Who Pays for Growth? Virginia’s Debate Over Impact Fees

By HRCNN Staff Writer
Hampton Roads Construction News Network

When local governments weigh new development, one unavoidable question lingers: who pays for the infrastructure that growth demands? Roads, schools, utilities, and stormwater systems all must expand to meet the needs of new subdivisions and multifamily communities. Across much of the country, states impose “impact fees” to ensure that new housing and commercial projects contribute their share of those costs.

In Virginia, however, the practice remains rare. Unlike states such as Florida, Texas, or California, where impact fees are a standard tool, Virginia leans heavily on negotiated developer contributions—known as proffers—or on general tax revenues. The result is that the costs of growth often fall on the broader public, rather than being tied directly to the developments that generate new demand. In 2025, House Bill 2683 sought to make impact fee authority more accessible by lowering the population threshold for localities and removing a growth-rate requirement. The bill, however, stalled in committee, leaving the status quo intact.

There is one notable exception. In late 2024, Stafford County revived its transportation impact fee, becoming the only Virginia locality currently using the tool. Beginning in July 2025, Stafford will levy fees on residential, retail, and commercial projects, with revenue projections between $15 million and $20 million annually to fund transportation improvements. This example underscores how limited the practice remains across the Commonwealth.

The debate resonates strongly in Hampton Roads, where population growth continues to strain classrooms, roads, and stormwater systems. At zoning hearings in Chesapeake and Virginia Beach, residents frequently voice concerns about crowded schools and congested roadways. Local officials acknowledge the urgency but, absent a broader impact fee framework, they are left to rely on case-by-case proffers or general funds. For many residents, this feels like subsidizing development with their tax dollars.

Developers counter that Virginia’s existing proffer system already places heavy financial obligations on them. They warn that layering impact fees on top could increase housing costs in a region already grappling with affordability challenges. Supporters, on the other hand, argue that without new revenue mechanisms, infrastructure will continue to lag behind growth—leaving long-term strains on communities and taxpayers alike.

For now, Virginia’s growth is paid for through negotiated contributions and public resources. But as Hampton Roads continues to expand—and as demands on transportation networks, schools, and stormwater systems grow—the question of who pays is unlikely to fade. Whether the Commonwealth eventually embraces broader impact fee authority or clings to its traditional approach, Hampton Roads will remain at the center of the debate.

About HRCNN
Hampton Roads Construction News Network (HRCNN) is the region’s dedicated platform for reporting on development, infrastructure, and policy. By delivering accurate, timely coverage, HRCNN works to keep residents, builders, and decision-makers informed about the forces shaping the future of Hampton Roads.

Zoned for Concern: Chesapeake Rejects Data Center Proposal in Landmark Vote

By Earthly Infrastructure® HRCNN Staff Writer

As Virginia communities evaluate how to accommodate next-generation infrastructure, the City of Chesapeake has emerged as a case study in zoning governance, public participation, and responsible land use planning. In June 2025, a rezoning application to allow the development of a 350,000-square-foot data center was unanimously denied by City Council following extensive community input and procedural review. The decision reflects Chesapeake’s commitment to evaluating land use proposals through a lens of compatibility, transparency, and long-term community impact.

The proposed project, submitted by Emerald Lake Estates I Inc. and developer Doug Fuller, sought to rezone a 22.6-acre site at the corner of Centerville Turnpike and Etheridge Manor Boulevard from agricultural (A-1) to light industrial (M-1). The proposed use included a two-story data center facility supported by fiber infrastructure from the Southside Network Authority. While the project’s economic potential was acknowledged, residents and stakeholders raised concerns related to noise, water and energy demand, proximity to residential neighborhoods, and lack of clear performance standards or environmental mitigation plans.

In response, the Planning Commission convened a public hearing in May 2025 that drew over 50 speakers, 650 written comments, and a petition signed by more than 450 residents. After extensive deliberation, the Commission voted 6–1 to recommend denial of the application. Chesapeake’s City Council reviewed the matter on June 17, 2025, where it voted 7–0 to reject the rezoning. Two members — Mayor Rick West and Councilmember Daniel Whitaker — were absent or recused due to scheduling and conflict of interest, respectively. The remaining Councilmembers unanimously supported the Planning Commission’s recommendation, citing concerns over location suitability, potential environmental impact, and inadequate buffering between the proposed industrial facility and nearby homes.

Councilmember Amanda Newins and others noted the importance of identifying appropriate zones for data center development while preserving the integrity of existing neighborhoods. Several members emphasized that the decision did not constitute opposition to data infrastructure broadly but reflected a commitment to thoughtful site planning and respect for public input.

This decision aligns with a broader pattern across Virginia and the nation. Communities in Loudoun County, Pittsylvania County, and York County have faced similar challenges in balancing the economic appeal of data centers with land use, environmental, and quality-of-life considerations. Chesapeake’s handling of this application illustrates the critical role that zoning, environmental due diligence, and public participation play in maintaining community trust while enabling strategic development.

Following the denial, the applicant requested that the matter be continued to allow time for further analysis and public outreach; however, Council proceeded with its vote as scheduled. The developer has since indicated that revised plans may be submitted in the future. Should a new application be filed, it is anticipated that additional technical studies and potential adjustments to site location, scale, and impact mitigation will be considered.

Chesapeake’s decision underscores the value of an engaged and informed public, a clear zoning framework, and leadership that is responsive to both innovation and preservation. The city’s process — deliberate, transparent, and aligned with planning best practices — serves as a model for other localities facing similar pressures from industrial-scale infrastructure proposals.

This matter remains active. HRCNN will continue to provide updates on any revised applications, related policy discussions, and community responses. For ongoing coverage and expert analysis on zoning, infrastructure, and responsible development in Hampton Roads, follow the latest at www.earthlyinfrastructure.com/hrcnn.