Back to Basics: Dillon Rule

The FWD #B19 • 730 words

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How an 1860s legal theory still shapes housing policy in Virginia today.

Most Virginians have no idea that a legal theory from the days of the Civil War continues to dramatically limit how local governments can address housing challenges. Welcome to the Dillon Rule—a complex legal precedent that’s less about a single law and more about a decades-long debate about local government powers.

Dillon Rule, explained

Named after Judge John F. Dillon, this legal principle isn’t a law passed by legislators, but a judicial interpretation that has spread across the United States. In essence, Dillon Rule dramatically restricts local governments, stating they possess only three types of powers:

1. Those granted in express words
2. Those necessarily implied by explicitly granted powers
3. Those absolutely essential to the government’s declared purposes

In other words, the state is strict parent who only allows its local government children to do exactly what they’re told—nothing more, nothing less.

A long Virginia tradition

Virginia has a particularly restrictive interpretation of the Dillon Rule. Since 1882, the state’s Supreme Court has consistently narrowed local government powers. Multiple attempts to reform this approach—including recommendations from a Governor’s Advisory Committee in 1992—have failed.

Today, as a result, the local policymaking environment in Virginia can be defined by three rules:

1. Constraint: The needs of local communities have grown, while local government powers have not.
2. Negotiation: Localities are forced to lobby the General Assembly for special authorization in an increasingly political environment.
3. Entrenchment: Virginia’s long tradition of weak local governments creates significant institutional barriers.

Real world impacts

The abstract becomes concrete when we look at housing policy. Take inclusionary zoning as a prime example. Fairfax County, along with six other localities explicitly named in state code, has broad powers to provide incentives for affordable housing units in new developments. Most importantly, these communities also have the power to require those set-asides in nearly all new residential construction.

But in Richmond, Norfolk, and every other localities? State law keeps those powers highly limited and tightly prescribed. This often prevents the design of effective incentives, and prohibits these local governments from denying development proposals that don’t voluntarily opt in to an inclusionary program.

On the whole, the full range of potential local housing strategies can be arranged into three buckets, according to how much flexibility the state has granted to localities.

1. Broadly permissive: Activities that municipalities do have wide berth on include zoning and land use regulations, the use of locally-generated revenue for housing, and entering public-private partnerships.
2. Mixed bag: State code grants localities some control over how they can collect revenue and issue debt, assess real estate and provide tax abatements, adopt rental inspection programs, and address blighted properties.
3. No-go zones: Strategies that the General Assembly keeps locked away from local governments include rent control ordinances, expanded legal protections for tenants, additional building code requirements, vacancy taxes, among other approaches.

Dealing with Dillon

Still, local governments aren’t completely powerless. In many cases, municipalities still have a wide array of options allowed by state code they may not even be known to them. Effective local policymaking in the current environment should therefore cover four different—but very much connected—approaches:

• Leverage untapped and available powers creatively
• When possible, experiment in legal grey areas when risks are low
• Collaborate with nonprofits, economic development authorities, public housing authorities, and similar entities that can exercise complementary powers
• Carefully prioritize requests to the General Assembly for evidence-based, high-impact solutions

The big picture

Dillon Rule isn’t just a legal technicality. It’s a fundamental constraint that shapes how communities can address housing challenges. As local needs grow more complex, these 19th-century legal interpretations can feel increasingly outdated.

The takeaway? If communities across Virginia want to effectively address their housing challenges, they’ll need to strategically deploy some political capital—and not be afraid of a healthy dose of creativity.

Helpful resources

Curious Commonwealth asks: Why is Virginia a Dillon Rule state? (VPM News)

Local Government Autonomy and the Dillon Rule in Virginia (virginiaplaces.org)

The Failure of Home Rule Reform in Virginia: Race, Localism, and the Constitution of 1971 (UVa Law)