Charlottesville to study student‑housing fees and on‑site requirements after commissioners raise displacement and metric gaps

Neighborhood Development Services Director Kelly Brown told the Planning Commission the city will expand its Affordable Dwelling Unit (ADU) manual review to examine how in‑lieu fees apply to student housing and to test whether current rules inadvertently incentivize purpose‑built student housing near UVA.

Brown said staff has contracted 3TP Ventures to update the feasibility model to include student housing and to test options including raising in‑lieu fees for student projects, requiring on‑site affordable units for some student developments, and adding a fee category for four‑bedroom units (which the city currently lacks a metric to price). She emphasized the study will be paired with stakeholder engagement, including outreach on the city’s Connect Charlottesville platform, focus groups, and meetings with property owners, UVA, Albemarle County, and advocacy organizations.

Why it matters: Under current code, student housing (defined in the development code as rental‑by‑the‑bed within a half‑mile of Central Grounds) is not required to provide on‑site affordable units; instead it pays an in‑lieu fee calculated on a 'value‑gap' method that staff said is lower than the construction‑cost‑based fee charged for non‑student housing. Staff warned that that differential may help explain private investment concentrated near campus and may reduce on‑site affordable production in those neighborhoods.

Key details - Staff cited approximately 26,470 total UVA students on a slide but said they did not document the source; Kelly Brown noted UVA’s website lists closer to 27,000 (about 18,000 undergraduates and 9,000 graduate students). - Staff said roughly 7,000 beds are provided on UVA grounds and a little more than 3,500 additional off‑grounds beds are under construction. - For non‑student housing, development of 10 or more units triggers a 10% affordable unit requirement at 60% AMI (or payment of an in‑lieu fee). For student housing in the half‑mile geography, no on‑site affordable units are required; instead the student in‑lieu fee is based on a value‑gap approach. - Staff flagged that the code currently lacks a dedicated metric for four‑bedroom units (developers are being billed using a three‑bedroom calculation), and recommended that adding a four‑bedroom fee category is a near‑term fix.

Commissioner and public discussion Commissioners and members of the public discussed the potential that the current in‑lieu fee structure creates an incentive to build student housing in proximity to campus, the implications for neighborhood displacement, and the need to align fee policy with broader housing and comp‑plan goals. City Schools staff warned that past waves of student housing freed up single‑family stock and produced increased public‑school enrollment in later years.

Next steps Staff will proceed with the scoped study this spring, update the 3TP model to include student housing scenarios, and return recommendations for policy refinements and any necessary code amendments after stakeholder engagement and further analysis. The study is explicitly framed as research to inform policy choices, not an immediate ordinance change.

Sources and provenance: NDS presentation and Q&A, Kelly Brown (presentation began SEG 1642; scope and timeline discussion through SEG 2067).