Virginia cities gain new tools to increase affordable housing supply

For Virginia state Sen. Jeremy McPike, the third attempt was the charm for a bill that lets municipalities rezone to encourage affordable housing. It just took a new governor.

Gov. Abigail Spanberger signed into law this week a measure giving every city and county in Virginia the authority to adopt an affordable housing program, marking a major shift in how local governments can use zoning to boost supply. Previously, only a handful of Northern Virginia home rule jurisdictions had the tool.

Like many states, Virginia lawmakers have tried to ease a housing affordability crisis by lowering regulatory barriers that drive up construction costs. They also have leaned on local governments to build more affordable housing through incentives or mandates.

Running on a campaign of improved housing affordability in general helped Spanberger win the governor’s race in November. McPike told HousingWire‘s The Builder’s Daily that for the first time in a year, economic development professionals around the state have cited housing affordability challenges as a major risk for recruiting and retaining employers.

“It’s very much on the minds of the electorate,” he said.

Third time is a charm

McPike introduced the legislation in the two previous years, and it passed with bipartisan support. Former Gov. Glenn Youngkin vetoed the bills both times.

Spanberger signed the legislation along with a slew of other housing-related bills as part of her agenda to improve affordability across the state.

“Virginians deserve results when it comes to contending with the high cost of living,” the governor said in a statement.

Shortly after winning in November, she outlined an agenda focused on making housing more affordable across the state.

McPike’s legislation was paired with a companion House bill sponsored by Del. Rae Cousins that passed the General Assembly with bipartisan support earlier this year.

Spanberger is also in the final throes of deciding how to handle McPike’s other bill that, by contrast, would preempt local zoning. That bill would let faith-based organizations build affordable housing on property they own without needing zoning changes.

“On one hand, you have to get tightened up and on the other give” power to local governments to address affordability, McPike said.

McPike noted that both bills passed with bipartisan support, and that helps with the Faith in Housing bill too.

Localities gain flexible zoning tools as builders warn of higher costs

The new law authorizes localities to offer developers optional increases in density in exchange for providing moderately priced housing, a form of voluntary inclusionary zoning.

Local governments also may use a mix of tools, including lot size reductions, dimensional or form modifications, higher floor area ratios, accessory dwelling unit allowances, and the option for builders to pay into a local housing trust fund instead of constructing units on-site.

Before adopting a program, a locality must establish an advisory committee that includes residents, developers, real estate professionals, finance experts and affordable housing advocates to help design and oversee the ordinance.

The Virginia Association of Counties supported the bill, saying the stakeholder panel will “help to craft successful programs at the local level” and that the expanded authority has already proven effective in jurisdictions that currently use it. But the organization opposes the faith-based housing bill because it preempts local authority.

Environmental and smart-growth advocates also backed the bill, calling it a key part of a housing and transit agenda that aims to steer more mixed-income development to walkable, transit-served areas.

Home builders and development groups raised concerns that expanding inclusionary tools could add costs to market-rate projects or discourage construction, particularly of so-called “missing middle” housing types.

The Home Builders Association of Virginia opposed the measure during the session, arguing that mandatory or quasi-mandatory affordability requirements could function as a de facto tax on new units and slow production.