Virginia’s General Assembly enacted significant changes affecting real estate development during its 2025 and 2026 sessions. The measures create new development and redevelopment opportunities, streamline some local approvals and impose additional requirements on certain projects and industries.
For commercial real estate owners, developers and investors, five recent changes are particularly significant because they affect project density, entitlement timing, redevelopment options, permitting requirements or the value of existing energy assets.
In brief, the new laws may reduce parking and entitlement burdens for certain residential, mixed-use, affordable-housing and energy projects, while adding equipment and permitting considerations for data centers. Because several changes depend on project location, application timing or local implementation, developers should evaluate them early in acquisition, due-diligence and entitlement planning.
1. Virginia Limits Parking Requirements For Transit-Oriented and Mixed-Use Development
One of the more significant changes for residential and mixed-use developers is a new statewide limitation on certain local minimum parking requirements.
House Bill 888 (2026) enacted as Chapter 1075, limits the amount of off-street parking that local governments may require for residential, multifamily and mixed-use projects located within one-half mile of the entrance to a qualifying mass-transit or public-transportation station or facility.
For multifamily and mixed-use residential projects within these designated areas, a locality generally may not require more than one-half parking space per-dwelling unit. The statute limits requirements for single-family, two-family and townhouse development in these areas to one space per dwelling unit.
The legislation also applies outside the designated transit areas, but through a different mechanism. Localities with populations greater than 20,000 must establish an administrative process through which developers may request a reduction of at least 20 percent from otherwise applicable minimum parking requirements for residential, multifamily and mixed-use projects.
For developers, the significance can extend well beyond parking itself. Structured parking can be one of the more expensive components of a mixed-use development, while surface parking consumes land that might otherwise support additional development. Reduced parking requirements therefore may affect project density, site design, construction costs and the feasibility of redevelopment projects.
The new law became effective July 1, 2026.
2. Virginia Has Accelerated the Local Site-Plan and Subdivision Review Process
Virginia also has made significant changes to the process by which localities review subdivision plats, site plans and plans of development.
Senate Bill 974 (2025) enacted as Chapter 594, removed planning commission and governing body approval authority from much of the administrative review process for plats and plans and assigned that authority to a designated local agent. The legislation also shortened the period for forwarding certain plats and plans to state agencies for review. The changes are intended to make portions of the development-review process more administrative and predictable.
That can be important for commercial developers because the entitlement process does not end when zoning is obtained. Delays during site-plan and subdivision review can affect construction schedules, financing deadlines, purchase agreements and tenant-delivery obligations.
The law became effective July 1, 2025. Although it makes portions of administrative review more predictable, developers should evaluate the revised statutory procedures together with the substantive submission requirements, review practices and timelines of the locality in which the project is located.
3. Localities Have New Tools to Encourage Affordable Housing Developments and Commercial-to-Residential Conversion
Virginia enacted several measures in 2026 that could materially affect multifamily and mixed-use development.
Under Virginia Code § 15.2-2292.3, enacted through House Bill 594, local governments may authorize administrative approval of certain rezonings for qualifying affordable housing developments.
Among other requirements, at least 75 percent of the project’s units must constitute affordable housing, and the project must satisfy statutory infrastructure and location requirements. The law therefore gives participating localities a mechanism for substantially streamlining the rezoning process for qualifying projects.
Another 2026 change could be particularly significant for owners of underutilized commercial properties. Effective July 1, 2027, an expanded Virginia Code § 15.2-2304 will allow local affordable dwelling-unit programs to employ a broader range of development incentives.
Those tools include density increases, reduced lot and dimensional requirements, increased floor-area ratios, transit-oriented development incentives and provisions encouraging the conversion of office, light-industrial and commercial space to multifamily use.
In a market where owners and developers continue to evaluate alternative uses for older commercial properties, particularly office buildings, these changes may create redevelopment opportunities worth considering.
Primary source: Virginia Code § 15.2-2292.3
4. Data Center Development Faces New Environmental Requirements
Given the importance of data centers to Northern Virginia and the Commonwealth as a whole, new legislation regulating the industry has potentially significant commercial real estate implications.
House Bill 507 (2026) enacted as Chapter 397, establishes new emissions requirements for backup generators at data centers. For covered permit applications submitted on or after July 1, 2026, the Virginia Department of Environmental Quality generally may not issue the required air permit unless the emissions limit for each engine-generator is equal to or lower than the emissions achieved by a Tier 4 equivalent generator. The Department retains authority to impose more stringent limits where otherwise authorized.
For data center developers, the requirement adds another consideration to project design, equipment selection, permitting and potentially development costs. It also should be considered during due diligence for sites intended for data center development. The requirement applies to covered data-center permit applications submitted on or after July 1, 2026.
5. Battery Storage Can Now Be Added to Certain Solar Projects Without New Land-Use Approval
Virginia also significantly changed the rules governing battery energy storage facilities associated with existing commercial solar projects.
House Bill 891 (2026) enacted as Chapter 1076, provides that a qualifying battery energy storage project is a permitted accessory use on property already subject to an approved special exception for a solar facility.
To qualify, the battery project must be located within the boundaries of the property covered by the existing special exception, and its rated storage capacity may not exceed 100 percent of the nameplate generating capacity of the associated solar facility.
Most importantly from a land-use perspective, a qualifying battery storage project does not require a new special exception or other local land-use approval. Applicable federal, state and local safety, fire and environmental requirements continue to apply, and the statute preserves certain local enforcement authority.
For owners and developers of existing solar facilities, the change potentially removes a significant entitlement obstacle to adding battery storage. It may also affect the development potential and valuation of properties already approved for commercial solar generation.
The law became effective July 1, 2026.
What Commercial Real Estate Owners and Developers Should Consider
Taken together, these laws illustrate several broader trends in Virginia real estate law. The Commonwealth is imposing additional requirements on some intensive uses, particularly data centers, while simultaneously reducing or streamlining regulatory barriers for housing, mixed-use redevelopment and renewable-energy infrastructure.
The practical effects will vary considerably by locality and project. Several of the new statutes depend upon local implementation, while others establish statewide rules that directly constrain local land-use authority.
Developers considering acquisitions or projects in Virginia should therefore evaluate not only existing zoning and local ordinances, but also whether recent changes in state law create new development rights, procedural protections, incentives or regulatory obligations that may affect a property’s development potential.
Should you have any questions about this matter, please contact Viktor V. Pregel (vvp@gdllaw.com).
This article is intended for general informational purposes only and does not constitute legal advice. The application of these laws may vary depending upon the facts of a particular project and the requirements of the applicable locality.
