Abigail Spanberger, who was elected Virginia’s next governor earlier this month, made housing affordability a prominent part of her campaign.
It makes sense for this issue to be a priority for voters, much as it has become elsewhere in the country. In Virginia, the median sales price for all homes was $446,144 in June, up almost $15,000 since last year, according to the trade group Virginia Realtors.
Data from Homes.com shows that the median price jumped 4% to 8% over the past 12 months in parts of Northern Virginia and in the Richmond and Roanoke metropolitan areas. In each of these regions, the supply of homes for sale remains well below what experts consider a healthy amount.
“Particularly in urban areas of the state, there’s been this rapid escalation in home prices,” Stephen Farnsworth, who teaches political science at the University of Mary Washington, told Homes.com. “That creates all kinds of economic uncertainty for people who want to buy a house and wonder if they’ll ever be able to.”
Spanberger will have opportunities to turn her housing wish list into action when she takes office in January, just before the state’s next legislative session starts midmonth. The session typically lasts only two months, so it is likely to be action-packed.
One question is how much she wants the state to get involved in housing policy, given that this is typically something that city and county governments control through land-use regulations. Her campaign platform suggests she prefers to lean heavily on incentives to encourage local officials to make it easier to build housing, rather than imposing new construction on them.
“[Spanberger] knows a one-size-fits-all approach won’t solve Virginia’s housing issues. As governor, she will work with local communities on solutions that make sense for them,” according to her campaign website.
Local governments often need help with roads, water
Her platform calls for incentives for cities and counties to provide financial assistance for new housing, adjust their zoning rules to reduce restrictions on what can be built where, and build more starter homes that are affordable to first-time buyers and middle-class families.
While incentives can work well, legislators in the Virginia General Assembly will want to strike a balance between respecting local governments’ authority over how land is used and “the dire need to get more units on the ground,” said Andrew Clark, vice president of government affairs for the Home Builders Association of Virginia.
Housing developers want local governments to make it easier to build, he told Homes.com, not only by opening up more places where they can do so but also by shortening the time it takes to obtain permits. It can take several years in many parts of the state for a proposed development to complete the local rezoning and site plan review process; larger projects often also require state environmental permits.
“The focus is not on abolishing local authority; it’s setting guardrails so there’s predictability for developers as they go through the process,” he said. “Any developer wants to know exactly how to get to yes.”
A major challenge for small cities and counties, especially on the outskirts of built-up areas, is that they lack the appropriate infrastructure, such as roads or water and sewer pipelines, to handle new residential subdivisions. These same places often have land available where new businesses can expand, but the lack of nearby, affordably priced housing can deter them from coming, Clark said. Outgoing Gov. Glenn Youngkin worked to address this problem by offering grants and loans for housing developments near new business sites.
He said this is an ongoing issue in parts of the state south of the James River and in the Shenandoah Valley; these areas are less urbanized and can offer significant opportunities to housing developers as prices rise in the Richmond and Norfolk regions and Northern Virginia. The state can offer local governments help with upgrading roads and water supplies, he said, while also nudging them to adjust their land use rules so it’s easier to build homes.
“You’re starting to see more builders looking at the valley, where there’s good access to highways and a housing shortage, and localities really want to embrace an increased housing stock,” Clark said.
The building code is another barrier
The state can also help encourage construction, he said, by reducing barriers in the state building code, which is updated every three years. Many of the new requirements in the code, such as those intended to improve energy efficiency, make housing more costly, according to a National Association of Home Builders report published last January.
“We’ve reached a point of diminishing returns,” Clark said. “We’re adding upfront costs that are a barrier to homeownership, with very little return for the homeowner.”
He praised two efforts recently in Henrico County, a large suburban area that wraps around parts of Richmond. The county established an affordable housing trust fund using revenue from new data centers and introduced a small-lot zoning district, which allows developers to see a quicker return on their investment by building a greater number of houses.
In the upcoming legislative session, Clark said he will closely follow bills to address reasonable time frames for cities to review housing applications, allow housing in commercial districts, and help developers reduce water and sewer connection fees for new houses, among others.
In terms of state mandates versus local control, city and county governments will cede only so much of their power over land use decisions, Chris Saxman, a former state legislator who leads the pro-business group Virginia Foundation for Research and Economic Education, wrote in a recent Substack post.
“The real battle ahead is not going to be between Democrats and Republicans; it will be state versus local decision-making,” he wrote. “Local governments are going to be [the] final deciders.”