Housing projects; JLARC to study zoning restrictions and permitting and approval processes.

Directing the Joint Legislative Audit and Review Commission to study local zoning ordinances and permitting and approval processes for housing projects. Report.

WHEREAS, residents of the Commonwealth face a housing shortage, with a significant lack of affordable housing units for purchase or rent, and while much of the land zoned for residential development in the Commonwealth is approved for the construction of single-family homes, such homes often come with a much higher price tag than a home in a multi-family unit, including townhomes, row homes, or apartment complexes; and

WHEREAS, a recent report released by HousingForward Virginia and the National Zoning Atlas revealed that only five percent of zoned residential land in the Commonwealth allows apartment complexes by right without special exception permits; and

WHEREAS, inclusionary zoning programs encourage below-market rate units in new housing developments in exchange for significant developer incentives; and

WHEREAS, the Code of Virginia provides for mandatory inclusionary zoning programs to be adopted by ordinance in only six localities, including the Cities of Alexandria, Charlottesville, Fairfax, and Falls Church and Albemarle and Loudoun Counties, where in all new housing developments affordable housing unit set-asides are required; and

WHEREAS, voluntary inclusionary zoning is available to all other localities in the Commonwealth, where such localities may only require affordable housing unit set-asides if a developer requests a land-use exemption, including re-zonings and special use permits; and

WHEREAS, zoning ordinances with minimum lot sizes, strict restrictions or bans on multi-family dwellings, and lengthy permitting and approval processes discourage developers from seeking permits to develop housing that may be more affordable for renters or families with lower incomes; and

WHEREAS, a comprehensive evaluation of the impact of local zoning laws and the permitting and project approval processes are necessary to determine how the Commonwealth can best address an overall increase in housing needs and support an increase in production of affordable housing for residents; now, therefore, be it

RESOLVED by the House of Delegates, the Senate concurring, That the Joint Legislative Audit and Review Commission be directed to study local zoning ordinances and permitting and approval processes for housing projects.

In conducting its study, the Joint Legislative Audit and Review Commission shall (i) evaluate previously conducted studies on housing needs in the Commonwealth to determine where statutory requirements have provided incentives to localities and developers to increase the number of affordable housing projects and where gaps in statutory language still exist that could be amended to allow for or incentivize increased housing production to meet community needs; (ii) evaluate specific zoning restrictions in localities across the Commonwealth and determine where such restrictions are concentrated in comparison to locations where the greatest need for additional housing is identified; (iii) assess the correlation between restrictive zoning, stricter, more convoluted permitting processes, a lower housing supply, and increased costs; (iv) examine the impact of streamlined permitting processes with expedited reviews and approval times on the number of multi-family housing project proposals submitted by developers; and (v) provide recommendations to address regulations, ordinances, and processes that inhibit the approval and construction of multi-family or smaller square-footage housing projects in order to improve access to more affordable housing for residents of the Commonwealth, including any suggested actions requiring legislation.

Technical assistance shall be provided to the Joint Legislative Audit and Review Commission by the Virginia Housing Commission and the Department of Housing and Community Development. All agencies of the Commonwealth shall provide assistance to the Joint Legislative Audit and Review Commission for this study, upon request.

The Joint Legislative Audit and Review Commission shall complete its meetings by November 30, 2026, and the chair shall submit to the Division of Legislative Automated Systems an executive summary of its findings and recommendations no later than the first day of the 2027 Regular Session of the General Assembly. The executive summary shall state whether the Joint Legislative Audit and Review Commission intends to submit to the General Assembly and the Governor a report of its findings and recommendations for publication as a House or Senate document. The executive summary and report shall be submitted as provided in the procedures of the Division of Legislative Automated Systems for the processing of legislative documents and reports and shall be posted on the General Assembly's website.