Richmond’s Housing Supply Crisis is an Economic Development Risk

Last month, when I read Eli Lilly’s announcement of a $5 billion investment in Goochland County, I was thrilled. It’s a major economic development win for our region, bringing 650 jobs to the West Creek Business Park. But it also raised a pressing question: Where are all those new employees going to live?

As of Oct. 1, we’ve only rezoned 837 residential lots across seven counties and the city this year — an alarmingly low number. In the same period, we’ve sold about 2,500 new homes. The region continues to report an insufficient supply of building permits relative to job creation. And what drives new building permits? Rezonings.

By contrast, in the Carolinas, 11 out of 12 regions report a healthy alignment between job creation and housing supply. Ratios of one building permit per new job are common — an intentional balance that supports both workforce and economic expansion. It’s no coincidence that CNBC ranked North Carolina the No. 1 state for business in 2025, while Virginia slipped several places compared with the previous year.

Here in Virginia’s capital region, only one building permit is issued for every three new jobs created. To keep pace with growth, we need to move closer to a 1:2 or even 1:1.5 ratio — a level that would better position us to house the very workforce driving our economy forward.

Applying the Carolina standard, Goochland would need to approve rezonings for 325 to 650 new single-family homes in tandem with the Eli Lilly project. Without this parallel action, Goochland risks sending a mixed signal: pro-business in attracting employers, but unprepared to house the workforce those businesses require.

The regional picture is no stronger. Richmond typically issues 4,000 to 5,000 for-sale building permits annually. To sustain that pace, rezonings must occur two to three years in advance. Meaning, we need 4,000 to 5,000 for-sale lots rezoned annually, while we sit at 837 year-to-date.

The housing market itself underscores these constraints. Zillow reports that millennials are now the largest group of individuals sharing homes with nonrelatives, a clear symptom of affordability and availability pressures. In Q2 2025, builders sold 468 condos and townhomes in the Richmond region, representing 43% of all new home sales. These attached products are becoming essential to workforce housing: the average condo or townhome sold for $427,071, compared with $618,310 for a single-family home — a 45% premium. Optimistically, 20% of households can qualify for a new home under current average median incomes.

Builders and trades are already adjusting to this slower market — because fewer homes are being built, not because demand has disappeared. Unless rezoning policy evolves to meet market realities, we risk undermining both our housing affordability and our economic competitiveness.

To correct course, the Richmond region needs a rezoning strategy directly linked to economic development. Localities should set measurable housing-to-jobs targets and pair every major employer announcement with parallel housing approvals. Streamlined, predictable review timelines — including fast-track rezonings for job-related projects — would show coordination between growth and housing. At the same time, incentives for attainable housing such as condos and townhomes, including density bonuses and shared infrastructure costs, would help close the affordability gap. A regional housing scorecard, updated quarterly, could track rezonings and permits against job creation, while the state should treat housing supply as a core competitiveness metric, aligning it with workforce and economic policy.

The Richmond region has the talent, the land and the leadership to meet this challenge, but only if we treat housing as a central pillar of economic development, not an afterthought. Every rezoning is a decision about whether our workforce can live where it works, and whether our region can truly compete.

Chad Joyce
President, HBAR