This article is from HBAV's historical archive. Some formatting may differ from current articles.
After a delay caused by the City of Richmond’s water issues, the General Assembly resumed its normal business last Monday, Jan. 13.
Getting back on track generated a flurry of activity, with hundreds of bills being introduced and heard each day in committee.
HBAV continues to push our main message to General Assembly members: There’s an overwhelming demand for housing in Virginia. In fact, our state’s population grew 0.4% in 2023, with projections to increase by more than 34,000 to 44,000 people annually through 2028. The resulting and unprecedented demand for housing means we must ensure that builders have the tools and resources to supply housing for every Virginian.
We’re letting legislators know that you’re doing everything possible to make the numbers work so that everybody can afford to purchase a home, rent a home or complete a home improvement project.
Housing costs
Let’s look at the costs that go into housing construction today, for a moment.
Today, the median price of a new home in Virginia is $461,542.
Of that total cost, regulatory costs account for nearly $94,000 per new home. Breaking that down further, the expense is $41,330 during the development process, and $52,540 during the home’s actual construction. See the graph here from the National Association of Home Builders.
Last year, every time the median new house price jumped by $1,000, we saw that priced – and, in effect, pushed – another 3,846 Virginia households out of the housing market.
As a benchmark, 2.3 million Virginia households can’t afford a new median-priced home, and the current income needed to qualify for a new home in Virginia is $137,496 — a 16.6% increase from 2023.
The bottom line: We know this is a very difficult environment to build, which is driving up costs and prices to buyers and renters.
When the median new house price jumps by $1,000, more than 3,800 Virginia households are priced out of the market.
What we’re advocating for in 2025
The 2025 session is what’s known as a “short session,” in that legislators will meet for only 45 days. The session will end on Feb. 22.
As of last week, there were 1,815 bills introduced, with 1,136 in the House of Delegates and 679 in the Senate. HBAV’s legislative team is combing through every bill to analyze its impact on our members and the ability to produce more housing in Virginia. So far, we’ve flagged 221 bills that impact residential construction and land development.
HBAV’s legislative agenda this year includes 12 proactive bills to support our members:
- Our first bill focuses on streamlining the approval process of site plans and subdivision plats (SB974 and HB2293).
- These bills seek to create a more predictable and efficient approval process. The Senate version is carried by Sen. Schuyler VanValkenburg (D-Richmond), with the House version by Del. Carrie Coyner (R-Chesterfield).
- We’re communicating how the significant cost of infrastructure is leading to less housing and significantly increasing the cost of homes that are built.
- We’re working with Sen. Jennifer Carroll Foy (D-Fairfax) on SB1189 to establish the Virginia Residential Development and Infrastructure Fund, which creates a state-supported resource for critical housing infrastructure, including water, sewer, roads and stormwater systems for new residential and multifamily development.
- We’re working on legislation that would allow localities to provide for the full or partial reimbursement of water and sewer connection fees (SB1263).
- Water and sewer connection fees are significant costs, and localities need a mechanism to help reimburse builders and developers. The bill is carried by Sen. Lamont Bagby (D-Richmond).
- Another barrier to housing is often securing financing, leading to our support of HB1701 by Del. David Bulova (D-Fairfax) and SB828 by Sen. Mamie Locke (D-Hampton).
- The bills extend and expand the Virginia Housing Opportunity Tax Credit (HOTC), set to expire in 2025. This incentive for affordable housing and development has proven effective in making projects financially viable and addressing our critical need for diverse and affordable housing options.
- HBAV is also working to protect the Virginia Historic Rehabilitation Tax Credit to prevent caps reductions or eliminations. This program has had significant economic and community benefits in revitalizing neighborhoods, creating jobs and attracting residential investment to historic areas across Virginia.
- Because member projects often are not approved by local governments, we’re promoting HB2499, which is related to comprehensive plan subdivision ordinance and local approvals.
- This bill, carried by Del. Marcus Simon (D-Fairfax) and Del. David Owen (R-Henrico), ensures broad and subjective comprehensive plan requirements cannot be used to deny site plans or subdivision plats. It protects applicants from unreasonable proffers or conditions during the by-right development review process, reduces plat and plan review times, and mandates automatic director-level review after the third submission to ensure accountability.
- Consumer protection is also a hot topic.
- Another hot topic this year is energy.
- HBAV is supporting HB2506 from Del. Chris Runion (R-Augusta) and HB2086 from Del. Irene Shin (D-Fairfax) related to energy efficient home tax credits. These would authorize an eligible contractor to claim an income tax credit during the upcoming years and the amount equal to $1,000 or $2,000 for building energy-efficient homes.
- We’re also supporting SB777 by Sen. Locke to create an Energy Efficiency Weatherization Task Force. The force will work to evaluate ways to coordinate with local governments, utilities and contractors to deliver energy-efficient housing upgrades for Virginia households.
Where we’re playing defense
The HBAV team prides ourselves on being our members’ biggest line of defense, and every year brings bills that we oppose:
- First, HB2238 by Del. Fernando Martinez (D-Loudoun) would allow localities to require a detailed map of all tree locations and critical root zones in a development. This would add delays and unnecessary costs.
- We’re also opposing HB2184 by Del. Paul Milde (R-Stafford) related to cash proffers and transferring land to extinguish development rights.
- And every year, we see several bills pop up that make it even more difficult to provide affordable housing or rent control. We must harness all our resources to communicate why these proposed tools don’t work, including providing examples nationwide of how they have not been effective. We anticipate several more bills being added to our opposition list.
Coming up next
This is the final week to introduce legislation. All committees will be in full swing, and many of the bills that pass committee will be heard on the House and Senate floors.
I’m excited by the strong turnout we expect for the HBAV Day on the Hill on Jan. 29, when our members visit with their local legislators and reinforce our core messages. It’s also a great time to support our HBAV Build PAC, which helps us ensure we elect officials who support our causes.
— Craig Toalson, CEO, Home Builders Association of Virginia
HBAV members are preparing for January 29th’s Day on the Hill
We have a strong number of members signed up to participate in one of our most important annual events! Day on the Hill is our opportunity to show up and show legislators that home building matters. We will coordinate with your local association to schedule meetings with members of the General Assembly in the morning, and we’ll have a call on Friday, Jan. 24, to help you prepare. Watch for a calendar invite if you’ve registered!
Note: Registration is closed for debriefing and lunch after the morning visits, but let us know if you missed registering and still want to meet with your legislator. Get the schedule here.
