Background

• The conversion from the use of vehicles powered by fossil fuels to those fueled by electricity continues to intensify. Registration of electric vehicles (EV) in the United States increased sharply in the first quarter of 2022, even though overall new car registrations decreased. Record high gas prices coupled with a wider variety of models are key contributors to this increase.

• Several factors will increase the rate of growth in the use of EVs.  According to Kelly Blue Book last fall, the average cost of an EV is about $56,400, making it unaffordable for some consumers. CNBC has reported that the difference in the cost of operating an EV over a 200,000-mile life span, when compared to that of a conventional vehicle, is less than $5,000. Further, according to the U.S. Department of Energy, there are about 43,000 electric charging stations (ECS), many with multiple ports, i.e., outlets, which supply electricity to EVs via a connection to a public utility, with California alone having about one-third of them. The number of ESCs will have to increase substantially to serve the growing EV market. Further, the availability of new lithium car batteries could become an issue. While batteries used in EVs are often referred to as “lithium” batteries, their major components are nickel and cobalt.  In 2021 China produced almost 80% percent of all lithium-ion batteries that entered the global market. Russia is a major producer of nickel and cobalt. Currently there is only one lithium mine in the United States, and the largest lithium reserves in the world may be in Afghanistan.

As the use of electric vehicles increases, regardless of the rate of growth, there will be a corresponding impact on land use and development. Notably, issues relating to parking, ECSs, and EV battery recycling and disposal must be addressed, not only by municipalities, but also by developers. In August 2021, President Biden signed an Executive Order declaring that up to half of all new cars sold by 2030 must be electric. Given this, plus the fact that numerous vehicle manufacturers have already committed to making only EVs by 2035 or sooner, it is certainly not premature to begin addressing these issues now.

Municipalities – Pennsylvania

• The Municipalities Planning Code (MPC) enacted in 1968 by the Pennsylvania General Assembly has served as a blueprint for zoning ordinances adopted by cities and other municipalities throughout Pennsylvania. The MPC provides that the provisions of zoning ordinances shall be designed (i) to promote, protect and facilitate transportation and access to vehicle parking and loading space; (ii) to prevent congestion in travel and transportation; and (iii) to accommodate reasonable overall community growth, including opportunities for development of a variety of residential dwelling types and nonresidential uses. 

• The MPC contains several provisions relating to vehicle parking facilities, and accordingly, zoning ordinances often include requirements for the size and number of parking spaces for facilities such as hospitals, hotels, office buildings, schools, and shopping centers. But at this point, the MPC does not contain specific provisions relating to EV parking. Nor does MPC currently contain provisions relating to ECSs. While notably, the zoning ordinances of Pittsburgh, and to a lesser extent, Philadelphia, contain provisions relating to EVs, the zoning ordinances of many other cities and municipalities, including larger cities such as Allentown, Erie, Scranton, and Bethlehem, do not yet contain specific EV and ECS-related provisions.  But as the use of EVs increases, not only cities, but other municipalities that are home to shopping complexes, hospitals and medical office buildings, assisted living facilities, commercial and industrial parks, eating establishments, colleges and universities, townhomes and condominiums, and recreational facilities will need to amend their zoning ordinances to include such provisions.

• The following are just some of the matters that must be addressed by municipalities:

• The zoning districts in which ECSs will be a permitted use, an accessory use, or a use permitted by variance;

• Installation criteria for ECSs and EV supply equipment (EVSE), e.g., size, compliance with the Americans with Disabilities Act (“ADA”), ampere and voltage (240v vs. 480v), and retraction requirements for cords.

• Requirements for EV parking and ECSs for new private and public development projects e.g., number of ECSs per square feet or number of dwelling units, including requirements by charging level. As background, there are three levels of EV charging: Level 1, Level 2, and Level 3. Level 3 is broken into DC Fast Charging and (Tesla) Supercharging. The higher the level of charging, the faster the charging process.  A Level 3 charging station can provide a full charge in about 30 minutes.

• The location and number of ECSs in public parking facilities, including requirements by charging level;

• The dimensions and signage for parking spaces for EVs;

• The retrofitting of existing parking facilities and existing commercial, industrial, and high-density residential structures to accommodate EVSE; and

• The installation of ESCs at facilities selling gasoline and diesel fuel, such as Wawa and Scheetz.

• Further, municipalities will likely need to amend existing code requirements for buildings and building permit requirements.

Municipalities- New Jersey

• In July 2021, New Jersey amended its Municipal Land Use Law to include numerous provisions relating to EVs and EVSE that have not been addressed in Pennsylvania at the state level, including the following:

• An application for development, submitted solely for the installation of EVSE or charger-ready (“Make Ready”) parking spaces, which are considered a permitted accessory use and permitted accessory structure in all zoning or use districts of a municipality, does not require a variance.

• An application for development for the installation of electric vehicle supply equipment or Make-Ready parking spaces at existing gasoline service stations, retail establishments, and other buildings, which are not subject to site plan or other land use board review, does not require a variance, and is to be approved through the issuance of a zoning permit by the administrative officer.

• As a condition of preliminary site plan approval, for each application involving a multiple dwelling with five or more units of dwelling space, the developer or owner must meet requirements for the installation of EVSE and Make Ready parking spaces at the outset, within three years and within six years together with certain ADA-related requirements. Further, for parking lots and garages not part of multi-family dwellings, there are specified numbers of Make-Ready parking spaces based on the total number of parking spaces, including specified numbers of ADA-related parking spaces.

• The “State Uniform Construction Code Act” incorporates requirements set forth the foregoing requirements.

• A permitting application solely for the installation of electric vehicle supply equipment permitted as an accessory use is not subject to review based on parking requirements.

Municipalities – Other Considerations

• In addressing zoning issues, municipal officials will also need to take into consideration the length of charging times per level and the corresponding wait times, coupled with anxiety caused by range-phobia, the role of parking authorities in managing municipal ECSs, and the installation costs of ESCs (see below).

• Due to the increasing use of EVs, municipalities will have to address the issue of batteries. While the life of these batteries can extend for many years, ultimately, recycling and disposal will be required. Lithium batteries pose an increased fire hazard, and these fires can smolder for many years, releasing toxic chemicals into the air. In 2021, the United States Environmental Protection Agency reported that between 2013 and 2020, there were 245 lithium battery-related fires in 28 states.  This is particularly significant for less populated municipalities, which may be viewed as more attractive locations for recycling plants and disposal facilities.

• Even with the vastly expanded use of EVs, vehicles powered by gasoline and diesel fuel are likely to remain in use for many, and the need for fueling stations for these vehicles, albeit on a diminished basis, will remain. Municipalities may need to re-examine exiting ordinances regarding the use, operation, and ultimate closure of conventional fueling stations.

• Further, while the focus has been on EVs that are passenger cars, ultimately zoning ordinances, codes, and development plans will be needed to deal with electric light and heavy-duty vehicles.

Developers

While for decades, developers of residential, commercial, and industrial projects have addressed parking issues and requirements, the advent of EV and ESCs gives rise to additional issues. 

• First and perhaps foremost is the issue of costs. The level of charging has a direct impact on costs and costs are directly impacted by several factors such as the amount of EVSE, and infrastructure that must be upgraded or installed.  Level 1 ECSs are suitable for a single residential dwelling, but Level 2 and Level 3 charging are needed for commercial and industrial enterprises. The cost of installing a level 2 ECS ranges from about $2,000 to $7,000, and the cost to install a level 3 ECS can exceed $50,000. Developers will need to assess EVSE and infrastructure needs and interact with the public utility regarding installation.  Accordingly, the cost of installing ECSs can impact, perhaps substantially, the costs of construction.

• A second issue revolves around which party pays for the electricity. If, for example, the developer intends to be a residential landlord, owners of EVs who use ECSs will consume more electricity than other residents. Accordingly, developers must consider alternatives such as whether there will be one or more ECSs available to all tenants, or ECSs dedicated to specific leased properties. In addition, developers will need to consider: (i) having the developer cover the electricity cost, (ii) including the cost in common area charges, (iii) charging fixed monthly rates, or (iv) installing submeters.  

• Third, if a developer intends to create a residential or commercial condominium, the condominium documents will need to address EV-related matters. These include whether ECSs will be a “common element” and whether the cost of electricity will be included in the monthly assessment.   

Economic Programs

As noted above, the cost of installing ESCs presents challenges to both municipalities and developers. Fortunately, states including Pennsylvania and New Jersey have undertaken to address this, as follows:

• Pennsylvania’s Driving Forward Initiative Program provides grants that underwrite installation costs associated with ESCs. As with any grant programs, there are application requirements including whether the ESC will be public or private.

• The New Jersey Department of Environmental Protection provides grants through the It Pay$ to Plug In: New Jersey’s Electric Vehicle Workplace Charging Grant Program to support plug-in electric vehicle adoption and EVSE installation.

• In April 2022, PECO announced its new Level 2 EV charger rebate program. This is part of $1.5 million in EV charging infrastructure incentives to support commercial, industrial, and public transit customers interested in clean transportation options. Municipalities and developers should communicate with their electric utility regarding the possibility of obtaining a rebate.

• Developers may also wish to consider exploring more traditional economic development tools such as low-interest loans. In Pennsylvania, low interest loans include Business in Our Sites or Pennsylvania Infrastructure Bank loans or a grant under Pennsylvania’s Redevelopment Assistance Capital Program (RACP).

• If a developer is considering the use of tax increment financing to support a project, the developer should consider including EVSE expenses in the “project costs.”

• Smaller municipalities may wish to collaborate in the installation of EVSE including ESCs to spread costs. This could take various forms, such as a project under public-private legislation.

• Municipalities, particularly those located along or near an interstate highway, may ultimately benefit, at least indirectly, from the efforts of the federal government.  Recently, the U.S. Departments of Transportation and Energy announced that nearly $5 billion will be made available under the new National Electric Vehicle Infrastructure (NEVI) Formula Program established by President Biden’s Bipartisan Infrastructure Law, to build out a national electric vehicle charging network. The program will provide nearly $5 billion over five years to help states create a network of EV charging stations along designated Alternative Fuel Corridors, particularly along the Interstate Highway System.