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Bill

HB 536

Impact fees; locality authorized to impose on residential development.

2026 Regular Session Introduced by Karen Hamilton

Bill authorizes Virginia localities to charge developers impact fees for residential projects to fund required public infrastructure, trading upfront growth-related revenues against potential housing affordability impacts.

Subcommittee recommends passing by indefinitely (6-Y 0-N)
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Bill Summary · HB 536

Legislative bill overview

HB 536 authorizes Virginia localities to impose impact fees on residential development projects. Impact fees are one-time charges developers pay to offset the costs of public infrastructure (schools, roads, water systems) needed to serve new residential construction. This bill grants local governments discretionary authority to implement such fee structures rather than relying solely on property taxes or developer proffers.

Why is this important

Impact fees can help localities fund growth-related infrastructure without burdening existing residents through higher property taxes. However, they also increase housing development costs, potentially affecting affordability and construction rates. The policy reflects the ongoing tension between funding public services for growth and keeping housing development economically feasible.

Potential points of contention

  • Housing affordability concerns: Impact fees increase development costs, which are typically passed to homebuyers, potentially pricing out lower-income purchasers and exacerbating housing affordability challenges
  • Development industry opposition: Builders and developers may argue fees reduce project profitability and discourage new construction, particularly in less affluent areas
  • Implementation complexity: Localities must calculate appropriate fee structures; poorly designed fees may either fail to cover infrastructure costs or become punitive and discourage development

Compiled from official sources — confirm details with the bill’s official record.

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