Virginia Housing Commission Releases Cautionary Report
Rising rents, worsening affordability, and concerns about tenant displacement have fueled a debate over
whether Virginia localities should be allowed to regulate rents. Over the past three General Assembly
sessions, two lawmakers have repeatedly introduced legislation to grant localities that authority, most
recently during the 2026 General Assembly Session.
Earlier this year, HB 278 and SB 355 proposed a broad local-option framework authorizing any Virginia locality to regulate rent increases in privately-owned rental housing. Both bills failed to advance and were referred to the Virginia Housing Commission—a legislative commission that studies housing policy and advises the General Assembly—for further review. The Home Builders Association of Virginia and Virginia REALTORS® opposed the legislation and continue to represent the industry on the Commission workgroup evaluating the broader concept of local rent regulation.
What the Bills Proposed
HB 278 and SB 355 would have authorized any locality to adopt an “anti-rent-gouging” ordinance capping annual rent increases at 3%, prohibiting more than one increase within a 12-month period, and requiring at least 90 days’ written notice before an increase. The bills also set out the following provisions:
- Vacancy Control: The cap would have remained attached to the unit after a tenant moved out, preventing rents from resetting to market levels between tenancies.
- Exemption for New Construction: New construction rental housing would have been exempt for 10 years, after which units became subject to the local cap. Certain specialized housing—shelters, group homes, and assisted living facilities—would have been permanently exempt.
- Local Administration: Each participating locality would have had to establish an anti-rent-gouging board to run the program, hear tenant complaints, review exemption requests, and determine when a larger increase was warranted to preserve a fair return or account for increased operating costs. The bills did
not set a uniform statewide fair-return formula; each locality’s board would apply its own standard. - Enforcement: Localities would have been required to impose civil penalties, and tenants could have brought their own enforcement actions. Compliance with the ordinance would have been a prerequisite for a landlord seeking possession for nonpayment—potentially delaying recovery of a unit over an unrelated rent-regulation violation.
Virginia Housing Commission Report
Commission staff found that rent control policies may benefit a narrow segment of low-income tenants by slowing rent growth and reducing displacement, but cautioned that those benefits must be weighed against effects on rental supply and the industry’s ability to develop, operate, and reinvest in housing. Those tradeoffs are especially significant in Virginia, where nearly half of renters are cost-burdened and the supply of lower-cost units continues to decline.
Staff concluded that HB 278 and SB 355 would create one of the most rigid rent-control frameworks in the
country—subjecting much of the state’s existing rental stock to regulation, raising operating and compliance
risks, creating inconsistent requirements across jurisdictions, and heightening the risk of unintended market
effects such as reduced reinvestment, lost rental units, and fewer financeable new projects.
Key Findings
- Rent control policies may protect some existing tenants but don’t solve the underlying problem. They can slow rent growth and reduce displacement for tenants in covered units, but they do nothing to lower costs for renters overall or add to housing supply — the core of Virginia’s shortage.
- Virginia’s proposal would be among the strictest in the country. Four features drive that: a fixed 3% cap
with no inflation adjustment, a comparatively short 10-year exemption for new construction, vacancy
control, and no carve-outs for small or affordable-housing providers. - Most existing rental housing would be regulated almost immediately. The proposed 10-year new
construction exemption would leave much of Virginia’s current rental stock subject to rent restrictions,
including an estimated 69% of Loudoun County’s multifamily units and 81% of Richmond’s rental units.
The rigidity creates real market and fiscal risk. A fixed cap that can lag operating costs pressures housing
providers (smaller landlords most acutely), discourages reinvestment and new construction, and can
depress multifamily property values and the local tax revenue tied to them. - Implementation would burden localities. Each would need staff to run boards, hear complaints, process
exemptions, and enforce the cap—roughly two full-time employees per 10,000 regulated units, with
Virginia’s structure likely to generate more disputes than comparable programs.
Outlook on Rent Control in Virginia
Housing Commission staff concluded that both bills would require substantial revision to reduce the risk of unintended market consequences before they could reasonably be reconsidered. The report outlined potential changes to address those concerns but stressed they were not an endorsement of rent control—only the minimum safeguards needed to protect the housing market and local economies.
The report does not settle the rent control debate, but it raises the bar for future legislation. New proposals will likely be judged against the Commission’s finding that the bills, as drafted, were more restrictive than most rent control policies elsewhere in the country. Moreover, the Commission’s recommendations are neither simple nor exhaustive; developing them into workable legislation would require substantial effort and still may not fully address concerns with the underlying policy.
Meanwhile, supply-focused solutions—like those advanced by HBAV and other housing advocacy organizations—have quickly gained traction in the legislature over the past five years. Recent bills have expanded financing tools, eased local zoning and permitting barriers, invested in infrastructure, and brought greater predictability to local review processes. Both nationally and in Virginia, the emphasis has shifted toward proven solutions—approaches with a track record of expanding housing supply rather than untested interventions in the market.