximately are on grounds, 4,000 for first-year students.

The 2030 plan that UVA is following really aspires to house all first-year and second-year students on grounds.

There are five projects currently under construction off grounds that are looking to meet some additional need.

This map here shows the locations.

As I mentioned previously, they really are hugging close to that proximity to the university.

but a total of a little over 3,500 additional beds.

So there is still quite a bit of unmet demand, so to speak, for housing.

In terms of definitions of student housing in the development code, it is defined as projects that run by the bedroom within a half mile of campus grounds.

Some other things to understand about student housing, national reports note, again as I mentioned previously, there is a trend, a desire for private bedrooms and bathrooms.

high-end amenities, really to locate these near campus.

If you can get commercial development on the ground floor like you see there in that Jolly Roger and Greensboro example, I think that's commercial space, hard to tell.

That's a great thing.

And it is happening, that sort of development is happening here in Charlottesville, but around the country as well.

So you've seen this slide before.

Just by way of context, I did want to share that we are looking at the development code at policies and regulations that were established when we adopted it in 2023 and seeing what's working, what's not.

Hopefully you are going to get to the opportunity tonight for you to consider many Tier 1 and Tier 2 recommendations for development code changes.

Tier 3 studies are really much broader in scope.

You can keep going, actually Patrick.

Require a lot of engagement and thought for how the process should lay out to look at key questions and develop recommendations.

So looking at the Affordable Dwelling Unit Manual and this question of student housing actually really does represent a Tier 3 study that we have determined was appropriate to bring forward as a priority on our work plan, having housing now part of NDS and also given a number of questions about our student housing policies as a new development code is looking to be implemented.

Keep going.

So just a little bit more background as well.

As you all know, there are a lot of provisions in the development code for what intensity of development is located in different places.

Housing is located.

Is it permitted in all districts?

Except for the industrial districts?

So housing is permitted pretty much everywhere.

There are a number of overlay districts that govern some special features and special requirements such as our entrance corridors, our architectural design control districts.

There is no specific overlay district for where student housing can and can't be built.

It's just that a specific geography was established for where

You need to require a different type of in lieu fee if you're not providing affordable dwelling units.

So I think that's just important to understand that it's not that we are permitting student housing in some places and not in others.

It's actually permitted everywhere.

And we need to make sure that we are

not restricting different types of housing.

It's just that we created this geography to govern how we are allowing for affordable, an in lieu fee payment for affordable housing.

Keep going.

And so these are the specifics on that policy.

The affordable housing requirements that is for non-student housing, so residential development generally, any project that provides more than 10 units,

is required to provide 10% of units at 60% of the AMI or less or pay an in lieu fee.

Bonus sites for units is permitted if you are providing those affordable units at 50% of the AMI or you have to pay the same fee.

For non-student housing, that in lieu fee is equal to the average total cost per unit of developing a residential unit in the Charlottesville market based on a bedroom count up to three units.

So basically the construction cost.

For student housing, the requirement is different.

Again, I described the definition of student housing.

For student housing, actually no affordable units are required on site, but you may achieve bonus height and an in lieu fee is required.

The in lieu fee for student housing is different.

I've heard this described as a ban on affordable housing within a half mile of the university.

Well, so if it is student housing, then no affordable on-site units are to be built.

If it's non-student housing, then the requirement

applies.

So it's not a ban per se, but if student housing is the more attractive option to be built, then yes, you're not going to see affordable units built in those locations.

So in terms of a rationale for why do we have this approach, the rationale from when these requirements were established was that student housing projects simply do not typically include non-student housing.

This is really because that student housing program is very unique.

It's designed to offer rental by the bedroom for students and there are obviously parental student preferences for what those living conditions and amenities look like.

So you're just not going to see non-student housing included in a student housing project.

And so because of that, it was deemed appropriate to not require

onsite affordable units.

And so because of that, in looking at different methods of calculating an in lieu fee, when you compare the construction cost approach to the value gap approach, and the value gap approach was found to be lower, that was determined to be a more appropriate requirement.

Because if you're not requiring onsite affordable units, then how can you have

in lieu fee requirement that's as high as the in lieu fee requirement for non-student housing.

Did that make any sense at all?

I think what you said makes sense.

Yes.

Essentially, a lower fee requirement was deemed appropriate given the lack of an onsite affordable unit requirement.

So that was then.

And of course, this is where we are now.

And we're trying to determine if that still makes sense or if we should consider some other approaches.

We can keep going.

In terms of that geography of where that requirement is applied, it was determined that that requirement for student housing within a half mile radius of central grounds

would be essentially defined by the location of North Grounds and Central Grounds through our zoning map where there is no zoning for those parcels and then a half mile radius outside of those boundaries.

So some initial observations and concerns, and I've alluded to some of them.

Number one, there's an inconsistent in lieu fee payment actually structure for bonus height.

So that's something that I just mentioned briefly.

But if you are gaining bonus height, there is no requirement that you pay an additional

amount in an in lieu fee to achieve that bonus height.

Despite the fact that if you were providing onsite units, they would have to be at the 50% AMI rather than the 60% AMI.

In terms of just the student housing requirements specifically, the lack of requirement for an onsite unit really limits, as you were just pointing out, new affordable housing where student housing is the most financially feasible reinvestment option.

Student housing has a lower per bedroom cost requirement for an in lieu fee, so that further incentivizes student housing.

There's no consideration for conversions to non-student housing, no consideration for four bedroom units, which is what we're seeing the most of.

Can I really quick?

Sure.

When you say no consideration for four bedroom units, what does that mean?

There's no number in the chart.

So that's something that just really, more than anything else, needs a fix in the near term, because we're seeing four bedroom applications come forward.

So, as I mentioned previously, as we look at what the scope of study should be for this effort, it is

part of an annual review that is required of the Affordable Dwelling Unit manual, but we are really using this review as an opportunity to focus in on refining, studying and potentially refining expectations for in lieu fee payments broadly, but bonus height projects specifically and also student housing.

So our next steps are what we're really proposing is the scope of work for this effort is

to try to answer a number of questions through research and analysis.

We have hired 3TP to actually help us with this.

So they've left the room, but they'll be coming back I think at some point to provide a report on their findings on this topic of the in lieu fees and student housing specifically.

So

They will be, for example, updating the model to include student housing so that we can really determine what approach your requirements for an in lieu fee payment provides, the best balance of incentivizing production of onsite units without limiting development feasibility.

We'll also be looking at whether the current in lieu fee payment structures accurately reflect construction costs and the value gap method that's been proposed.

So just some basic fact checking there.

What are other Virginia jurisdictions doing?

What are the best practices?

But then, zooming out, we also want to take time in this study to make sure we have the right understanding of what our goals are, what the guiding principles should be for developing some recommendations.

So what are the city's goals for student housing?

Where do we think it should be located?

to the extent that that's something that we have power to control.

Should an in-loofy payment be greater for bonus height than for non-bonus height?

So those are all questions that we want to ask through some engagement with key stakeholder groups and broad engagement.

Keep going, Patrick.

And so speaking of engagement and stakeholders, certainly want to make sure that our key commissions have an awareness and understanding of the scope of work

We'll be engaging with property owners, with UVA, Albemarle County, TJAPDC, and advocacy organizations to get their input on what are the answers to those questions about our goals and guiding principles.

We're doing outreach to commissions.

Happy to report that we'll be using our new digital engagement.

Platform, Connect Charlottesville to do some digital outreach that hasn't been as easy for us to do in the past.

Just as a side note, Connect Charlottesville is live.

It right now is really just focused on a number of ongoing projects in NDS that has been something that Osea Kinlotan in our long range planning group has truly led that effort to make that

So check it out when you have a chance.

But this study will be featured in Connect Charlottesville as an opportunity to provide feedback.

And then we'll do some focus groups and pop-up visits as well with different groups that might be able to give some input.

And really the key questions for the community and for stakeholders are, what do you think is the most important outcome for this policy?

What should it accomplish for the community?

And what are the impacts or unintended consequences that we want to try to avoid?

So one set of potential options that we could explore, and a lot of these are simply crosswalks from some of the issues that I identified previously, would be to study the creation of a new payment structure that increases the requirement for bonus height to reflect that the onsite requirement for bonus height is 50% of AMI, not 60% of AMI.

As it pertains specifically to student housing,

Consider requiring onsite units for student housing.

Just because developers won't build them doesn't mean that we shouldn't have a requirement, especially if there's an option to provide an in lieu fee payment instead.

I think that some advantages of exploring that approach are that it would address the potential for conversions to non-student housing that's been raised as a concern, and also would allow for on-site units, affordable units, when financial market conditions are favorable to that.

added in Luffy requirement for four bedroom units.

That's kind of a must do.

And then really consider that geographic criteria.

Is there still a need given the potential merit of making the requirement for non-student housing the same as for student housing?

Are there other reasons to maintain a geographic boundary for some other reason?

and I think, you know, the merit of this is that it removes that unintended incentive to build student housing.

And then for all housing projects, I think, and this is a good tie-in with the tax abatement presentation you just received, you know, consider if there are some strategies to help offset the costs associated with affordable housing production and facilitate investment and that's, I think there's more to come on that topic.

So in terms of our timeline, we have brought the consultant on board to start to do some of that back of the house research, continue to update that model, look at what other jurisdictions are doing.

and try to figure out what are the right approaches to help balance, I'm sorry, every time I do this.

I can't help them, they give us six seven.

Sorry, I just have to go home.

No, I know.

Having kids.

I feel you.

In the next part of this process, we will really do that stakeholder engagement that I mentioned.

trying to get feedback on guiding principles and then in the spring we're hoping to be able to develop some recommendations for policy refinements and amendments as needed.

Questions?

Are there any sort of quick tweaks we could do to just get something rolling?

So you generally want to get your approval done in the winter or early spring so you can start construction and be done before the next winter.

Otherwise, you're in for another winter of construction.

You're in a bad position.

Yes.

OK.

I've got, it's not really a question.

Just a thought, because I think this is really important, obviously.

the neighborhoods especially surrounding UVA.

And seeing kind of witnessing the discussions and conflicts between the LV Collective and then the Fifeville project.

I feel like the diagram showing the boundary was reflect, it was just like a parallel line.

Maybe in talking to neighborhoods there's ways to adjust the line based on, you know, often we have like hillsides or train tracks or like maybe bus stops, you know, other ways that we could refine that mapping to be more in line with where neighborhoods see that divide because I think what we're seeing is that

Main Street has very different neighborhoods adjacent and maybe there's some neighborhoods that have more room for student housing that might be outside of that but has a great bus system and more potential for walking to commercial or whatever it is.

Anyway, I'd just be interested in looking at that as a

Potential place for feedback from neighborhoods.

I don't know if I have this fully formed, but I think the four bedroom was a great pickup on your part because you're correct.

I think those units, and I think there's five bedroom units in some of those developments too.

So I think getting ahead of that, I think to Lyle's point about trying to do something quickly, that seems like a smart thing to sort of incorporate.

What I was trying to figure out is it seems like we just saw, we're showing how building's tough right now.

It seems like some of these loopholes actually making student housing maybe less difficult to build and we're seeing it with bricks and mortar going up.

I'm curious as looking at affordability and looking at these new products being offered that are proximate to grounds that are solely geared really towards the student experience because they're by a bedroom, not by a unit.

I'm curious about what the sort of the ripples are to existing historic student housing.

And should the city put a bullet point on here to cast what incentives can go in some of these historic neighborhoods of these single family that once were single family homes that have been subdivided into student houses?

Is there a pathway for those landowners to maybe return those into market rate housing instead of student housing?

You know, I just wonder if there's some part of the student housing study that sort of looks a broader net that's not just new development, but it sort of helps restore some communities that, again, were historically single-family homes or multi-family homes and weren't just student properties.

I don't know what that is, if it's a text.

I think whenever we do a study like this, it always raises additional questions, right, or areas of study or exploration.

So perhaps that is something that could be added is just simply a note that while we may want to keep the scope of this contained and be able to bring forward recommendations that meet this very specific need, it could flag some areas for additional study in the future.

For my sake and as well as the public's sake, I think I heard you say a couple of times

There's this distinction between the geographical boundary for the in lieu of fee versus the definition of student housing.

From my understanding of what you just said, student housing is really just defined as rental by the bedroom?

Within that boundary.

It's only connected to the inclusionary zone.

Yeah, so that's going to be my follow up question was you had also said that student housing is permitted citywide.

Right.

There's no restriction.

Yes.

And some of the concerns you've brought up is that potentially that in lieu fee inside the boundary is over-incentivizing the creation of student housing versus some other forms of housing.

Yes, that's correct.

So I don't want to repeat a previous question, but maybe to add to it, again, the previous topic was about the high cost of building in Charlottesville.

All the changes I'm hearing in this presentation would increase fees.

We're adding more fees for higher bedroom accounts, which, by the way, makes sense.

But the effect is to make the fees higher, given what's being built.

Changing the fees for the height bonus units, again, makes sense.

But the effect is to raise IZ fees.

And then I think maybe

The biggest change I heard was, and again, I get the idea to harmonize in lieu fees for student housing and non-student housing, but it sounds like the in lieu fees are much, much higher for non-student housing, like doubling your chart.

If you harmonize those by raising student housing in lieu fees to match non-student housing fees, you're talking about doubling them.

And that seems really challenging to square with.

3TP's previous presentation about how

IZ is already a material burden on development such that we have three units in the pipeline city-wide.

I think harmonizing by lowering the non-student housing IZ fees and lieu fees to match the student housing fees makes a lot of sense.

It lowers costs.

And I think the rent gap just makes sense conceptually in a way that construction costs I don't personally get why that would be the model.

But I would like to hear more about

Yeah, just a clarification there.

I don't think we know yet that it would be appropriate to bring the

requirement for student housing up to the same level as what is currently required for non-student housing, nor that the current expectation for non-student housing is appropriate either.

So maybe that's something I can clarify in this presentation, but we will be looking at the in lieu fee expectations for both student housing and non-student housing to see if it's

if it is providing the right balance of promoting the provision of onsite units and still supporting the production of housing, period.

So we will look at both of those questions and we just don't know yet.

But another point to make is that I think a key question that we will be trying to raise through our engagement is what are we trying to do here exactly with these in lieu fee expectations?

Are we trying to

You know, increase revenue for uses elsewhere.

Are we trying to promote the production of onsite units or

So just so I'm clear, what I'm hearing you say is that the possibility of harmonizing student housing and non-student housing in lieu fees might look like raising student fees to meet non-student or lowering non-student to meet student, and those are both on the table.

Yeah.

I assume we'll have the chance to weigh in on the engagement, the stakeholder engagement that looked like on the timeline was like February or something.

I don't have time to restudy it because I don't look at this very often and it's long but the affordable housing plan is the best guide that I have on those topics of what are we doing and why are we doing it.

Yep, that's a good reminder.

We do have some comp plan guidance to help us know how to move forward.

All right.

Thank you.

So now we have matters presented by the public, not in the formal agenda.

So the zoning code text amendments will be a public hearing, so there will be a time to speak to that.

But if anybody in the audience or online wants to say anything that is not related to the zoning code text amendments, now would be the time.

Sure, so if you'd like to speak in matters from the public you may step forward and I'll please provide your name.

Hi, Jeff Levine again.

Tonight's very interesting because what's laid out to you and you're really tuning into it, the development community, the people who go into business to do this, they follow A, the path of less resistance and B, how they get an economic return on their risk and their capital.

If you look at just everything that's been laid out, the structure is to build affordable housing or maybe hospitality.

Actually, one of my sites I pivoted from residential to hospitality because the economics didn't work.

So things can work.

If you make the in lieu payment so high, but you combine it with a real estate tax abatement that's given if we build affordable housing and the math works, we'll be more inclined to build affordable housing because the math works.

I will tell you that almost in every instance it probably pays to pay the payment in lieu because you have no burden of that low-cost housing that you basically have to give away and you can finance that in lieu thing.

I want to talk to Jeremy about that in his model because his model always contemplates that you're building these and you're getting less revenue which drags it down and so you need this tax abatement.

There are ways what I'm saying is to put these together and I don't know if every department head is thinking collectively because also our code is meant to have density and to go tall where you get the most bang for your buck.

If you can use a half acre or an acre parcel to build 300 units versus 12 acres building only three stories, that's where you get the best bang for your buck.

I'm not supposed to talk about the code, but if you help the economics for larger projects, high-rise projects that give you the most bang for your buck, that helps.

If this amorphous thing, not called the code, worked in a way that actually worked for an urban setting and wasn't laid out for basically green space, because I'm going through it now where the code is just very difficult to navigate for urban sites that are made for the most density,

Everybody spoke together about what everybody wants and what I constantly hear is the city wants housing.

They want affordable housing, market rate housing.

And what we've heard tonight, none of that is being built.

Student housing is being built, some hospitality is being built,

and you had a great point.

The thought of raising any fee and anything that makes this more complex, which are that thing out there called the code has made this even more complex to go through site plan approval and everything and adding time.

We're not together, the private public sector and all the public heads on looking to get what we want.

Right now,

there's this vision of encouraging development and everything in place does not do that.

Mr.

The pen just shot up.

Thank you very much.

Good evening commissioners and staff.

This is Valerie Long.

I'm at Williams Mullen.

I enjoyed watching the reports this evening and appreciate the thoughtful comments that have been provided.

I wanted to just provide some comment to the most recent discussion you just had about the fee and lieu rates for affordable or for student housing relative to non-student housing and the perception that it creates

an incentive for student housing to locate in certain areas so they can take advantage of the lower fees.

In our experience, we work with a lot of the large national student housing developers, find that they are focused almost entirely on location, finding a location that is strategic for their market, finding a willing seller,

and finding a seller who will work with them on a price that actually pencils.

Most of the time, by the time they find us and we're talking to them, they've heard, oh, there's some sort of affordable housing requirement.

We don't know what it is.

Usually, they assume it's a requirement for a certain number of affordable units.

We spend a fair amount of time educating them.

on all of the types of things that Director Brown discussed today about the differences for fee and lieu, where you can do units, where you can't do units and what the different schedules are and why they're different and how it works and why is there not a four bedroom option and all those things.

They don't know any of that information.

They certainly factor it into their budget and their purchase price, but they don't start by looking at where can we go

and develop student housing in the city and pay the least amount of money for our fee of lieu.

That is definitely an afterthought.

Thank you.

I see James Snyder has a raised hand.

Yes.

My name is James Snyder.

I have a home at 206D 5th Street SW.

It's one of six units on a third of an acre called Oaklawn Cottages.

Across the street are another six units on a third of an acre called Oak Grove Cottages and next door to us is a three-story

Condominium flat called Fifth Street Flats.

These were all built 20 years ago by a local developer and a local architect, and they define what you're trying to get through your missing middle effort.

Unfortunately, they, along with some historic homes on Fifth Street, have been rezoned to RX-5 seven stories.

They are damaging our property because with no setbacks, someone can come in and build student housing right next to our property line.

And we have been asking since June to get this fixed.

We are the poster child of what you're trying to get done.

Together, we have four units by several times built that define missing middle.

Then you're getting built through all this time and effort out in the neighborhoods.

We have requested and had no response to, how can we get our zoning fixed?

It's going to create hardship on us.

It's going to create disinvestment.

It damages our property by removing any setbacks requirement.

You have hundred-year-old homes, which are historically contributing on Fifth Street, which are now zoned for several stories.

We're right next to the railroad tracks.

And you also have very high-density tall buildings being built next to the railroad tracks.

You may not know this, but the state of Virginia hopes to include a passenger line from Charlottesville towards Richmond and further east.

These developments being built right on the property lines are going to make that eventual improvement to the Charlottesville station impossible.

And the city has not coordinated with the Virginia Passenger Rail Authority, which is a state agency that owns the property.

They really don't know anything about what you're doing.

There's some serious things that need to be looked at here, and while we're talking about distant pieces and studies and more consultants, some basic things like rezoning us back to what we should be so we can help show off what missing middle can be in terms of scale and livability.

Instead, we've been punished with this out of the blue seven stories RX-5 zoning.

We've been talking, we've been at meetings, we've had no formal response from the staff,

We've heard on occasion from the council, the planning commission, the board of architectural review concerns about, well, that's terrible.

We're going to take care of it.

I've heard no outrage tonight from the commission.

This is a problem that needs to be solved.

Otherwise, you're going

I think we can help you out a little bit.

Matt or anyone else on staff, there is a method, correct, for a rezoning for a private property owner to do rezoning.

A rezoning can be pursued by any property owner for their property.

There is a process.

Staff is always happy to help with that process.

It's not necessarily done as a collective, but you would do it for your property.

Okay, so I don't know if you heard that Mr. Schneider, but there is a process that you could go through if you wanted to.

Rezone your property rather than waiting for counsel or anyone else to do it for you.

It sounds like you could do it yourself or as a group.

So hopefully that helps.

Any other online individuals?

Hi, I'm a third year student at UVA and I live at Lambeth 474 student dormitory and I'm very excited for the tier 3 amendments and I think the city is focusing its energy on the right directions and starting to address some of the problems the public is talking about a lot in the past months and I'm wondering about the communication the city has with the

The private actors or developers within Charlottesville and Albemarle, because I remember a few months back when the Tier 1, Tier 2 zoning text amendments are starting, there were a lot of energy and enthusiasm from developers about communicating and working with the city on

Working out specific solutions on tier 3 amendments and having ideas on how to make development more feasible with the city and I'm wondering if there's been movement on that front or will there be any discussion held in the near future because I feel like developers themselves of course look want to develop and want to make money and I

that also, of course, want to bring positive impact to the city itself.

And they themselves have worked out the financials more than the city probably has.

So it'd be wise to get their opinions pretty early on and just get thoughts on that as this tier three process is also going on.

Hi, my name's Kim Powell, I'm the Chief Operations Officer for City Schools and there was a mention about ripple effects with the high-rise student development.

I just want to make sure that this body's aware that we do have recent precedent for a significant ripple effect with public school enrollment that occurred between 2010 and 2017-2018, where we were one of the fastest, after decades of no growth at our public schools, we actually had year-over-year growth of three to eight percent.

and it was when the new high rise UVA student housing opened up on West Main, it freed up single family home stock in the city in a way that hadn't been seen in a very long time.

So you will see likely that opportunity with this next wave of or this next push for high rise student development.

What happens of course as those parcels free up, well that's some of the issues you're wrestling with because it will all depend on how quickly

Developers scoop that up for more UVA student housing or whether it goes towards single-family homes.

But we'll be watching all this keenly from the public schools.

OK.

Chair, now I do not see any increasing.

All right, so our next item is to go into the zoning tax amendments.

Does anybody need a break before we jump into that?

See, because you guys scolded me about the address thing last time.

Hi Chair, Planning Commission, new Planning Commissioners, welcome.

I'm Matt Alfley, I'm the Development Planning Manager at NDS and tonight you're going to be holding a public hearing related to a series of development code amendments and making a recommendation to City Council.

Next slide.

You have seen a

A few of these slides before previous meetings, what you see here is the background of the development code, the approach to moving minor amendments forwards and next steps.

As I've stated in the past, the best way to think about this tiered approach is the car analogy.

I'm kind of the boring guy.

When we talk about amendments, we're all geared up for the tier three.

Think about the car analogy.

Tier 1 is washing the car.

Tier 2 is changing the oil, rotating the tires.

Tier 3 is the car's making an awful noise and needs a new transmission.

And so what we're looking at tonight is moving those Tier 1 and Tier 2 amendments forward.

Next slide.

In your packet, you have a full outline of the Tier 1 amendments.

But for general purposes, there are 63 amendments that we're proposing to move forward.

These are addressing copying editings, Scribner errors, legislative updates, and small changes.

Next slide.

As I said in your packet, the full list of all amendments are available, but in this presentation you just see some examples of those Tier 1 amendments.

Next slide.

In addition to the legislative amendments we need to make to conform to changes in state regulations that happened on July 1st of this year.

Next slide.

And here we see the Tier 2 amendments and where staff is recommending 23 changes to the code.

The purpose, again, is not to alter the intent sections of the code.

This is to provide clarity, to remove some misunderstandings, and just to provide small changes that do not require much in the way of community engagement outside of the public hearing we're having here tonight.

That is another distinction when thinking about Tier 1, 2, and 3.

Tier 1 and Tier 2, really the public engagement should be happening here at a public hearing.

Anything that's Tier 3 really needs to be a robust community engagement where we're hearing from the community and making the changes that are coming from our fellow residents.

Next slide.

I heard some examples of these Tier 2s.

Again, the full changes are in your packet with the full analysis with them.

So next slide.

The process to how we got here tonight has been an ongoing effort, one with many different touch points.

Staff has been continuously collecting data on these issues and keeping track of them in the working document, which is attachment C in your packet this evening.

In addition, we have had a number of work sessions with this body to improve and refine the amendments that you are holding the public hearing on tonight.

Next slide.

At the most recent Planning Commission work session held on November 12 feedback was provided to staff on the proposed Tier 2 amendments.

Most of Planning Commission's recommendations were incorporated into what you're seeing here tonight, but there were a few areas that came up that staff did make changes to and I wanted to make sure they were covered.

So you can see what we heard from Planning Commission and how we addressed it.

The first being the existing structure date.

There was talk at that meeting of having a rolling date to allow structures that have been built for the next period of time to count toward that.

The commissioner is worried that a fixed date might exclude new units from qualifying from the existing structure bonus.

After reviewing it, staff was concerned that having a rolling date could create loopholes and would really need an engagement with the community if you wanted to go that route because even though it may feel arbitrary that that December 18th date

you know might feel arbitrary but there is definitely a decision was made as a community that structures before that date at a significance and we want to preserve them.

Definitely when you get into your conversation I can get into some of the loopholes.

Staff would be worried about the rolling date and so that's why we're still at least recommending having a fixed date.

It's definitely something we could come back to and review in the future but at least it would clear up

the issue right now we have right now which is there is no date and so if something got a CO it could be viewed as an existing structure the next day.

The next was the side setbacks for attached dwelling units.

Staff had kind of presented an alternate form.

There was a lot of good constructive conversation in the work session.

We went back and looked at it again and came up with, we felt, a better solution by just putting the attached side and detached side in each zoning district and then having the definition

And then finally, the last one, next slide, was the fence and walls.

Staff's original suggestion was to define

have a different definition of fence.

There's a lot of good debate and conversation on that at the work session between the six feet and the four feet.

The staff took that information back and reworked it to allow more of an exemption section within fences and walls.

And we went with 4.5 to get a little wiggle room for post when you're talking about four feet is what the commission talked about at the work session.

And that would get at least room to have post and then have those four foot panels.

It also has the exception

for when it's required for health and safety under the building code and when it's required for separation to state agencies such as ABC.

Next slide.

So you'll hold your public hearing.

Staff recommends you approval on these, but you'll have your public hearing and your conversation.

And then next steps will be taking these to city council.

With that, I'd like to say that I am here with my staff, which I want to give a big thank you to.

This has been a big push for them over the last eight months, so I really appreciate their efforts.

So yeah, just questions, and then I'm going to let the public talk.

I have one question.

I remember the discussion we had about side setbacks for allowing attached dwellings.

And so the wording would basically say, if it's one project, you're building two attached units, the zero side setback applies.

where they're attached in a single project.

You could, but the project means that's part of it.

You're planning to build four units.

Now, you may phase it and say, I'm building four units in four phases, but at least it's still documented and it's still part of a new plan.

Got it.

OK. That's kind of what I was hoping.

OK.

Any other questions?

A little question I think may not be an issue.

I apologize if you explained this last time.

Needing a building permit for something over 256 square feet.

We're getting rid of that requirement because the building code doesn't require a permit for something smaller than 256 square feet.

Why we're doing that?

Sorry, let me get back to where it is.

This is B.5.

We've crossed out our permit as required for accessory use or structures exceeding 256 square feet of gross floor area.

Correct.

What we're saying is if it doesn't need a building permit, you still have to follow the rules, but we're not going to make you go through.

that whole development process for your dog house.

It's very similar to, there's a lot of things that don't, that were basically held to complaint driven.

Okay.

Okay.

So generally someone adding, like going to Lowe's and buying a prefab shed to put in their backyard, you guys are never going to see it.

No, it'd be kind of the, if somebody bought that shed and put it in their front yard, we would want, this kind of gets to that conversation that we had in the work session where we originally were saying we didn't want maybe accessory structures in the front yard, but if we're allowing accessory structures kind of anywhere, we at least want what's in that facade range to match all of our development standards, which

This code is very much a form-based code, even though our last code was somewhat.

This really is not so much about the use, whether that's a doghouse or shed in the backyard.

It's a structure, and the structure has design elements that it needs to have.

OK. Other questions?

No.

All right.

It looks pretty good, the edits.

The code itself is still kind of a mystery to me as to how exactly how it works, but all the edits from the work session I remember a few months ago look pretty good and reasonable.

Thank you.

Oh, I'm sorry, sir, can I get your name for the record?

I forgot to say it the first time.

Joe Leong, third year urban planning and econ student, 474 Lambeth Fieldhouse.

Thank you so much.

I want speakers.

You can click the raise hand icon if you'd like to speak.

Mr.

Comments, guys.

I've got a little collection of them, but I'm going to save them.

Anybody want to go first?

I get to be the bad guy tonight.

I'm going to be nice, I swear.

My concern is that we talk about some of these things we can get around with a special exception process.

But that special exception process is lengthy and expensive.

And I don't know if there's some way that some of these things seem so small.

And is there another way to make them go faster and not cost as much?

For example, exceptions to setbacks in build-to zones.

I understand that's the same exception process.

It's $1,800, and you've got, it looks like, Matt, you told me it was four to five months.

Yeah, so, correct.

And I wonder what happens when you've got a project in front of the BAR, and they want to,

You know, push something back a little bit.

I mean, it sounds like we're holding up the project four to five months.

Or does this special exception process have to happen if you've got for that streetscape exemption?

So when you've got an easement in your front yard, and there's an opportunity to ask the administrator whether your setbacks can be moved back

The amount of that easement, is that the same?

OK.

OK. All right, so this is generally just, well, all right, anybody else who wants to have some sort of variation to that front yard setback, it's a four to five month, OK. That's a concern, I don't know if there's

Yeah, I'd feel so much more comfortable with some of these things if there is a way to speed that up somehow.

Because I feel like that's the type of thing where there may be a better project.

And we're not getting the better project because waiting four to five months is too much of a risk.

Chair, could you explain?

I mean, when you're talking about that,

I mean, right now, someone would have to go through that process to change the setback.

Is your concern, could you just expand on that concern?

Yeah, I guess it's, I'm trying to think of a good example, but I mean, you know,

I'm not sure why somebody would want to push their building back further but maybe they have a use they want to put in the front yard like they want to have a I think we had a somebody had tested the site where the

that apartment building that no one likes that's going, well the apartment building is causing so much controversy by West Haven, that site.

Mitchell Matthews had come into the BAR to test that right before we adopted the zoning code and they were going to put a hotel there and they wanted to have a outdoor dining area out in front and that would have required a deeper setback and I think everyone on the BAR agreed this is fantastic, this would make a better project

But that project would have had to go through the whole special exception process.

Now something that large, I don't feel like that's such a big deal, as much a big deal as, I don't know if there's smaller projects this might

I think, and this probably is not going to be very helpful to this conversation, but I think as part of these amendments going through, you see that we're making some changes to our development review process.

And then there are some things we've been working on in-house for a while that are just on that process-wise.

We would like to get those in place.

It's changing.

I think as we get through this round we could explore

something more, you know, trying to scale up or down special exceptions.

It might not be something for right now, but it could be something that would be a path that we could explore for on the development review side.

Again, how do we remove barriers?

How do we speed things up?

And it might not be a code thing, but just a scaling special exception because, yes, if someone is

building a 12-story apartment building and they have a set of special exceptions.

They want to move forward.

Yes, that probably needs to be a little bit more onerous in time to go through.

Not too bad, but if somebody is just

trying to put a building in their backyard off East High Street.

And I think that actually, the element workshop is kind of where I keep coming back to.

It just felt kind of ridiculous that we ended up there.

And that's another thing is I'm wondering if, so, let's see.

The code allows you to add on to the back of an existing building.

without having to build within the build two zone.

But it doesn't let you put a separate building in the backyard without doing so.

Well, this is more of a policy thing.

So this is the code is definitely speaking to about bringing things up to the street.

That is the fundamental part of the code is to build this more urban where you're bringing things up to the street.

So where we landed is to at least have a relief valve for

supporting structures, not the primary structure.

We felt the primary structure, if you're going to do an addition, you know it's fine, but that primary structure needs to be up to the street before you build a next primary structure.

But we, at least in these amendments, it's giving a relief valve that it didn't have before where you couldn't do any structures.

And I guess my concern is that a dwelling unit cannot be considered an accessory structure and I just wonder about the examples where you've got a single-family house and they want to have another dwelling unit somewhere on the property and I know they're you've got

In the R zones, it sounds like there's an exception for that with the existing building preservation bonus provision.

But I mean, we've got a lot of houses and historic buildings that are in like High Street is in the CX3 zone.

And a lot of those old houses are well beyond the Bill 2 zone.

And I guess

A way around that is somebody could add onto the back of them, physically attach the back of them, but it just seems silly that you're physically attaching versus building behind.

You're getting the same thing.

And I will say that I didn't say this in my presentation, but I think y'all are aware.

Once I wrap up this, we're jumping into 2026 with lessons learned and try to move things quicker.

One of the suggestions that I shared with you, Chair, maybe we look at this in 2026, I'd be a little hesitant of blanketing all the districts, but

You know, as an example of the preservation, if it was contributing structures, were deemed to meet Bill 2, that might be something.

My thought is that this would be a little bit more of a fundamental change because the code is speaking about getting to the street.

I do have something to that.

So I was heavily involved with the construction of the theory of the zoning.

And our thought at that time was that the special exception process would be relatively fast and easy, that it would be a speedy and effective process.

It would not be like a special use permit.

It would not go to council.

It would just go to the Planning Commission, focus on just the specific issues at hand,

and to dispense with it efficiently for the good of the public.

That's against the law.

We have since learned.

No, everything goes to council.

If it's a special exception, it must by law go to council.

That changed I think in 2016, which was before my time.

It's not my fault.

But we are bound by law to be more

Thoreau, and public with these decisions, which we weren't calculating when we wrote these.

Yeah.

I mean, ideally, it would be like that where it would be like going to the BAR.

It's a one month, 30 days, and a small fee.

You know, get some consensus and move on, but I guess that's not going to happen.

But yeah, so again, the same thing.

If we need a special exception for the active depth, I'm still really stuck on the definition of active depth.

I guess, is there a free administrative, this is a bad hallway, this is a good hallway type thing, or this is a tiny little bathroom that's part of a residence, it doesn't count, versus this is a multi-user bathroom that's not allowed in this area?

So how it's currently written, it's really prescriptive.

Well, it's written that it's as defined by the administrator or something as in the wording.

Yeah, but I'm saying what's existing now.

So with the modification you guys made, how is that, with any project that someone's got, because any office project is going to have, or if you've got a building, you have a project in a DX zone, I think it's a 30 foot active depth on the front facade, which I believe goes up the whole front facade.

Someone puts a, I guess they just have to come with their plans and say I've got this many little closets in these offices and there's a corridor here but it's part of the office.

It's not a major circulation corridor.

So what I will say is, again, one of the trade-offs.

A form-based code is meant to be

allow more freedom, not about use, it's about form, but it does require an applicant to have their ducks in a row a little earlier in the process so that we can determine they are complying with the development code early in the process.

And so we are trying to be sensitive to not needing architectural drawings that early, but they've got to show us something that they need in these active depths.

This is building in a little more flexibility.

I think we would be consistent on how we use that flexibility.

So I'm wondering if someone builds apartments.

There's going to be bathrooms and hallways and closets and all that within the 30 feet of active depth that's in a DX zone.

I hope I'm not misquoting.

I believe that's how the DX is defined is that the front facade has to be 30 feet ground floor to the roof.

Please correct me if I'm wrong if I'm making something out of nothing.

But if someone puts an apartment there, that's not by definition possible.

So I don't know.

I'm assuming by reading this, I'm hoping that when it says, you know, as determined by the administrator, that the administrator will look at that and say, well, these are all components of an apartment, so it's allowed within that 30 feet.

When we wrote this, we were...

We were trying to give more flexibility to the administrator, but unfortunately when you get into the actual section on active depth, it actually has these things like hallways, restrooms, called out differently.

I would have preferred to take them out of the definition, but because they're so tied into the code is why they're still in the definition.

I don't know if we'd have time to fix that section of the code to match.

I'm less concerned because the projects that this would really impact what we're seeing is they are probably going to be coming forward with special exceptions.

Unfortunately, we haven't had large projects.

Someone come forward to us and say, I'm doing this 100% by right.

I'd love that.

I'd love not to see y'all.

But the reality is we're running into it with our topography where we're seeing some of the active depth really on the front end becoming an issue because you're dropping down and your plates aren't lining up and people aren't wanting to do the modular.

I'm going to go for an easy one at this point.

I love the changes to fences and guardrails.

The one thing I noticed is that for bullet point A, you see that it does not have a solid foundation.

And I could imagine someone could build a masonry wall that would have a solid foundation.

Well, because the code is split into walls and walls,

Fences.

And so there's a whole list of requirements when you get into foundation is a wall.

And so we kept that in place because that actually is more permanent.

So it gives a little more discretion to city council if they wanted to do a special use.

OK, so there is a difference between someone building a brick

The code breaks it up into walls and fences.

And so we didn't touch the walls because that really hasn't been an issue.

OK. All right, I guess solid foundation is, I mean, that feels a little fuzzy, but I guess it's all right.

I'm trying to think if there's going to be a fence.

I mean, I guess they've got a little concrete

OK. Let me just make sure I didn't miss something.

I'll just add, I mean Carl I think I'll add to what you're saying.

I share your concerns about the active depth going all the way up to the roof and I feel like after however many hours our work session was and we were all tired we were like why do we have you know we're starting to feel like why do we have this the build to requirement like we want you to preserve the structure but then we say oh but it's not to the build to miss would make it harder for you to preserve the structure and

And I will say that what we are hoping as we roll into the 2026 amendments, I am hoping it is not 60-something and 20-something.

I hope we can really pare it down that we, Planning Commission as a body, can work on.

And it's maybe like four or something a little more manageable to dig into deeper.

But again, our tweak's not changing the intent of the code, and so they really

I mean, I do hope that for next year we do actually tackle some philosophical issues in this because I think we've got some disagreement between the commission and staff as to, and maybe I'm speaking for you guys out of turn, but it seemed like from our work session that we definitely had some philosophical differences that we'd like to study at least.

And I'm content if we have a work session every month that includes going through the stuff.

That's what we have to do to get this right.

I'm sure you guys don't want that.

Can I ask you a question?

I'm not going to make a motion.

I'm not allowed yet.

And this is purely procedural.

I have no opinions about the content yet.

Are there topics in tier two that people on the commission want to see pulled into tier three to talk about more?

I think the issue is that we want to make changes as fast as we can, and there are issues that

Changes we want to make in tier two that are not, we can't make them in tier two.

They need to wait for tier three.

So we keep trying to grasp the tier three items and pull them into tier two and we're getting told not to.

For good reason.

It needs more public comment and study.

That makes sense.

Okay.

For emotion, can we include some

I don't know if you need in the motion I mean we when we do our

City Action Memo.

We recap this meeting that there's certain highlights that you want to make sure are captured.

We will definitely include that.

It's just the motion, when we go to city council, it's just we say Planning Commission recommended, or recommended, not all recommended approval.

I guess one of the nice things is if it goes in the motion, there's an understanding as to whether it's kind of a unanimous feeling amongst the planning commission.

Do you mean things like the philosophy of having less special exemptions and fees and just that idea of making things easier to do when each site is so very different?

I mean, I think that's where you live in a very hilly place.

There's not a really like neighborhood that looks like another, you know, in terms of setbacks.

Yeah, I mean, if the commission wants to, I guess, put in the motion, they can put in

I guess what I would say, though, is I still would put them in the memo, because the motion isn't included.

OK.

Well, then maybe we do our motion, and then we do our, we'll just have another additional set of comments that can

We can tack on for you.

Mr.

Darren, can you call the vote?

Commissioner Carp?

Abstain.

Commissioner Yoder?

Yes.

Commissioner Mitchell?

Yes.

Chairman Schwartz?

So potential thoughts for commentary.

I think one of the things I'd like to add is a serious look as to whether we want to maintain build two zones as opposed to just having minimum setbacks.

A redefinition of active depth.

and maybe even a consideration as to whether we need active depth.

And I guess a concern over the ability to add onto existing properties without having to build in front of them.

Yeah, I think, could you like build that into the back, sorry not the back of the build two, like I think the build two.

It's related, yeah.

Yeah, so maybe reevaluating the build two zones in,

in reference to existing buildings, gotcha structures.

That would be an idea.

I think that would be a very possible idea.

I'd ask the question as to whether the BAR or any building in a design control district or IPP could be exempt or any construction in those districts.

That's just another rabbit hole that we could possibly go down.

I think in general the idea would be how do we

Just an investigation of the Bill 2 zones with an eye to preserving our existing buildings.

Is that general okay?

I'll just say that my general philosophy here is to do exactly what you're asking for.

I think you're asking for a little bit of consensus from us, even outside the motion, as to what we're sort of pushing toward council.

And as a new member here, I do just want to say that my general philosophy is to

ease the burden that some of this stuff puts on developers.

You brought up some good points here.

Three or four or five months doesn't seem like a long time in the general scheme of things, but it really does have an impact when you're thinking about building and people potentially taking out loans.

And there's real monetary and feasibility impacts that come from that.

So my general philosophy while I'm up here is to try to ease some of those burdens from whether it's a homeowner wanting to add an addition,

All right, any further comments?

We don't have Phil anymore.

Mr.

Chair, I have some questions for staff if I may.

Yes, please.

A question about the land bank.

We've been busy with other matters.

Okay, hello.

So the land question of whether or not to create a land bank was a question posed, well it's been a topic of consideration I think for many years.

It was a topic of consideration for the Housing Advisory Commission.

last year, and a number of recommendations were being studied by staff.

Through discussion with the HAC, the decision was made to kind of put a pause on looking at the land bank for the time being.

There were a number of considerations related to that recommendation, but that's kind of where things are at the moment.

Thank you.

I had a call today with a school board member and we heard from a City Schools employee tonight both sort of singing the same song about better collaboration between the school board and the Charlottesville Planning Commission.

It's been an issue very close to my heart.

I shared some ideas but I just wanted to flag the issue that

School board members want to work with us and do better work together.

Mr.

Chair, I'd like to make a motion.

I will second that.