As home prices rise across Virginia and the nation, Henrico County has announced a plan to strategically invest $60 million to address housing affordability.
The county’s new Housing Affordability Trust fund is designed to impact home prices for first-time homebuyers, seniors and the working class. County leaders said they are hoping to make homes affordable for people like child care workers, first responders, teachers, restaurant staff, office administrators and industrial park workers.
The county is currently focused on homeownership and generational wealth building, with possible future efforts to enter into multifamily housing.
Henrico leaders said the county is using tax revenue generated from its growing data center industry as the means for funding the trust fund. The initial $60 million is a cash investment generated solely from “new economic development” that was not included in the most recent operating budget.
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“We recognize that housing affordability requires a whole community response. We need everyone, everyone,” said County Manager John Vithoulkas. “The government, private, nonprofit sectors, working together as partners to create a substantial lasting impact in Henrico.”
Data centers popping up across region
The housing plan looks to capitalize on the rapid growth of data centers in the state. The centers act house computer and storage systems that act as the backbone of the internet and telecommunication networks.
Virginia is already home to about 35% of the globe’s large-scale data centers, according to the Virginia Economic Development Partnership, and more are being steadily added. Henrico County officials recently approved plans to rezone about 600 acres on East Williamsburg Road for such a project.
The county’s plan for using the funds tackles several means of reducing home prices.
The trust will provide grants to nonprofits and for-profit entities to offset the cost of residential lots in subdivision and other developments.
In some instances, a nonprofit — such as the Maggie Walker Community Land Trust — would retain ownership of land. Homes built on top of that land would be sold without including the cost of the land, significantly reducing the cost of the home.
Buyers will be subject to eligibility requirements, and subsequent sales of such properties would remain in the land trust to ensure reduced costs in perpetuity.
“The trust will help buy lots in communities throughout Henrico for the purpose of creating homes that will be affordable today, tomorrow and forever,” said Tyrone Nelson, chair of the Henrico Board of Supervisors.
Henrico said it will also be waiving all building permit fees for developers that include affordable units as part of their projects, while also entering those projects into an expedited review process. Sewer and water connection fees will also be waived.
“At the end of the day, we believe these actions could reduce the cost of buying a home in our county as much as 30%,” Nelson said.
In April, county leaders said they hoped the plan could make roughly 100 to 150 new homes affordable per year, the rough equivalent of 10% to 15% of the new homes built per year. That threshold, they said, was the mark needed to make a positive impact on the overall housing market.
The median sales prices for a single-family home jumped from $355,000 to $390,000 between 2023 and 2024, according to data from the Central Virginia Multiple Listing Service. The price for condos rose from $345,390 to $395,617 over that same time period.
Someone earning $67,400 in 2020 could afford a $287,000 home with the 3.47% mortgage rate. In 2024, that same person would need to earn $118,300 per year to afford that same home, which now costs $384,576 while mortgage rates increased to around 6.78% — according to Virginia REALTORS data.
‘A stable, healthy and affordable place’
Data compiled by the county showed there are basically no affordable homes across central Virginia to anyone making 50% of the area median income.
The Partnership for Housing Affordability is the primary administrator for the program. The 20-year-old nonprofit has championed programs targeted at affordable housing across the region.
Jovan Burton, the partnership’s executive director, said the nonprofit will determine the program’s criteria, how it will work, who it will serve and how to have the greatest impact by affecting the highest number of people possible.
“Having a stable, healthy and affordable place to call home is a priority,” Burton said. “It’s a foundation for so many things: educational outcomes for students, economic development and prosperity for localities and wealth accumulation for many generations to come.”
Burton said there are about 715 housing trust funds across the country, 72 of which are county housing trust funds, and that Henrico’s is the only trust fund to use data centers as its sole dedicated funding source.