On April 30, 2026, Gov. Abigail Spanberger signed into law Senate Bill 388, the “Faith in Housing Act,” which eliminates the rezoning requirement for affordable housing development on property owned by religious organizations and certain tax-exempt nonprofit organizations. Under the law, which takes effect Jan. 1, 2027, qualifying developments may proceed by right, meaning localities may not require a special exception, a special use permit, a conditional use permit, rezoning or other discretionary review or approval as a precondition to development. The law includes a sunset provision, expiring on Jan. 1, 2031, unless reenacted by a future General Assembly.
To qualify for by-right treatment, a project must satisfy several conditions, including:
- The property must have been owned by the religious or nonprofit organization for at least five years prior to commencing the development process.
- At least 60% of units must be designated as affordable housing — defined as available to households earning up to 80% of the area median income (AMI) for rental units, or up to 120% of AMI for for-sale units.
- Affordability restrictions must remain in place for a minimum of 30 years.
- At least 70% of the development’s square footage must be residential; the remaining 30% may support uses ancillary to the organization’s mission (e.g., worship space, childcare, health clinics).
- The property must be served by existing public water and sewer infrastructure within 500 feet.
- Building height is capped at 45 feet, or the height of the tallest by-right building within 500 feet, whichever is greater.
- Projects remain subject to local environmental, historic and archaeological standards.
- Developments are not on properties adjacent to active industrial uses or within certain military air installation compatibility zones.
- All housing built under this law is subject to local real property taxation upon completion, unless the locality explicitly grants an exemption.
The law also encourages — but does not mandate — that localities adopt higher minimum residential densities for qualifying properties within revitalization or transit-oriented areas. Importantly, while the rezoning step is removed, developments remain subject to all other applicable local administrative approvals, including site plan review, design standards and building permits.
To discuss this new legislation, contact the authors or a member of the Real Estate Transactions Practice Group.