Subject
title
Work session on the Zoning Ordinance Rewrite (ZOR) focusing on development review process improvements (FAST 2).
end
Department
CPDS - Zoning Review & Other
Recommendation
Staff recommends that the Mayor and Council receive the presentation, discuss, and provide direction on the recommended development process improvements.
The following feedback is requested from the Mayor and Council to guide next steps:
• Do you support the proposed streamlined Project Plan process?
• Do you support the proposed streamlined process for Planned Development Amendments?
• Do you support the development types proposed for administrative site plan approvals?
Change in Law or Policy
Direction on the requested items would be implemented through future changes to the zoning ordinance through the Zoning Ordinance Rewrite (ZOR).
Discussion
Improving the development process directly relates to three of the Mayor and Council’s primary guiding principles:
1. Housing
2. Economic Development, and
3. Effective and Efficient Service Delivery
Mayor and Council have explicitly stated the expectation that development and permitting processes must significantly change and be streamlined to attract more economic development and significantly increase the market rate and affordable housing in the City. At the September 16, 2024, work session on Housing Supply strategies, the Mayor and Council endorsed the following strategies:
• Streamline the development review process.
• Provide applicants for new housing developments with speed, predictability, and certainty with administrative approvals.
Since the September 30th work session on FAST 2 (see Attachment 1 - FAST 2 Project Charter), staff has explored ways to achieve the Mayor and Council’s objectives in this area. During this work session, staff will present recommended changes to the city’s development review processes and seek the Mayor and Council’s guidance. Development review processes are regulated through the city’s Zoning Ordinance. As such, while FAST 2 identifies and recommends changes to development review processes, the proposed changes would be implemented by amending the text of the city’s Zoning Ordinance through the ongoing Zoning Ordinance Rewrite (ZOR) project.
Housing Guiding Principle
As has been noted before, the United States is in a housing crisis. According to Freddie Mac, the mortgage finance giant, the nation is short by approximately four million units. The deficit is particularly true with low-cost rentals and entry-level starter homes favored by first-time buyers. The Great Recession of 2008 led to a severe drop in housing production throughout the nation, including in Rockville. Inflation, high interest rates, and zoning restrictions continue to contribute to the shortage. The lack of supply has caused home prices and rents to significantly rise, and the gap in affordability is worst for the lowest-income households. High housing costs are a challenge to many individuals and families, especially newcomers to Rockville and those with lower incomes. Finding a place to rent or buy is more expensive than in decades past. Much less undeveloped land is available in the city or county while the overall regional population has increased markedly, resulting in a rapid increase in the cost of land. Other pressure points to the city’s housing challenge are Rockville’s desirability as a place to live and work within the Washington, D.C. region and a growing senior population. Most future housing will be multi-family buildings in mixed-use centers served by public transportation.
National Strategies to Address the Housing Crisis
A partnership between the American Planning Association (APA) and the National League of Cities (NLC), the Housing Supply Accelerator is a national campaign to improve local capacity, identify critical solutions, and speed reforms that enable communities and developers to work together to produce, preserve and provide a diverse range of quality housing by realigning the efforts of public and private stakeholders in the housing sector to meet housing needs at the local level.
The Housing Supply Accelerator Playbook is for local elected officials and community planners working to boost diverse, attainable, and equitable housing supply in communities nationwide. One of the many strategies within this Playbook includes streamlining processes for housing development review and approval including expanding administrative (staff) review and decision. Requiring a permitted use to go to a planning commission or an elected body for review and approval is an added step that can increase costs and risk due to the lack of predictability. Expanding administrative reviews can significantly help facilitate housing production.
The APA provides guidance on the appropriate use of administrative decisions and describes their benefits in several publications. Administrative approvals offer numerous benefits for housing production, economic development, and job creation. The timeline for administrative approvals is typically shorter, more efficient, and more predictable, reducing project cost, delays, and uncertainty for applicants; this, in turn, encourages development.
• Administrative approvals allow for a faster and more efficient decision-making process. For projects that are approved at a staff level, time can be saved that would otherwise go toward preparing and presenting before an elected or appointed body. Streamlined approval processes can increase confidence among developers and increase the likelihood of investment in the community.
• With fewer meetings and associated legal or consultant costs, administrative approvals are typically less expensive for applicants. This can help make projects more financially viable, particularly in times of increasing construction costs.
• Administrative approvals can increase the predictability of development processes. Staff are trained in consistent interpretation and application of the city’s development regulations, which reduces risk for the applicant. The APA Equity in Zoning Policy Guide states, “Because staff are often trained to make the same decision in the same way for similar applications, [...] some of the opportunities for inequity introduced in the public hearing process are removed. The ‘applicant neutrality’ of this type of decision-making has led some communities to focus on making as many zoning decisions as possible administrative decisions.”
• Administrative approvals also increase overall efficiency by allowing appointed or elected bodies and the public to focus on more complex infill projects near existing residential areas while allowing desired development projects located in targeted growth areas to be handled administratively.
Economic Development Guiding Principle
The housing crisis has led to a significant economic development issue. The lack of affordable housing has lasting impacts on the local workforce and can hinder businesses from attracting and retaining the talent they need, thereby hindering growth and deterring new businesses from moving in. A continuum of housing types is needed, especially a housing product that is affordable, in an urban setting, and close to transportation alternatives. When workforces cannot find housing or maintain housing expenses, they explore new options, sometimes driving them away from the community, region, or even state. As housing in the Rockville becomes less available or affordable, the desire to work in Rockville is reduced due to the additional cost and time to live farther away. This also results in greater regional traffic and environmental impacts to due to more vehicle miles driven.
Effective and Efficient Service Delivery
Staff agrees that our processes are much longer than they should be and should be changed to create efficiency, and effectiveness, and remove some of the risk of developing in Rockville. We also believe our current requirements are not as flexible as needed to resolve development issues in a timely manner. To inform the recommendations presented in this report, staff first mapped out current development review processes. Then steps were analyzed and recommended for removal only if they were redundant or did not add value or provide a critical function. The intent is to provide an efficient and transparent review process that facilitates high-quality development that meets all requirements. Efficient, predictable processes are critical for economic development, job creation, and the construction of new housing. Increasing the number and types of applications that can be approved administratively is another way to increase efficiency and predictability in development decisions.
Our existing Zoning Ordinance has not been comprehensively updated for over 15 years. Our development processes have resulted in some proposed developments taking three years or more to begin construction. Some developers claim that the time and expense of our existing review and approval process limits Rockville’s attractiveness for new residential developments.
One example is the lengthy process that project plans, Planned Development amendments, and associated site plans must follow. A review of cases over the past five years shows that the average time from the initial pre-application submittal to the approval of the project plan is over 18 months. Additionally, projects subject to the project plan process must also receive site plan approval. Of the recent cases reviewed, subsequent site plans were in process for an average of an additional seven months, resulting in a total of two years from initial submission to final Planning Commission approval. This is not the result of a significant outlier. Only one project proceeded from pre-application to project plan approval within a year. There are a variety of factors for this. These are complex projects, often with design challenges that take time to resolve. Applicants may place a project on hold or choose to delay resubmittals. Often these issues are beyond the City’s control. However, reviewing the process shows several duplicative steps and several others that provide limited value, which are further discussed in the Recommendations for Development Process Improvements section below.
Processes for each of these are further described in flowcharts in Attachment 2 - Current and Proposed Processes.
Rockville’s Advantages
Tackling this national housing supply shortage at the local level demands a comprehensive approach to achieve meaningful progress. Staff believes that Rockville is in a much better position than other localities to take action to make this progress.
Pipeline For New Residential Development
Currently, Rockville has the zoning in place to permit thousands of new residential units. Specifically, owners have been given certain development rights and approvals to construct these residential units based on the zoning of the property provided that proposed site plans meet all the technical standards and requirements included in our current zoning ordinance.
Between now and 2050, there are nearly 6,000 housing units in the pipeline, with a total of 12,160 units either approved, projected, pending, or completed (see Figure 8). If the owners/developers move forward on these projects, Rockville would be on track to meet its housing targets of 3,800 units by 2030 and 8,600 housing units by 2040. However, not all approved, projected, or pending units will necessarily turn into completed projects due to a range of economic factors, including many outside of the city’s control. Current factors such as higher than normal interest rates and high cost of construction materials impact the decisions on whether to move forward with projects even though housing demand is high. However, the city can take actions that could activate residential projects sooner.
Figure 8. Housing Units Forecast16
|
|
2020-2030 |
2031-2040 |
2041-2050 |
Total |
|
Approved |
4,699 |
460 |
- |
5,159 |
|
Projected |
- |
3,440 |
1,843 |
5,283 |
|
Pending |
295 |
226 |
- |
521 |
|
Completed |
1,197 |
- |
- |
1,197 |
|
Total |
6,191 |
4,126 |
1,843 |
12,160 |
Source: City of Rockville Department of Community Planning and Development Services
Rockville 2040 and Recently Adopted Town Center Master Plan
The Mayor and Council adopted the Rockville 2040 Comprehensive Plan in 2021. Among its many recommendations related to land use and zoning, the Plan includes recommendations to rezone over 600 properties to allow for a significant increase in the number of housing units permitted. Additionally, the recently adopted Town Center Master Plan establishes a goal of 3,000 units for Planning Area 1 by 2040. The Plan also proposes new character areas in the Town Center that would allow significantly increased building heights and therefore a greater number of units than what is allowed under our current zoning.
With the adoption of a new Zoning Ordinance and associated Zoning Map in 2026, the potential number of new residential units will increase significantly if owners/developers move forward with projects.
Zoning Ordinance Rewrite (ZOR)
The Zoning Ordinance Rewrite project provides an opportunity to create new development standards for all site plans to address items that are now required by conditions on a case-by-case basis. Making these items requirements in the zoning ordinance will bring about consistency and should reduce the need for discretionary reviews. For example, requirements for increased EV charging stations and enhanced public use space requirements would address previous conditions placed on specific developments.
Updated FAST Plan
The City has been working on changes to the development review and permitting processes for a number of years. In October 2018, the Mayor and Council endorsed an important City project entitled FAST (Faster, Accountable, Smarter, and Transparent - Improvements to Permitting and Development Review Processes). This name reflects expected results among staff and stakeholders.
On September 30, 2024, staff presented an updated plan for a second phase of FAST containing outstanding items from the first phase as well as additional new action items (see Attachment 1 - FAST 2 Project Charter). The action items listed in the Charter include many different development review and permitting functions and identifying areas of improvement in administration, programs, and processes.
Following the September 30, 2024, work session on FAST 2, staff began working on key items including:
1. Incorporating action items into the ZOR, including:
a. Adjusting the approving authority for certain types of site plans.
b. Streamlining the project plan process.
c. Streamlining the Planned Development (PD) amendment process.
d. Allowing for some Historic District Certificates of Approval to be approved administratively.
e. Establishing an administrative process for plats.
f. Creating a more efficient and effective alternative to the site plan process for changes of use for new businesses/tenants.
2. Drafting changes to Chapter 21 (road code) for future Mayor and Council consideration.
3. Aligning permitting action items with the Results Rockville action item to establish and implement a metric to reduce the time to building permit issuance and re-establish an expedited building permit review process.
4. Restarting the Quick Start Program, effective on February 17, 2025. A project may qualify to participate in the program if it is a commercial interior alteration/renovation or a new commercial tenant where there is no change of use or occupancy. The program allows for limited interior work to begin while the construction documents undergo a full review.
5. Working toward a virtual one-stop shop by configuring Development Review and Public Works applications into the City’s online permitting system, with some planned to go live later this year.
While most of these items will not be further addressed in this staff report, the staff is now tracking the FAST project in the Envisio software system and is developing a variety of progress reports.
Three action items were included in the FAST 2 Charter (see Attachment 1 - FAST 2 Project Charter) and discussed during the September 30 work session for which staff is now providing additional detail and alternative recommendations and requesting additional direction. Proposed changes to these four items are reflected in the updated project charter and are the focus of this report. It is important to note that the four items discussed in this report represent only a part of the whole development and permitting process. Therefore, while the recommendations would lead to faster and more efficient processes, changing these three items alone should not be viewed as a complete solution. Implementing the rest of the FAST action items and completing the ZOR is critical to achieving more comprehensive improvement.
Recommendations for Development Process Improvements
1. Streamline the Project Plan process to be achievable within six months as follows:
• Mayor and Council continue to be the deciding body, making findings on Adequate Public Facilities (APF), consistency with the comprehensive plan, and the proposed uses and intensity of the development, following a recommendation from the Planning Commission.
• Combine the preapplication area meeting and the post-application area meeting into a single post-application meeting, consistent with the Mayor and Council direction at the September 30 work session.
• Remove the mandatory briefings for the Planning Commission and Mayor and Council. There are a variety of other means for these bodies to learn about the proposed development. Plans are posted on the city’s website, applicants are required to notify the Mayor and Council electronically, and city staff is available to answer any questions about proposed projects. Reducing the number of public meetings is also consistent with the State’s goals of limiting the number of public meetings required for priority development projects as stated in the Housing Expansion and Affordability Act.
• Allow site plans that follow project plans to be approved administratively. Currently, these site plans are approved by the Planning Commission even when they are subsequent to a project plan. Because the Mayor and Council have already made the more discretionary findings on the project at the project plan stage, including consistency with the Comprehensive Plan (considering and informed by a recommendation from the Planning Commission), staff can confirm that the site plans are consistent with the project plan and comply with all aspects of the Zoning Ordinance and other city requirements such as transportation, utilities, stormwater, fire access, and forestry. These site plans can be processed concurrently with the project plan, so long as the project plan is approved first.
For a comparison of the current process and these proposed changes, see Attachment 2 - Current and Proposed Processes. Staff estimates that these changes would result in a reduction of approximately seven weeks in the minimum time required to complete the project plan and associated site plan process. This change would also result in significant time savings for staff. The project plan portion of the process would be achievable in six months provided that applicants are able to address comments and provide timely resubmittals.
2. Streamline the Planned Development (PD) amendment process to be achievable within 6 months.
Throughout the City, there are a variety of Planned Development (PD) zones with special provisions for development standards and uses. Development or redevelopment within these zones requires a PD amendment, which the Zoning Ordinance currently requires to follow the same process as the project plan. While both are subject to Mayor and Council approval, they represent different requests. While project plans represent new development or complete redevelopment, PD amendments propose a change to a development previously approved by the Mayor and Council. Because of this, the staff proposes a new PD amendment process that reflects this.
• The Mayor and Council will continue to be the deciding body, making findings on Adequate Public Facilities (APF), consistency with the comprehensive plan, and the proposed uses and intensity of the development, as well as any changes needed to the PD regulations.
• One post-application area meeting would be required, consistent with the Mayor and Council’s direction at the September 30 work session.
• The Planning Commission would approve subsequent site plans. These site plans should be eligible for concurrent review along with the PD amendment, so long as the PD amendment is approved prior to the site plan.
For a comparison of the current process and these proposed changes, see Attachment 2 - Current and Proposed Processes. Staff estimates that these changes would reduce the minimum time required to complete the PD amendment process by approximately five weeks.
3. Designate certain mixed-use district developments for administrative site plan approval.
A review of site plans for new development processed over the last five years found that of the 20 applications filed, only one met the criteria to be processed administratively. The other 19 required Planning Commission approval. There is an opportunity to identify additional types of developments that could be approved under the administrative process.
• Redevelopments in the most intense Mixed-Use zones (MXB, MXCT, MXE, MXCD, and MXTD) when not within 300 feet of a residential zone (see Attachment 3 - Mixed Use Zones Residential Buffer Map) should be eligible for administrative approval.
This recommendation is similar to Montgomery County’s process. Within Montgomery County's mixed-use zones, new development proposals that are within height and area thresholds and not adjacent to certain zones can be approved administratively. However, many developers in Montgomery County go through a process called the “optional method” which significantly increases the density and must go through the County Planning Board for approval.
4. Designate additional project types for administrative site plan approval.
The staff has developed the list below of types of development that align with current City plans, policies, and priorities that could be approved administratively.
• Nonresidential to residential conversions.
• Research and development (including life sciences) in the MXE zone (see Attachment 4 - MXE Zone Map). This aligns with the City’s economic development goals and REDI’s FY 25 Strategic Plan priority effort:
“Assist the City in marketing the Faster, Accountable, Smarter, Transparent (FAST) permitting program and other initiatives for businesses and with the Zoning Code re-write to streamline opening and operating bio/life science businesses and reduce barriers to coming to Rockville. This includes more ‘by right’ uses.” In addition, the city can promote sites within Rockville that are ‘Bio-Ready’ which means biotech laboratory and manufacturing uses are by right.
• Housing developments with 20% or greater affordable housing units City code currently requires 15% of residential units in a development to be Moderately Priced Dwelling Units. Some housing developments, especially if funded by Low-Income Housing Tax Credits (LIHTC), may exceed this, and the administrative process would benefit them.
• Housing for senior adults and persons with disabilities. This would reduce barriers to the development of supportive housing types for vulnerable populations.
• Residential development up to 19 units. These projects are below the City’s threshold for providing Moderately-Priced Dwelling Units (MPDUs). This would allow small projects to proceed faster, which is critical for challenging smaller residential projects.
For a comparison of the current process and these proposed changes, see Attachment 2 - Current and Proposed Processes. Because the processes remain similar, time savings for this change would result from establishing an available Planning Commission agenda, drafting staff reports and presentations, and sending notices, which amounts to a minimum of three to six weeks, along with the other advantages to administrative approvals referenced in the “National Strategies to Address the Housing Crisis” section above.
Mayor and Council History
In October 2018, the Mayor and Council endorsed the original FAST Project Charter. In May 2019, the Mayor and Council endorsed an updated list of action items. Based on this, staff developed and implemented a work plan and presented it to the Mayor and Council in November 2019. Staff provided updates by memo during this first phase of FAST. On September 30, 2024, the Mayor and Council held a work session on a second phase of FAST. Following this work session, several action items were revised to reflect the Mayor and Council’s direction.
Public Notification and Engagement
In anticipation of launching this next phase of FAST, staff established an internal working group, which developed a statement of purpose and outcomes as shown in the draft charter. The team also assessed the development and permitting process and created a list of priority items to improve. In addition, the team engaged external customers through a survey and a listening session, and staff met and received feedback from both REDI and the Chamber of Commerce.
Next Steps
Staff will draft revised processes in the Zoning Ordinance Rewrite (ZOR) based on the direction from the Mayor and Council. The draft language will be presented for public review and discussion and further direction from the Mayor and Council through the ZOR process.