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2023 SESSION
23104261DBe it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding in Title 36 a chapter numbered 13, consisting of sections numbered 36-177 through 36-182, as follows:
§ 36-177. Definitions.
As used in this chapter, unless the context requires a different meaning:
"Accessory dwelling unit" means a self-contained residential dwelling unit located on the same lot as a stand-alone or detached single-family home.
"Affordable housing" means a dwelling for which the rent is no greater than 30 percent of the total household income of a household earning 80 percent of the area median income and that is held available for persons or families that have a household income no greater than 80 percent of the area median income.
"By-right development" means land that may be developed without applying for a zoning variance.
"Department" means the Department of Housing and Community Development.
"Fund" means the Zoning for Housing Production Fund created pursuant to § 36-179.
"Mixed-income community" means a development that includes residential dwelling units that are affordable to persons and families with a range of income levels.
"Moderately priced housing" means housing for which the rent is no more than 30 percent of the income of a tenant whose income is no greater than the area median income.
"Multifamily housing" means residential buildings consisting of more than one self-contained dwelling unit, including duplexes, triplexes, and quadriplexes.
"Single-family housing" means a dwelling consisting of only one self-contained residential unit.
§ 36-178. Powers and duties of the Department.
A. The Department shall administer this chapter and shall have the following powers and duties:
1. Create an application form and develop an application scoring matrix that assigns each application for a grant from the Fund points based on the extent to which the application addresses the grant criteria described in § 36-180 to determine the distribution, duration, and termination of awards from the Fund;
2. Determine a minimum and a maximum grant award amount to be awarded to successful applicants prior to accepting applications;
3. Establish a time period, of no less than 30 days, during which applications for grants from the Fund will be accepted on an annual basis;
4. Review each application received and request any additional information that it deems necessary to evaluate the application within 90 days of the last date designated for localities to submit an application;
5. Grant awards to localities from the Fund based on the points assigned to each application according to the scoring matrix;
6. Collect and keep record of the actual number of affordable housing units developed in localities that receive a grant from the Fund and projections made by such locality during the application process;
7. Seek independent analytical assistance from outside consultants, as necessary, including post-grant assessments and reviews to evaluate the results and outcomes of grants awarded pursuant to this chapter; and
8. Report to the Governor and the General Assembly, no later than December 1 of each year, the information described in subsection B.
B. The annual report submitted by the Department to the Governor and the General Assembly pursuant to subsection A shall include the following information:
1. The number of applicants for a grant from the Fund;
2. The number and dollar amounts of grants awarded;
3. The projected number of housing units to be created in each locality awarded a grant from the Fund and the actual number of housing units developed in each locality from the use of such grant;
4. Any legislative recommendations relevant to the provisions of this chapter; and
5. Any other information deemed by the Department to be relevant and useful to the Governor and General Assembly in assessing such report.
§ 36-179. Zoning for Housing Production Fund.
A. There is hereby created in the state treasury a special nonreverting fund to be known as the Zoning for Housing Production Fund, hereafter referred to as "the Fund." The Fund shall be established on the books of the Comptroller. All moneys appropriated by the General Assembly for the Fund, and from any other sources, public or private, shall be paid into the state treasury and credited to the Fund. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, included interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. Expenditures and disbursements from the Fund shall be made by the State Treasurer on warrants issued by the Comptroller upon written request signed by Director of the Department.
B. Moneys in the Fund shall be used to encourage localities to adopt flexible zoning policies that promote a full range of housing choices, create mixed-income neighborhoods, and encourage the construction and continued existence of affordable housing and moderately priced housing in the Commonwealth. Specifically, the Fund shall be used to make grant awards to cities, counties, and towns that adopt changes to their existing zoning policies to allow for by-right development that is expected to further the goals listed in this subsection.
§ 36-180. Application process; award of grants to localities.
A. To qualify for receipt of a grant from the Fund, a locality shall make at least one of the following changes to its zoning ordinances:
1. Allow by-right development of multifamily housing in zones designated for single-family residential use;
2. Reduce lot size requirements or allow for the division of existing lots;
3. Allow for the construction of accessory dwelling units in single-family zones that can be legally inhabited by individuals who are not relatives of the primary homeowner;
4. Implement or expand affordable dwelling unit policies under § 15.2-2304 or § 15.2-2305; or
5. Allow lower-cost home construction alternatives, such as modular, 3-D printed, and pre-fabricated housing.
B. The Department shall establish guidelines and procedures for the award and distribution of grants from the Fund to localities, which shall include the following requirements:
1. The Department shall award grants from the Fund for zoning activities that (i) promote mixed-income communities; (ii) promote the development of affordable housing near public transit, employment centers, health care facilities, schools, grocery stores, commercial centers, or other community amenities; and (iii) not foreseeably result in the displacement of existing affordable housing.
2. The Department shall give priority to applications reasonably projected, based on the methodology used by the locality to determine such projection, to most significantly reduce the locality's unmet affordable housing needs, to be measured by the proportion of needed housing units projected to be created by new housing.
3. The Department shall make awards to those applicants with the greatest potential for accomplishing the purposes of this chapter. If an application is denied, the governing body shall be informed of that fact, together with the reasons for the denial.
C. Grant amounts shall be made at the sole discretion of the Department in accordance with its established guidelines and procedures. Decisions of the Department regarding grant awards shall be final and not subject to review or appeal.
§ 36-181. Expenditure of grants by localities.
In addition to any other purpose authorized by this chapter, localities may use grants awarded from the Fund for new construction of or improvements to any combination of the following categories: schools, roads, transportation systems, fire and rescue/public safety facilities, libraries, parks, community centers, stormwater management systems, or water and sewer line extensions. Such localities shall report to the Department the estimated dollar amount of the grant award expended in each category and the actual number of affordable housing units developed in areas impacted by zoning actions for which they received grant awards on an annual basis for three years following the award of a grant from the Fund.
§ 36-182. Expiration of chapter.
The provisions of this chapter shall expire on July 1, 2029.