(The Center Square) — Lawmakers voted to uphold Gov. Glenn Youngkin’s veto on House Bill 1398, legislation meant to preserve government-subsidized affordable housing in Virginia.

Affordability restrictions on more than 6,000 Virginia rental units are set to expire within the next five years; restrictions on about 25,000 homes will expire within the next 10 years. Virginia needs about 300,000 more affordable apartments to “eliminate [the] cost burden among Virginia’s low-income renters,” according to a study by Virginia Housing and the Department of Housing and Community Development.

The legislation employs a strategy making its way through state legislatures across the country: Giving localities the right of first refusal to taxpayer-supported affordable housing properties within their limits.

Interested localities would first have to pass an ordinance detailing the particulars of their program, and then identify and notify property owners of affordable housing units they might want to purchase. Owners would be required in the case of a sale to sell to localities if localities, within 30 days of a final offer from a third party, matched that offer.

Localities would only have the right of first refusal if the interested third party had plans to abandon a publicly-supported affordability program since the goal of the legislation is to preserve affordability.

Isabel McLain, director of policy and advocacy for the Virginia Housing Alliance, wrote the bill, in collaboration with two delegates who are also real estate lawyers, Dels. Marcus Simon, D-Fairfax and Josh Thomas, D-Prince William, and other sources across the country involved in such programs. Virginia’s bill was modeled after programs that have been implemented in other states, such as Massachusetts, Oregon and Maryland’s Prince George’s County, but with some important distinctions.

For one, programs differ in the length of time they give localities to match a third-party offer.

“Thirty days is incredibly short compared to… the vast majority of any sort of programs that include a right of first refusal,” McLain told The Center Square.

“There’s really no way you could go shorter and still make it possible for a locality to exercise that.”

Oregon also authorizes 30 days, but in Prince George’s County and Massachusetts, localities have 60 and 90 days, respectively, to exercise their right of first refusal.

However, Mark Calabria, a senior adviser to the Cato Institute and former director of the Federal Housing Finance Agency, says that even 30 days isn’t ideal.

“If I’m the owner, almost all of that time is costing me money,” Calabria told The Center Square. “Interest rates could move during that time. Certainly, if someone’s going to lock a rate, that’s not costless.”

“What a bill says it does and what it actually may do are two different things,” said Calabria, explaining that he doesn’t think the bill gets to the root of the problem it’s trying to solve. Calabria maintains that affordability is ultimately determined by the overall supply of housing.

“If you’re concerned about overall affordability issues, then you should look at supply restrictions in the jurisdiction,” Calabria said. “I’m an ends person…. If the ends is, how do we make housing broadly affordable, especially to low-income people? The answer is more housing.”

He also takes issue with how the bill gives localities the upper hand for free.

“There’s nothing that’s stopping the cities or nonprofits (localities can transfer their right of first refusal to any other entity that will keep the property government-assisted affordable housing) from competing directly. A right of first refusal is a thing of value, and you should pay for a thing of value,” Calabria said.

McLain understands objections to the bill based on how it enables government interference in the marketplace. But, in crafting the bill, she and other parties “tried to minimize it as much as we could” and “ensure that the seller is being compensated just as much as they would with the third party.” She also thinks some things warrant government involvement in the market.

“We think that it’s really important that localities have an opportunity to intervene if it’s a really important property that should be preserved. This isn’t going to happen for every single one. There’s no way. But this is especially for our best forms of affordable housing,” McLain said.

Though the bill ultimately failed due to the veto, it will likely be reintroduced next session.