Housing Policy Implementation Toolkit

Housing Policy Implementation Toolkit: A Guide to New Local Housing Authority from Virginia’s 2026 General Assembly Session Prepared for Regional Housing Policy Convening of Local Governments September 16, 2026

Table of Contents How to use this Toolkit................................................................................................................3 About PHA.......................................................................................................................................3 Five New Tools for Local Housing Policy .............................................................................4 Expanded Inclusionary Housing Authority for Localities ...............................................5 Right of First Refusal for Local Governments in the Sale of Publicly Supported Rental Properties ......................................................................................................................... 7 Property Tax Exemption for Nonprofit-Controlled Affordable Housing.....................9 Administrative Approval for Qualifying Housing Developments................................ 11 Economic Development Authority Tools for Affordable Housing.................................13 Decision Making Tools................................................................................................................ 15 Notes..................................................................................................................................................17

02 | POLICY TOOLKIT

H ow to use this T oolkit Each policy section explains the new state authority, identifies decisions localities must make, outlines implementation requirements, and provides examples and resources. Use decision-making tools to determine which policies best match your locality’s housing needs and capacity.

This toolkit provides general policy guidance and does not constitute legal advice. Localities should consult legal counsel before adopting an ordinance or program.

A bout PHA The Partnership for Housing Affordability serves as the Richmond region’s housing policy, research, and collaboration backbone. We bring together local governments, housing providers, community organizations, philanthropy, and private-sector partners to advance practical, data-informed solutions to the region’s housing challenges.

PHA developed this toolkit to help localities translate new state authority into locally appropriate policies and measurable housing outcomes.

F ive N ew T ools for L ocal H ousing P olicy The 2026 General Assembly Session saw some of the most impactful housing bills adopted in many years, giving localities across the Commonwealth new opportunities to increase their supply of affordable housing.

HB 867 & SB 74: Expanded inclusionary housing authority for localities Establish affordable dwelling unit programs using density incentives, development flexibility, financial tools, and other locally adopted measures

HB 4: Right of First Refusal for local governments in the sale of publicly supported rental properties Preserve affordability by giving localities the first option to purchase affordable housing

HB 854: Property tax exemption for nonprofit-controlled affordable housing Allow full or partial property tax exemption for qualifying nonprofit-owned or nonprofit-controlled affordable housing

HB 594: Administrative approval for qualifying housing developments Create an administrative approval process for qualifying affordable housing developments that meet locally adopted standards.

HB 352 & HB 806: Enhanced abilities for local Economic Development Authorities to support affordable housing Expand the use of economic development authority performance grants, loans, and bond financing for affordable housing.

These new laws give localities the choice to pursue several housing strategies that work best for their specific housing needs and local conditions. This Policy Toolkit aims to help local governments understand these new laws and outlines steps toward implementation, with policy considerations, implementation steps, examples of successful programs, and additional resources.

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POLICY 1

E xpanding I nclusionary H ousing A uthority for L ocalities HB 867 & SB 74 | § 15.2-2304 Code of Virginia | Effective July 1, 2027 Lead Department: Planning and Housing | Implementation Difficulty: Medium Virginia Law Authorizes: • Localities to create policies that provide housing developers with incentives in exchange for inclusion of affordable housing units Virginia Law Requires: • Creation of an advisory committee that actively seeks input from residents and key stakeholder groups prior to adoption Potential Benefits: • Increased affordable housing production • Mixed-income housing • Lowered cost of development for affordable housing • Additional participation of for-profit developers in affordable housing Key Decisions: • Available incentives • Qualifying development types • Minimum project size • Housing type: rental, homeownership, or both • Target income levels

• • • •

Percentage of affordable units Affordability restriction period On-site, off-site, and in-lieu options Monitoring and enforcement

Important Considerations: • Developer interest Will developers utilize these incentives?

• Cost to the locality Do any of these incentives have budgetary implications?

• Administrative complexity How will staff administer the program and monitor participating developments?

• Impact on development pipeline How will these inclusionary housing programs impact other developments?

NOTE: Inclusionary housing policies can also be called “inclusionary zoning”, “incentive zoning”, “affordable dwelling units”, or other terms. These all refer to programs that provide development incentives in exchange for some contribution of affordable housing.

Implementation Steps: 1: Assess & Consult • Introduce legislation to create an advisory committee and process to explore inclusionary housing policies • Consult with residents, the development community, and other affordable housing stakeholders through committee and public engagement 2: Test Feasibility • Test the effectiveness and feasibility of incentives and the development of maximum affordable housing units 3: Establish Standards & Draft Ordinance • Outline application process and procedures for providing incentives to qualifying developments • Draft ordinance to include incentives offered, qualifying developments, and affordability restrictions 4: Adopt & Prepare Procedures • Implement internal compliance and monitoring systems to confirm affordability and program requirements for participating developments 5: Launch, Monitor, & Refine • Publish application process and monitor properties for compliance at regular intervals • Continue to refine and adopt policy specifications depending on program utilization, community needs, and developer interest Example in Practice: Fairfax County Fairfax County’s program requires large developments in high density areas to include between 5 to 12.5% of units as affordable. In exchange, the development receives density bonuses of up to 20% corresponding to the number of affordable units. Fairfax’s program, which dates back to the 1990s, has created over 1,200 affordable rental units and 1,400 affordable homeownership units. Critically, the program includes an ADU Task Force, which is a group of stakeholders charged with monitoring the program and suggesting reforms as necessary.

Scan QR code to read the bill language and explore additional resources 06 | POLICY TOOLKIT

POLICY 2

R ight of F irst R efusal for L ocal G overnments in the S ale of P ublicly S upported R ental P roperties HB 4 | § 36-176 Code of Virginia | Effective July 1, 2026 Lead Department: Housing | Implementation Difficulty: High Virginia Law Authorizes: • Localities to establish a right of first refusal (ROFR) during the sale of any multifamily rental housing of 10 units or more which has an affordability restriction through state and federal assistance programs • Assignment of the ROFR to a qualified designee, which could be a housing provider, public housing authority, or tenants association Virginia Law Requires: • The locality or qualified designee to make a matching offer within 30 days from notification of acceptance of third-party offer to purchase a qualifying property Potential Benefits: • Preservation of existing affordable housing • Displacement prevention Key Decisions: • Qualifying property inventory process • Form and delivery of required notices • Qualified designee criteria and assignment procedure • Acquisition process

• • • •

Standards for affordability preservation Capital sources Tenant communication and coordination Verification and enforcement procedures

Important Considerations: • Financial capacity Are there funds that can be used to exercise the ROFR within the 30-day timeframe?

• Locality staffing Is there staff capacity to monitor and act on properties subject to ROFR? • Impact on new development Will the ROFR impact new development interest?

NOTE: Another new law (HB375) from the 2026 General Assembly gives residents and localities the first right of refusal in the sale of manufactured housing communities. This right does not require adoption of an ordinance but should be considered in the development of a ROFR policy for publicly supported housing.

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Implementation Steps: 1: Adopt ordinance enabling locality to obtain first right of refusal 2: Identify subject properties 3: File notices for subject properties in official land records 4: Outline process by which the locality identifies housing developers or providers as qualified designees 5: Explore capital sources which could support acquisition of properties subject to ROFR Right of First Refusal Action Timeline:

ROFR 30-Day Readiness Checklist: Affordability-expiration dates tracked Qualifying properties identified ROFR recorded in land records Notice forms prepared Qualified designees prequalified

Tenant communication protocol established Acquisition decision authority established Purchase and preservation capital identified Transaction counsel available

Example in Practice: Prince George’s County, Maryland Prince George’s County adopted a Right of First Refusal policy in 2013 that gives the county the option to match offers for multifamily rental properties consisting of 20 or more residential units. Since 2020, the County has preserved 2,691 housing units. The County supports their ROFR policy with a ROFR Preservation Fund that has been funded with $25m over the course of the past 5 years. Finally, the County maintains a list of developers with an interest and the demonstrated capacity to assume acquisition rights, increasing capacity to preserve units through the ROFR.

Scan QR code to read the bill language and explore additional resources

POLICY 3

P roperty T ax E xemption of N onprofit C ontrolled A ffordable H ousing HB 854 | § 58.1-3603 and 58.1-3651 Code of Virginia | Effective July 1, 2026 Lead Department: Housing and Real Estate Assessment | Implementation Difficulty: Low Virginia Law Authorizes: • Localities to grant full or partial real estate tax exemption to providers of affordable housing, which qualifies as a “charitable” or “benevolent” purpose • The exemption to apply to an ownership entity with for-profit interests when one or more nonprofit organizations directly or indirectly hold a controlling interest in the entity’s managing member or general partner Potential Benefits: • Reduced costs to provide affordable housing • Expanded capacity of affordable housing developers Key Decisions: • Classification or designation for qualifying properties • Eligible housing types • Income limits • Full or partial exemption • Exemption duration

• • • • •

Treatment of mixed-use properties Application requirements Annual certification process Change-of-control procedures Termination or recapture for noncompliance

Important Considerations: • Fiscal impact What would be the loss of revenue and how would it impact the budget?

• Assessment complexity How difficult would these exemptions be to implement in the tax assessment process?

Implementation Steps: 1: Assess financial capacity to offer partial or full tax exemptions for qualifying properties and adopt ordinance 2: Create application process for qualifying properties and outline formula to calculate exemption amount 3: Draft contracts to ensure compliance with affordability requirements and outline processes to provide exemptions 4: Work with the tax assessor to appropriately identify applicable properties during annual assessment process 5: Set up compliance and monitoring systems for participating properties

Example in Practice: Atlanta Private Enterprise Agreement The Private Enterprise Agreement program is operated by the Atlanta Urban Development Corporation (AUDC), a quasi-governmental entity, and provides property tax incentives to affordable and workforce housing up to 140% AMI. The AUDC maintains an ownership stake in the development through a ground lease. In exchange for a full property tax exemption, developments are required to reserve 20% of units at 50% AMI, 10% of units at 80% AMI, and the remainder cannot exceed 140% AMI. Note, Georgia law may allow for different capabilities than authorized in HB854 and Virginia state code.

Tax Exemption Ordinance Drafting Checklist: Specification of qualifying housing providers Formula for calculating exemption amount Target income levels Process for certifying exemption with assessor’s office Compliance requirements Penalties for noncompliance

Scan QR code to read the bill language and explore additional resources

10 | POLICY TOOLKIT

POLICY 4

A dministrative A pproval for Q ualify ing H ousing D evelopments HB 594 | § 15.2-2292.3 Code of Virginia | Effective July 1, 2026 Lead Department: Planning | Implementation Difficulty: Medium

Virginia Law Authorizes: • Localities to administratively approve rezoning applications for affordable housing developments Virginia Law Requires: • Developments qualifying for administratively approved rezonings must: Have at least 75% of units qualify as affordable housing (100% AMI or below) Comply with Virginia Fair Housing Law Connect to public or community water supply or sewage system Be within or adjacent to an area identified as one that could support increased density development and provide access to services • The ordinance for administrative approval of affordable units must include provisions specifying: Minimum number of units per acre Maximum lot-size requirements Height requirements • Annual reporting to the state DHCD for priority consideration for certain grants or loans

Potential Benefits: • Reduced timelines for building affordable housing • Cost savings for affordable housing developers

Key Decisions: • How to identify eligible areas • Minimum number of units per acre • Maximum lot size • Height requirements • Affordability terms

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• Application requirements and procedures • Administrative approval process and timeframe • Appeals and enforcement

Important Considerations: • Qualifying development size What is the minimum density, maximum lot size, and height requirement for qualifying developments?

• Identification of eligible areas How are “areas that could support increased density” identified?

• Community sentiments How will community members respond to rezoning processes conducted administratively?

Implementation Steps: 1: Identify potential eligible areas 2: Evaluate infrastructure and access to services 3: Establish objective development standards 4: Draft the ordinance, application, and review checklist 5: Complete statutory requirements to advertise the proposed ordinance twice 28 days before vote 6: Train review departments 7: Publish standards, maps showing eligible areas, and application materials 8: Report annually to the governing body and DHCD as applicable Administrative Approval Flowchart:

Example in Practice: California SB 35 - Streamlined Approval for Infill Multifamily Affordable Housing Senate Bill 35 was passed in 2017 in California allowing qualified multifamily infill projects to go through a simplified and expedited approval process in jurisdictions that are not on track to meet their housing production goals, as set by state mandates in CA. In exchange, developments were required to set aside a certain number of units as affordable. After five years, the process had facilitated the creation of over 18,000 new proposed housing units across the state, with most being in 100% affordable developments.

Scan QR code to read the bill language and explore additional resources

POLICY 5

E conomic D evelopment A uthority T ools for A ffordable H ousing HB 352: Affordable Housing Performance Grant Programs § 15.2-958.4:1 Code of Virginia | Effective July 1, 2026 Lead Department: Economic Development | Implementation Difficulty: Low HB 806: Bond Issuance and Lending for Affordable Housing § 15.2-4901 Code of Virginia | Effective July 1, 2026 Lead Department: Economic Development | Implementation Difficulty: Medium Virginia Law Authorizes: • HB 352: Affordable Housing Performance Grant Programs Allows local Economic Development Authorities (EDAs) to establish affordable housing performance grant programs by ordinance and administratively approve applications • HB 806: Bond Issuance and Lending for Affordable Housing Confirms the abilities of EDAs to provide loans and issue bonds for the development of affordable housing, and extends this ability to EDAs in localities that have public housing authorities

Potential Benefits: • Increased coordination between economic development and affordable housing • Additional financial tools for affordable housing developers Key Decisions: • Housing product types served • Eligible applicants and projects • Target income levels and affordability periods • Funding sources • Subsidy calculations

• • • •

Process for approving grants, loans, or bonds Loan underwriting duties Compliance and monitoring responsibilities Default and recapture guardrails

Important Considerations: • Financial capacity Can the locality and its EDA adequately fund and support additional programs or financing?

• Cross-departmental collaboration Do the EDA and other relevant departments have shared processes and knowledge to administer these programs?

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Implementation Steps: 1: Assess financial capacity for bond issuance, lending, and performance grant 2: Consult with affordable developers to understand financial and programmatic needs 3: Coordinate with housing department staff to outline program qualifications and compliance processes 4: Draft legal documentation and application materials (if applicable) 5: Adopt ordinances as necessary to implement programs

Examples in Practice: Richmond Affordable Housing Performance Grant (AHPG) Program Richmond’s performance grant program provides full or partial real estate tax abatements for qualifying housing developments. The value of the tax abatement is calculated based on the percentage of units in the development which are affordable to households earning 50% AMI or 80% AMI. Since its inception in 2023, the AHPG has facilitated the creation of over 3,200 affordable housing units across 25 developments.

Henrico County EDA Support for the Glenwood Farms Redevelopment Henrico County has utilized its EDA to issue bonds and provide an $11 million loan for the redevelopment of Glenwood Farms, a 294-unit apartment complex which had faced persistent neglect from previous owners. The financing from the EDA will enable a phased redevelopment of the property into 913 homes in a mix of townhomes, apartments, and age-restricted units.

NOTE: Conduit bond financing allows an EDA to facilitate a transaction without making the locality responsible for repayment, provided the financing is structured and documented appropriately.

Scan QR code to read the bill language and explore additional resources

14 | POLICY TOOKIT

Score each policy from 1 (least favorable) to 5 (most favorable) for every criterion. A policy should not advance if a critical legal, fiscal, staffing, or compliance prerequisite remains unresolved, regardless of its total score.

Use this matrix to better understand the overall feasibility and impact of the policies outlined in this toolkit.

Policy Scoring Matrix

D ecision M aking T ools

R = Responsible | A = Accountable | C = Consulted | I = Informed

Use this matrix to outline which departments would be involved in implementing and administering these new policies. For each policy, identify the department that is responsible, accountable, consulted, or informed.

Cross-Departmental Requirements Matrix

D ecision M aking T ools

N otes :

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18 | POLICY TOOLKIT

PARTNERSHIP FOR HOUSING AFFORDABILITY | 19

Partnership for Housing Affordability

8975 Three Chopt Rd., Richmond, VA 23229 www.pharva.com

Jovan Burton

Executive Director jburton@pharva.com 804.422.5057

Woody Rogers

Policy Director wrogers@pharva.com 804.422.5067