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Reducing Threats To Our Rural Economy

February 6, 2013 by Blue Ridge Leader filed under Editorial, Opinion No Comments

By Malcolm F. Baldwin

Our Board of Supervisors has made lowering property taxes a key objective, to be balanced by higher commercial tax revenues. Several supervisors recently noted that each new Loudoun residence costs $1.61 in schools and other public services for every dollar it contributes to property tax revenue, while commercial development costs only $0.31 for every revenue dollar it contributes. The board justifies its approval of Metro into Loudoun by plans to ensure net positive returns from new commercial development around the two Ashburn Metro stations, despite cries of dismay and coming taxpayer doom.

Will our supervisors actually restrain costly residential development and foster more rewarding commercial growth? Loudoun has grown by over 15 fold in fifty years, so how will our Board make future growth rates and property taxes more manageable and allow Loudoun residents to continue enjoying their diverse suburban and rural “worlds?” How will the board ensure economic viability of the future Metro station growth centers, vastly improve transportation in eastern Loudoun, and sustain and strengthen our rural economy?

It’s no surprise that the board focuses on suburban issues, since six of our eight district supervisors represent Loudoun’s suburban east, and nearly half the population of our two western districts of Blue Ridge and Catoctin lies in suburban neighborhoods. Long-term interests of rural Loudoun appear taken for granted, misunderstood or neglected.

Rural Loudoun’s economy returns more to the county in property tax revenue, tourism, and other economic benefits than it requires in county services and infrastructure. Maintaining this net economic benefit to the county requires continued low density and demand for public services. But rural economic attributes remain undervalued. The rural economy “doesn’t move the dial” in lowering taxes, one supervisor argued last year. But, of course Loudoun’s costs and taxes will rise if the rural economy declines and the west becomes suburbanized.

Our rural economy has grown, not because of exclusionary efforts of the “elites” (an oft-repeated charge), but by productive economic use of rural resources. Rural businesses provide revenue of well over $100 million a year, most obviously from our 34 wineries and 100-odd vineyards, our produce farms, bed and breakfasts, wedding venues, and the arts, culinary and equine sectors. Equine alone employs over 1,000 people and attracts growing numbers of tourists from all over the metro region. All rural sectors increasingly attract tourists into rural Loudoun, thanks in good part to vigorous efforts of Visit Loudoun and the county’s rural economic development staff.

But our rural economy remains fragile because current rural zoning has not fully protected it from disruptive development pressures. The recession has merely disguised and postponed its vulnerability. Today we have at least 15,000 additional houses that can be built by right in rural Loudoun, and we continue to lose farms and farmland. In 2002, we had 1,516 farms on 164,753 acres; in the ensuing five years we lost over 100 farms and 22,000 farmland acres. The rural zoning put back in place in 2007 does not maintain the protections established by the earlier rural zoning in 2003 that the Virginia Supreme Court rejected two years later because of alleged flaws in public notice. New vulnerability resulted because:

  • The 2004-2007 Republican-majority board of supervisors, being development-friendly, was unwilling to appeal that decision or re-advertise to correct any notice deficiency. So, rural Loudoun reverted to 3-acre zoning for 21 months;
  • During that time the county processed 172 subdivision applications for 3-acre zoning in the previously down-zoned rural sector; and
  • Finally, the agreed-upon rural zoning “compromise” allowing 5-acre “cluster” development on 20- acre lots in the northwestern sector (AR-1) actually resulted in essentially the same overall density as the 3-acre zoning it replaced, because density there had previously been allowed on net acreage available for development (minus floodplain, steep slopes, etc.), but the new zoning was based upon gross acreage (not excluding such unbuildable lands).

Not surprisingly, therefore, last year every rural business sector participating in the Rural Economic Development Council’s development of a business strategy reported significant problems dealing with the threat and reality of suburban development.
What can be done to reduce threats to our rural economy? First, it requires support for the new Rural Business Strategy to strengthen entrepreneurship in rural Loudoun. Second, rural businesses will also need continued protection through conservation easements. Loudoun has some 51,000 acres in conservation easements – virtually all in our rural section – that allow rural business to continue with greater security. But, not all properties have the attributes required, and many farmers look toward future sale of their development lots for retirement income.

A third strategy has been adopted in 2010 by Frederick County, Virginia: a Transfer of Development Rights program. Unlike the Purchase of Development Rights program that requires county funding, this program uses free-market practices and requires no taxpayer funds. The right to develop one’s land has market value, so owners in the agricultural area may sell such rights to an owner or developer in the county’s urban area designated for increased development density. Frederick encourages preservation of farms with the best soils by granting them double the number of saleable development rights for possible transfer. The program’s implementation has been delayed by the recession, but it is well received and not seen (as it might be perceived by some in Loudoun’s heated political arena) to be some kind of gift to the landed “elite.” Working farmers and developers view the program as a practical market-driven tool.

Might Loudoun adopt such a market-based program? One concern is that TDRs do not bring proffers from developers because they stand as a direct exchange of development rights from the agricultural “sending/selling” area to a designated “receiving/purchasing” area. But, in fact, we know that Loudoun’s proffers do not now pay for the capital facilities required, nor do they ever cover the high operating costs of schools and other public services.

Another concern is that TDRs will only be suited to receiving areas where transportation and other services can keep pace with greater density. But, TDRs remain a viable tool; development pressures on rural Loudoun, forestalled by recession, will increase from approved subdivisions, bringing higher valuation of agricultural land, adverse impacts on agritourism and increased costs to the county from each new home.

Since our article last month, the Planning Commission has rejected two of the eight pending developer proposals to shift zoning from commercial to residential. But, the fate of all of them – totaling over 10,000 units – depends on board decisions. Given the board’s announced commercial priorities and understanding of residential costs, we should expect either rejection of all rezoning proposals or, at the very least, approval only under conditions that will not increase net residential growth and costs to the county.

TDRs warrant serious consideration as a means toward that end. We need our supervisors to direct the county staff to assess the ways in which a TDR program might effectively reduce residential development in rural Loudoun. Addressing this issue will further board’s desire to reduce residential costs through greater commercial development.

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