2025 General Assembly Session: Governor Signs HBAV’s Housing Bills and Other Highlights

With home prices and rents near record highs and supply at historic lows, every region of the Commonwealth is facing a dire housing crisis. The solution is clear – Virginia needs more housing.

During the 2025 Session, the Home Builders Association of Virginia advanced legislation to do just that – build more housing, faster. The bills we introduced and supported were signed by Governor Glenn Youngkin in late March and will streamline local permitting, reduce regulatory delays, expand access to capital for land acquisition and construction, and lower development costs that drive up housing costs. 

When the General Assembly passes legislation impacting housing and land development, localities are responsible for implementing those changes by July 1. Across the state, local elected officials, planning commissions, and local government staff are starting to draft ordinances and policies to meet the new state requirements.  Their work will determine how HBAV’s legislation is applied in the field.

This is a key time for the industry and our members to engage their local officials. We need our members to highlight how these policies will benefit the community, provide technical expertise, help prepare or review draft ordinances, and attend public hearings to show industry support. Contact HBAV’s Andrew Clark for more information on how you can get involved in your locality.

The Virginia General Assembly concluded its 2025 Session on February 22, after debating nearly two thousand bills and numerous amendments to the state’s two-year budget. Despite a historic winter storm that flooded the capital city’s water treatment facility—leaving nearly 230,000 residents without clean water for several days and delaying the start of Session—the legislature completed the 46-day “short session” on time.

• 1,994 bills introduced
• 231 bills (12% of all introduced legislation) affecting the residential land development and construction industry
• 916 (46%) bills passed both chambers and were sent to the Governor
• By the March 24 deadline, the Governor had signed 599 bills, amended 159, and vetoed 157
• He returned the budget bill with 205 amendments and eight line-item vetoes

Our legislative team crafted over a dozen bills aimed at lowering development and construction costs, streamlining local plan reviews, accelerating housing production, expanding innovative financing tools, and more. Our primary goal through this: to Build More Housing, Faster.

To accomplish that, HBAV worked to streamline the site plan and subdivision plat review process by introducing SB 974 (VanValkenburg/Coyner) and HB 2660 (Simon/Owen). Here’s where things stand after the Governor’s signatures.

SB 974 removes local planning commissions and governing bodies from the plat and plan review process, shifting to purely administrative approvals based on clear, objective standards and ordinance requirements. This bill enables developers to better predict project timelines by removing the unpredictability of planning commission reviews, which can be swayed by community or political pressures, delay projects, and are often used to seek concessions from developers beyond what is required by ordinance.

HB 2660 includes three targeted reforms to streamline the review of preliminary and final site plans and subdivision plats: Faster Review Times, Accountability, and a clarification to the Code of Virginia.

Accelerates deadlines for processing preliminary and final site plans and subdivision plats – reducing overall review timelines by up to 135 days. Faster review times help reduce carrying costs for developers and accelerate the delivery of new housing to the market.

Enhances accountability by requiring  automatic escalation to the planning director or staff supervisor after a third resubmission – ensuring higher-level oversight over project reviews, reducing back-and-forth over staff comments, and giving developers an opportunity to resolve The director must act within 14 days to approve, disapprove with specific reasons, or allow minor corrections for administrative approval within seven days.

The Code of Virginia outlines review procedures for plats and plans, but its complexity leads to inconsistent application across localities and challenges for developers navigating the process. HB 2660 establishes a stakeholder workgroup to develop amendments to §15.2‑2259 and §15.2‑2260 aimed at clarifying processes, standardizing terminology, and eliminating redundancies. The goal is to create a logical, user-friendly Code that reduces ambiguity, promotes consistent review practices, and provides localities and developers with predictability.

Because of the signing of SB974 and HB2660, timelines for site and subdivision development will speed up in Virginia starting July 1. Here’s how:

Localities must act on any submitted plat, plan, or plan of development for residential or commercial use within 40 days.(§ 15.2‑2259(A)(3))

Localities must act on resubmitted plats, plans, or plans of development within 30 days. (§ 15.2‑2259(A)(3))

A locality’s designated agent may consult local reviewing agencies and administratively approve resubmitted plats and plans. (§ 15.2‑2259(A)(3))

Localities must forward any plat or plan requiring state agency approval to the appropriate agency within 5 business days. (§ 15.2‑2259(A)(1) and (A)(3))

State agencies reviewing final plats must complete their review within 30 days for both first submissions and resubmissions. (§ 15.2‑2259(B))

Upon receiving state agency approvals, localities must act on a plat within 20 days. (§ 15.2‑2259(B))

Localities must act on a preliminary plat within 45 days of submission. (§15.2‑2260(A))

Localities must forward any preliminary plat or plan requiring state agency approval to the appropriate agency within 5 business days. (§15.2‑2260(A))

State agencies reviewing preliminary plats must complete their reviews within 30 days for both initial submissions and resubmissions. (§ 15.2‑2260(B))

Localities must act within 20 days of state agency approval of a preliminary plat. (§ 15.2‑2260(B))

Localities must act on resubmitted plats, plans, or plans of development within 30 days. (§ 15.2‑2260(C))

If a plat is disapproved, localities must (i) Specify all deficiencies that caused the disapproval, (ii) cite specific ordinances, regulations, or policies that justify the denial, and (iii) identify necessary corrections or modifications for approval. (§ 15.2‑2260(A) and (C))

SB 1263 (Bagby) allows localities to reimburse developers for water and sewer connection fees, capital recovery charges, and availability fees tied to new residential development. This bill resolves conflicting legal interpretations that have stopped some localities from using connection fee reimbursements to spur new development.

Water and sewer connection fees—one-time charges developers pay to connect new housing units to public water and wastewater systems—have steadily risen over the years. In 2023, the average fee for a single-family home in Virginia reached $12,000, with some localities charging up to $46,000 per home. Multi-family developments often face higher fees, like $37,000 per unit in Hanover County and $13,950 per unit in Stafford County.

HB 1707 by Del. Bulova and SB 1059 by Sen. T. Travis Hackworth (R-Tazewell) increase the contractor recovery fund from $20,000 to $30,000 per claim. The bills raise the project limit thresholds for A, B, and C contractor licenses, which have not increased in 15 years.

• Tax Assessment Practices for Affordable Housing: HB 2245 (Callsen, D-Charlottesville) resolves widespread misinterpretations by local assessors that have led to significant, unexpected property tax increases for affordable housing developments statewide.
• Virginia Housing Opportunity Tax Credit: HB 1701 extends and expands the Virginia Housing Opportunity Tax Credit (HOTC), a key financing tool for new affordable housing developments. Established in 2020 through HBA of Virginia-led legislation, the HOTC incentivizes private equity investment into affordable housing projects across Virginia. Set to expire in 2025, HB 1701 secures a five-year extension and increases the program’s multi-year cap from $255 million to $595 million – further closing financing gaps and helping the industry bring new units to the market.
• Historic Tax Credits: HBAV Protected the Virginia Historic Rehabilitation Tax Credit (HRTC) from proposals to cap or eliminate the program. The HRTC has been Virginia’ most effective economic and community development incentive, creating jobs and attracting residential investment to communities across the state.

HBAV’s legislative team defeated bills that would have increased development costs, restricted housing supply, raised housing prices, or imposed unnecessary regulatory burdens on the residential land development and construction industry. Among them:

SB 1136 (Boysko) and HB 2175 (Clark) would have allowed localities to enact rent control ordinances, limiting annual rent increases to no more than 3% and requiring landlords to provide at least two month’s notice before raising rent.

HB 2781 (Henson) and SB 1313 (McPike) would have allowed all localities to restrict sales prices and rents for a certain percentage of units within every new development. These policies – known as “affordable dwelling unit ordinances” or “inclusionary zoning” – have proven ineffective at addressing housing shortages or reducing costs. Research conducted across the country reveals that these policies drive up prices for market-rate homes and slow overall housing production.

HB 2683 (Oates) would have allowed nearly every locality to impose transportation impact fees on new residential development projects. Like cash proffers, impact fees are one-time, per-unit charges applied to each home or unit in a new development. Research shows that impact fees disproportionately burden renters and first-time homebuyers and exacerbate housing affordability issues.

Stafford County is currently the only locality in Virginia that imposes this “new home tax” and recently voted to expand it to office development ($9,142.50 – $11,584 per 1,000 sq. ft.), retail development ($14,227 – $18,090 per 1,000 sq. ft.), and industrial development ($4,655.50–$5,899 per 1,000 sq. ft.)

HB 1827 and SB 1254 would have allowed localities to include environmental justice strategies and social determinants of health data in their Comprehensive Plans. Although often considered advisory, development plans are routinely used to approve or deny rezoning applications. These bills would have expanded the already broad and subjective scope of Comprehensive Plans, making project reviews less predictable.

Contact Andrew Clark by email ([email protected]) or by phone (804-643-2797 x3)