(The Center Square) – Virginia now has a city where a so-called starter home costs $1 million, according to Zillow, as home prices across the commonwealth continue to rise faster than the national average.
The upward trend has sparked a response from lawmakers, as U.S. Sen. Mark Warner, D-Va., announced two new housing proposals this week to expand affordability.
According to Axios, home prices in Virginia have risen more than 40% over the past five years—well above the national average. In Richmond, the average home value is now about $377,000, according to Zillow, with homes typically going under contract in around 10 days. In Mechanicsville, it’s closer to $378,000.
Zillow defines a “starter home” as one priced in the bottom third of a local market’s listings. That means in high-cost areas, even a $1 million home can fall into the lowest tier—highlighting how expensive some markets have become for first-time buyers.
Warner called the housing shortage an “all-hands-on-deck situation” and says his new federal proposals aim to boost supply, preserve aging homes and help more Virginians afford to buy.
One of his lead proposals, the Neighborhood Homes Investment Act, would “build and preserve more than 500,000 affordable, single-family homes for homeownership over ten years in under-resourced communities,” according to a press release.
Unlike most development incentives, the tax credit would only be available after a home is built and sold to a homeowner, shifting the risk off taxpayers and onto the developers.
A second piece of legislation, the Preserving Rural Housing Investments Act, would “support more investment in rural and low-income housing by clarifying the tax-exempt controlled entity rules to ensure that Government Sponsored Enterprises” can partner with nonprofits and local governments to keep older USDA-subsidized homes from being lost or flipped into market-rate rentals.
The two proposals are part of a broader housing agenda Warner has backed this year, including tax credit expansions for historic and affordable housing projects and a new effort to help first-generation buyers cover down payments, closing costs and interest rates.
