Nick Campion

Incentive Development: The Process


Rochester’s Incentive Development process needs serious improvement. I'm writing a pair of posts to start the discussion. The first will be a review of the existing process to establish common ground.  The second will focus on challenges and improvements. I realize that our zoning process can be stuffy so I’ll try to keep my ordinance references short and get you caught up as quickly as possible.

To describe what the incentive development process is and what makes it different from our standard process we should probably start with the ordinances that define it.  Here is section 62.600 from Rochester’s Land Development Manual giving the background on Incentive Developments:

Certain actions by landowners, however, can make higher intensity development on tracts more attractive and publicly acceptable. ... It is the purpose of this section to define those features which the City of Rochester finds are of public benefit and which go beyond meeting the minimum public health, safety and welfare standards, and to provide applicants who provide these additional features additional density or floor area as a trade-off.

The incentive development process exists because sometimes special actions taken by a landowner can make projects that would not meet zoning requirements attractive and acceptable to the community. We have decided, as a community, that we prefer to negotiate with developers to find a balance rather than reject projects outright.  This is conceptually codified in section 62.640:

The amount of bonus density will be negotiated with the Commission and Council during the Type III review process. Density bonuses are granted in exchange for the incorporation of features determined to be of public benefit.

The key concept here is that the public bodies are put in the position of negotiating with the developer.  The entire process is quid pro quo based on the language; “Density bonuses are granted in exchange for the incorporation of features determined to be of the public benefit.”  This negotiation is the bedrock of the incentive process.  The developer brings forward a development with certain public benefits above and beyond the City’s standards and a specific ask of the community in terms of increased density.  

The incentive development process doesn’t exempt a project from the standard zoning review.  Projects still have to meet other zoning requirements (besides density / floor area) or receive variances.  It is a common misconception that incentive developments can ignore our zoning regulations, but that is incorrect.  Incentive projects must apply and justify variances to our zoning code just like any other project.  Even the maximum bonus density is specified in our ordinances, though it can be exceed through a variance as well, despite how convoluted that sounds.  The takeaway is that incentive developments are not the "wild west" by law and still have to meet our City's standards. (Or get variances, but I digress...)

The Incentive Development process exists to provide flexibility.  Under a rigid zoning standard, there is no room for negotiation. Projects with substantial public benefit may not be able to work at the standard density.  If the project can’t work economically at the standard density, under a rigid system the project could not move forward.  Incentive Developments allow for a middle ground between a community that wants better developments and amenities in their neighborhoods and developers who want projects that are more profitable.  When used judiciously, it can be a practical answer to spurring redevelopment of an area.

The incentive development process is about promoting positive behaviors.  As a City, we have  many goals including sustainability and design criteria.  We can use incentives as a way to reward projects that help our community meet our goals.  This can be preferable to simply mandating a policy for all development.  It depends on the policy and potential incentive, but having the ability to match the bonus to a specific project can be both a more practical and more effective approach to changing development standards.

Weighing the public benefit of a development is an art rather than a science.  On one hand is the increased density (more apartments or retail space) which the developer wants.  On the other hand are the public benefits and amenities proposed.  There is no formula for the density bonus value of architectural enhancement of a shared car, two examples of incentives.  As we go over a project, each council member is adjusting their scale by the public benefit they perceive for each component.  This process determines if a project deserves additional density. Collectively, the individual evaluations determine whether or not a project proceeds.

 That is the incentive development process in a nutshell.  I boiled it down to what I feel is typically the decision point for these projects: the public benefit vs. increased density.  As I mentioned in the preface, I believe the process has some considerable flaws.  I’ll follow up this blog post with those issues, answers to questions that get asked and some recommendations for the process moving forward.