Letourneau, Turner Propose Phasing Development Cost Updates

As Loudoun supervisors work through updating the county’s Capital Intensity Factors—the formula that determines how much developers should pay to offset the cost of new government facilities their project would generate—there is a new proposal to phase in planning increases over the next three years instead of all at once.

The idea is a collaboration between Supervisors Matthew F. Letourneau (R-Dulles) and Michael R. Turner (D-Ashburn) and had not yet been evaluated by county staff.

The CIF is used when planners are negotiating proffers associated with residential rezonings. The current CIF was adopted in 2018, and the county’s Fiscal Impact Committee has been working with county staff since 2020 to update it.

A presentation by staff to the board a month ago showed the updated formula would result in the county collecting much more. Currently, a single-family detached suburban unit in the eastern planning region has a CIF of $47,554, derived from a population per housing unit of 3.78, county cost per capita of $4,702, child per unit of 1.07 and a school cost per child of $29,782. Under the proposed update, that same unit would have a CIF of $106,900, derived from a population per housing unit of 3.84, county cost per capita of $7,139, a child per unit of 1.13 and a school cost per child of $70,500.

During the February meeting, some supervisors expressed concern steep increase, and the Loudoun Chamber of Commerce expressed similar concerns in a white paper sent to the board.

The proposal by Letourneau and Turner would phase those increases in—with 60% of the total cost going into effect July 1, 2024, 80% July 1, 2025 and 100% July 1, 2026. Letourneau said while the work that the Fiscal Impact Committee had done over the past four years to create a new formula is important, he had concerns about implementing it all at once.

 “In this particular case, I think it's fair to say we don't really know what that's going to do the market other than probably encourage a lot of by-right development, and potentially shrink the amount of land available because landowners are going to have to adjust to the fact that costs are suddenly double or triple in this category.”

He said phasing in the costs would allow time to watch how the market reacts. He noted that even at the 60% stage, the amount collected will be more than what the county is getting now.

Supervisor Koran T. Saines (D-Sterling) said the Fiscal Impact Committee included members of the development community and they recommended 100% of the formula.

“Unless you can propose maybe phasing in a little faster, then I might be able to support but what’s being presented, I can’t support it,” he said.

Supervisor Kristen C. Umstattd (D-Leesburg) said delaying implementation of the full formula would cost taxpayers.

Budget Director Megan Bourke agreed.

“The CIF is meant to address the impacts of residential rezoning beyond base density. So, alternatively, yes, the tax rate would absorb the costs of additional residential development,” she said.

Supervisors Laura A. TeKrony (D-Little River), Saines and County Chair Phyllis J. Randall (D-At Large) said that by the time the full formula is being applied, it would be time to start the process of updating the CIF again, but Bourke said that work was going to start again as soon as next month.

“This takes about two years to update,” she said.

Letourneau reiterated that the new numbers would be “a shock” to the system and said it could affect affordable housing as well.

“It's generally to our benefit to get somebody in for a rezoning because we have the ability to control the pace of growth. We have the ability to create better communities. Yes, higher density, but oftentimes, we can get proffers that help offset those impacts which we are not going to see with by-right development,” he said. “… It makes sense to phase it in over a couple of years.”

Turner agreed and said the motion was not intended to question staff’s logic in creating the formula and the numbers it produced.

“The industry has said this is a huge impact on the industry and we would like a couple years to kind of figure out, first of all, absorb this and build this into our performance but secondly to see what the unintended market consequences are going to be from this kind of increase. And I thought that was a reasonable compromise,” Turner said.

An initial vote directing the staff to prepare for the phasing passed 5-3-1 with Saines, Umstattd and TeKrony opposed and Caleb A. Kershner (R-Catoctin) absent. The board is schedule make a final vote on implementing the CIF during its April 16 meeting.

This article was edited at 11:49 a.m. March 22, 2024 to correct county staff's position on the proposal.