Market Updates
Bold Action Can Solve Central Virginia’s Housing Crisis
Published: February 3, 2025
By Chad Joyce, President, Home Building Association of Richmond
It’s a conversation happening all across town: Why are Richmond-area new home prices so high?
You’ll find the answer in the time and money required to build a single home — let alone several. Here’s a real scenario, from the perspective of a home building professional (a builder, developer, banker, or industry partner) of what it takes to build a new housing community in greater Richmond.
Imagine you buy land with plans to build 100 houses on 100 lots. Starting today, with no objections or delays, the rezoning process to allow you to construct these homes takes a year — now it’s 2026. Engineering and construction plans require two more years for design and approval (2028). It takes another year to build roads, utilities, and infrastructure (2029). To construct one home takes a year (2030), with the remaining 99 completed within three (2033).
All this time, just as anyone does for big purchases, you are using borrowed bank or investor money to buy and hold the land, design, manage and build. These interest payments rack up hundreds of thousands of dollars in fees. A one-month delay in the approval process adds another $15,000 in fees.
These costs — and the cost of time — is passed onto the homebuyer.
Eight years and hundreds of thousands of dollars in fees for just 100 homes — and Richmond needs thousands. On top of that, regulatory costsadd nearly $94,000 to the price tag of a new home before the shovel even hits the ground during the development process. These fees include, but are not limited to, applying for zoning approval, compliance toward fees and required studies, proffered conditions such as increases to setbacks and buffers, larger roads, additional sidewalks, and the hard cost of process delays through the deferral of projects at local government meetings and subsequent construction plan approvals.
The Richmond region is the beneficiary of some of the biggest population migration in the nation, and has seen by far the fastest population growth of any metro area statewide (Northern Virginia’s losses have been Central’s gains), according to data from the Weldon Cooper Center for Public Service at the University of Virginia. Central Virginia added more than 35,000 people from 2020 to 2023, while Northern Virginia declined by around 20,000 in that same timeframe.
Yet the number of active community construction projects in Richmond is down 30% from a peak in June 2019, and statewide, building permit issuance has slowed. The median price of a new home in Virginia is $461,542, calling into question how future generations, and current first-time would-be buyers between ages 25 to 44, can even afford a home. In Richmond, that demographic’s estimated household income is $91,000 — more than $30,000 less than is required to afford a median-priced home.
And as home prices rise, an increase of just $1,000 prices out nearly 4,000 Virginia households. As a benchmark, 2.3 million Virginia households are not able to afford a median priced home, according to the National Association of Home Builders.
The lack of adequate rezoning capacity and the cumbersome approval processes create a perfect storm of unaffordability and housing scarcity that threatens the future of the Richmond region.
So what can home builders do? Each January, we turn to Virginia lawmakers in the General Assembly with proposals we believe shorten timelines, reduce delays and remove burdensome and costly regulations (ones that don’t add to the safety or value of a home.)
In 2025, the Home Builders Association of Virginia — which includes 13 local home builder associations comprised of single- and multifamily builders, land developers, remodelers and professional and trade partners — are supporting legislation to streamline and make more consistent the approval process for new community site plans (which show how the land is to be used, infrastructure placement, home designs, and more) and plats (which designates property boundaries).
By asking lawmakers to explore and encourage local land use and zoning reform, Virginia can ensure a more predictable and efficient process and accelerate housing production timelines. We’re also asking the state to invest in infrastructure costs, like water and sewer lines, to remove financial barriers to community development.
These moves are all in the name of removing or reducing significant cost and time drivers to create more houses faster — and put them within reach of buyers.
Virginia’s housing crisis is not insurmountable.
But the fix requires creativity, leadership and a willingness to act boldly. Legislators must work to simplify and accelerate the development timeline, reduce bureaucratic hurdles, and encourage innovative solutions to increase housing supply.
Central Virginia is a wonderful place to live, but without intervention, the cost of living and therefore doing business here will become prohibitive. We cannot afford to let this crisis worsen. The time to act is now to ensure the Richmond region remains a place where families can thrive, grow, and call home.
Chad Joyce is president of the Home Building Association of Richmond. Contact him at hokiechad@gmail.com.