The Virginia General Assembly convened this week and will be in session for 60 days.
Recently, in that same amount of time, a Virginia home builder lost nearly $33,000 in interest and interest carry because of a combined four months of delays by their local government at the start of construction and in recording new home lots onto the books.
For a new home, government regulations — building codes, land use, environmental, and other rules — add nearly $94,000 to the price tag of a new home, a figure that has risen 11% between 2016 and 2021 in Virginia. If homes are to remain affordable — and if Virginia is to remain competitive — those costs cannot go higher and should be reduced.
Virginia is a top state for business. We are job creators. Our location can’t be beat. But what compels migration anywhere is quality of life — and that means having a healthy supply of quality affordable housing options. Housing is a means to economic growth.
And there is overwhelming demand for new homes in the Commonwealth. Virginia’s population continues to grow — about 1% a year since 1981. Yet despite more residents and more jobs, home builders are constructing fewer homes — and the trend isn’t improving.
From 2010 to 2020, Virginia builders put up half as many homes as they did in the three decades prior. Permits to build single-family homes are down 4% since last year, and multifamily permits are down 25%.
So how do we turn this around? We attribute the industry’s challenges to the five L’s: Lots, Land, Laws (and regulations), Lumber (and materials), and Labor costs.
Localities can play a huge role. To create more housing supply, as Richmond Federal Reserve chief Tom Barkin said in November, communities need to own the problem, compete for developers via financial incentives, have greater cooperation on common issues like permitting, zoning, and planning, and innovate to make land more available for housing construction.
The Home Builders Association of Virginia 2024 Legislative Agenda
This General Assembly session, our legislative agenda is one that will help expand quality, affordable housing in Virginia. We will introduce several key bills to pursue this goal.
- Reviewing of preliminary/final plats and site plans. Guardrails and parameters regarding plan review and timelines differ between commercial and residential projects. Our legislation seeks to give the same protections to residential development and construction that are afforded to commercial projects. This will limit endless rounds of comments and speed up construction timelines.
- Creating a uniform statewide traffic impact study threshold. We must prevent localities from requiring a traffic impact analysis on projects that fall below Virginia Department of Transportation (VDOT) thresholds for requiring such a study. In other words: if VDOT says an analysis is required, one should be done; if not, no analysis is necessary. Local traffic impact analysis requirements add months in delays and unnecessary costs to new homes.
- Certainty, validity, and predictability of conditional use permits. Our members need certainty, predictability, and reasonable plan validity time. This legislation will set the floor for localities to provide a minimum of five years of validity for conditional use permits, special use permits, and special exemption on land development projects exceeding a certain size threshold.
- Protecting local land use decisions made at virtual meetings during the pandemic. Like all businesses, government at all levels relied heavily on virtual meetings during the COVID-19 pandemic. A recent court case in Northern Virginia has questioned the land use decisions made by local governments at virtual meetings, and our bill seeks to uphold these decisions.
- Policies for partial bond release for E&S and environmental bonds. Clarifies that existing provisions related to the partial and final release of performance guarantees shall also apply to erosion and sediment (E&S) control measures, stormwater management facilities, and fill and borrow areas. If a bond release is denied, the locality must provide justification in their policy as to why and what needs to be corrected.
These are small steps that can lead to big changes to creating more affordable, quality homes across the Commonwealth and keep Virginia competitive.
Beyond legislation, we will spend much of our time over the next two months building relationships with the legislature’s many new lawmakers to ensure they see our members as housing experts, and that they pass no new laws or regulations that do further harm to this industry. We are already monitoring several pieces of legislation that we will strongly oppose and will update our members more next week.
We have a vested interest in these matters because while we are home builders, contractors, and suppliers, we also represent the next generation of home buyers and renters who desire to afford shelter and a quality life. The Home Builders Association of Virginia will work tirelessly during the 2024 General Assembly Session on solutions to solve Virginia’s housing affordability crisis and ensure the Commonwealth stays open for business.
Craig Toalson, CAE
CEO, Home Builders Association of Virginia
HBAV members: Join us Thursday, Jan. 25 for our Day on the Hill
Don’t miss one of our most important annual events! Show up and show legislators that home building matters. Coordinate with your local association to schedule meetings with members of the General Assembly that morning. After our time at the brand new General Assembly Building, HBAV will host all members and guests in our offices located at the James Center for lunch and a debrief meeting. Register and get the schedule here.