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Subcommittee clarifies property-tax exemption for nonprofit affordable-housing providers and advances bill

Finance Subcommittee No. 2 on Local Tax Infrastructure and Authority · January 28, 2026

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Summary

HB 854 (substitute) narrows a technical fix so localities may treat nonprofit-affordable-housing ownership structures used with low‑income housing tax credits as eligible for charitable-use exemptions; the panel reported the bill 9–0 after supporters said it restores intended local authority.

Delegate Cousins sponsored HB 854 and explained the substitute is a technical fix to ensure nonprofit affordable‑housing providers that use federal low‑income housing tax credit financing retain access to existing local property‑tax exemptions. "This legislation just clarifies that nonprofit ownership can be defined to include nonprofits that are operating affordable housing as defined in relevant code," the patron said.

Supporters including Isabelle MacLean of the Virginia Housing Alliance said the change is permissive and designed to restore localities’ intended authority to exempt property used for affordable housing, not to expand or mandate exemptions. Counsel explained the substitute narrows the language to charitable or benevolent uses specifically for affordable housing; that narrowing drew questions from some committee members concerned about verification and potential abuse. MacLean and other proponents said localities would retain ordinance-based guardrails and public-hearing steps.

The committee adopted the substitute and reported the bill by a recorded vote of 9–0. The transcript shows the vote and the patron thanked the committee.