Virginia's Faith in Housing Act: What Real Estate Professionals Need to Know

Summary — On April 22, 2026, Governor Abigail Spanberger signed Senate Bill 388 (the "Faith in Housing Act"), preempting local zoning authority to allow by-right development of affordable housing on property owned by religious organizations and certain tax-exempt nonprofit organizations. 

The law, which takes effect January 1, 2027, and sunsets on January 1, 2031, allows qualifying developments to proceed by right, meaning localities may not require legislative or discretionary approval as a precondition to development. The Faith in Housing Act marks a notable change in Virginia land use policy, opening properties that have historically been underutilized for housing while raising important questions about local implementation that remain unanswered as the effective date approaches.

Background and Legislative History

The Faith in Housing Act grew out of the "Yes in God's Backyard" (YIGBY) movement, a national effort to unlock surplus land owned by religious congregations for affordable housing production. Virginia is estimated to be short more than 300,000 homes, and proponents of the legislation argued that faith-owned properties represent an untapped resource for addressing the housing shortage. 

The legislation was introduced as SB 388 by Senator Jeremy McPike (D-Prince William) and HB 1279 by Delegate Joshua Cole (D-Fredericksburg) during the 2026 General Assembly session. After passing the House and the Senate, the Governor offered technical amendments that were approved and signed in to law. 

How the Law Works: Eligibility Requirements

The Faith in Housing Act establishes a series of threshold conditions that a development must satisfy in order to qualify for by-right treatment. Developers partnering with eligible organizations should pay close attention to each of these requirements:

• Property Ownership. The property must be owned continuously by a property tax-exempt religious organization or a 501(c)(3) property tax-exempt nonprofit organization for at least 5 years prior to the submission of development plans. 
• Affordability Requirements. At least 60% of the development's total housing 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. 
• Land Use Mix. At least 70% of the development's gross floor area must be residential. 
• Infrastructure. The property must be served by or within an area planned for public water and sewer infrastructure.
• Exclusions: The law does not apply to: 
  • Property zoned for, or adjacent to land zoned for industrial uses. 
  • Developments in certain military air installation compatibility zones. 
  • Existing permits approved before January 1, 2027, or to applications for rezoning, special exceptions, or special use permits submitted before July 1, 2026. 
• Taxation. All housing built under the Faith in Housing Act is subject to local real property taxation upon completion, unless the locality explicitly grants an exemption. 
• Housing Nondiscrimination. Any housing must be open to the general public and follow nondiscrimination rules as provided by the Virginia Fair Housing Law (§ 367-096.1). 
   

What the Law Overrides: More Than Just the Use Restriction

The Faith in Housing Act does not merely allow multifamily housing as a permitted use on qualifying properties. It goes further, establishing minimum development intensity standards that supersede the underlying zoning district regulations imposed by the locality.

Under the Faith in Housing Act, the local zoning would be preempted in the following ways:

• Height. The statute mandates that local ordinances allow building heights of at least 45 feet, or the height of the tallest by-right building within 500 feet of the property, whichever is greater. 
• Density. The law requires that local ordinances permit a minimum of 20 units per acre, or the most intensive existing residential unit density within 500 feet, whichever is greater. 
• Parking. Parking requirements are capped at no more than one space per residential unit, regardless of what the local ordinance would otherwise require. 
• Setback. The statute mandates that local ordinances allow setbacks of 10 feet or the smallest setback allowed for any existing property within 500 feet. The locality’s 25-foot building setback would not apply. 
   

What Local Standards Still Apply

While the law overrides use restrictions and establishes minimum height, density, parking, and setback standards, it does not eliminate all local oversight. Developments remain subject to all other applicable local administrative approvals, including site plan review, building permits, and applicable design standards. Projects must also comply with applicable local environmental, historic, and archaeological review standards. 

Key Uncertainties. Despite the legislation's detail, several significant questions remain unresolved as the January 1, 2027, effective date approaches.

• Local Ordinance Adoption. The law requires localities to adopt ordinances consistent with its provisions, but does not prescribe a specific timeline or detailed framework for doing so. Many localities will be working between now and January 2027 to draft and adopt these implementing ordinances, and the substance of those ordinances—including how localities define key terms, structure their administrative review processes, and exercise whatever discretion the statute allows—will affect the development landscape on a jurisdiction-by-jurisdiction basis.
• Vested Rights and the Sunset. The law expires on January 1, 2031, unless reenacted by a future General Assembly. This four-year window creates inherent uncertainty for projects with longer development timelines. The practical implications of the sunset provision merit careful consideration particularly for projects that are entitled but not yet constructed when the law expires.  
   

Implications for the Development Community

The Faith in Housing Act creates a new category of development opportunities in Virginia. For developers experienced in affordable housing, the law opens a pipeline of potential sites where multifamily housing may now proceed without the cost, delay, and uncertainty of the legislative approval process. For faith-based and nonprofit organizations, the law provides a vehicle to leverage underutilized land assets in support of their missions while generating property tax revenue for their localities.

At the same time, the practical success of the Faith in Housing Act will depend heavily on local implementation. Developers considering projects under this law should closely monitor ordinance adoption in their target jurisdictions. The four-year sunset also adds urgency to development planning, particularly for opportunities that may have longer lead times.

We will continue to monitor developments as localities begin adopting their implementing ordinances and as the January 1, 2027, effective date approaches.