AMENDMENT TO RULES AND PROCEDURES FOR DIRECTORS' DEFERRED COMPENSATION PROGRAM

Exhibit 10.38

AMENDMENT TO
RULES AND PROCEDURES
FOR
DIRECTORS’ DEFERRED COMPENSATION PROGRAM

     The following amendment to rules and procedures governing the deferral by a Non-Employee Director pursuant to Section 7(b) of the AvalonBay Communities, Inc. 1994 Stock Option and Incentive Plan, as amended and restated on December 8, 2004 and as subsequently amended (the “Plan”) was adopted by the Company’s Board of Directors on December 11, 2008. All capitalized terms used herein shall have the same meaning as used in the Plan unless otherwise specifically provided herein.

     1. Section 6 of the Rules and Procedures is amended in its entirety to read as follows:

      Payment . All vested stock units credited to a Non-Employee Director’s Account shall be paid in shares of Stock to the Non-Employee Director, or his designated beneficiary (or beneficiaries) or estate, in a lump sum within 30 days after the Non-Employee Director ceases t