Charlottesville Settles Lawsuit On Missing Middle Housing Code

The home to the University of Virginia has ended a nightmare that left a new “missing middle” zoning code in limbo due to a legal technicality.

Charlottesville has settled a lawsuit with several homeowners who filed in January 2024, claiming the city didn’t follow proper procedure when it passed an ordinance in December 2023 that ended single-family zoning. The city, while not admitting wrongdoing, agreed to conduct traffic and infrastructure studies that the owners argued officials should have completed under state law before they approved the ordinance.

In June, a judge issued a default judgment that put the zoning code in limbo, but reversed himself in late August.

As has become common across the country, homeowners and activists continue to oppose new zoning codes intended to increase density—even modestly—by filing costly lawsuits.

In Virginia alone, Arlington County is still fighting a lawsuit filed by homeowners after the 2023 passage of a “missing middle” housing ordinance that ended single-family zoning, claiming the county didn’t conduct sufficient studies on its impact on stormwater systems, traffic, and schools. The homeowners initially won, but then lost on appeal and have since appealed to the state supreme court.

Neighboring Alexandria recently won a two-year legal battle over a sweeping zoning overhaul that eliminated single-family zoning.

With the new zoning fully in force, developers will now face other code obstacles, such as the requirement that 10% of development be affordable at 60% of area median income for 99 years.

“It’s not something that is bankable,” Charlie Armstrong, vice president at Southern Development Homes, told The Builder’s Daily. “You can’t get the underwriting to make it work.”

Missing a deadline

In line with its sister Virginia cities, Charlottesville adopted a new zoning code in December 2023 to boost residential density and expand affordable housing options by permitting multi-family units in most neighborhoods. Large areas previously reserved for single-family homes could now allow duplexes, triplexes, and small apartment buildings.

Charlottesville found itself in an unprecedented situation after the city’s third-party attorneys missed a critical filing deadline. The homeowners pounced and sought a default judgment, which Charlottesville Circuit Court Judge Claude Worrell granted on June 30.

The repeal of the old zoning ordinance, intended to make way for the new one, suddenly left the city with potentially no zoning code at all.

However, there was a wrinkle in the ruling: Worrell never signed a written order.

Nearly two weeks after the ruling, the city announced it would maintain the new code until the judge issued a formal written order. However, the city temporarily stopped reviewing zoning applications until officials established clarity, which left developers in limbo.

“It definitely created a chilling effect,” Armstrong says. “People like us sat on our hands for a while.”

Finding the path forward

Charlottesville’s attorneys kept up the legal fight, ultimately succeeding in late August in convincing the judge to revive the lawsuit. In August, Worrell reversed himself and set a trial date for September.

The city chose not to spend money fighting the lawsuit at trial and instead allocated $650,000 for traffic and infrastructure studies that homeowners argued officials should have completed before passing the ordinance.

“The cost to litigate this case is going to far exceed $650,000, if we were to go through trial, and through appeals,” City Attorney John Maddux told the council at an October 20 meeting.

Maddux said homeowners rejected the same off during the summer. The homeowners later returned to the city seeking to settle.

City officials are confident the studies will demonstrate the new code won’t have the negative impacts the homeowners claim.

The entire episode became a national cautionary tale—a rare glimpse of what happens when a city’s legal machinery fails to protect even its most basic land use rules.

Housing advocates and developers, frustrated by yet another barrier to building much-needed homes, pointed to the case as proof of how easily local reforms can be upended by technicalities and organized homeowner opposition.

The next challenge for the city will be to confront whether its affordable housing goals fall short, potentially prompting future changes to the code.

“We just want to make places for people to live,” Armstrong says. “But it has to be financially achievable.”