Housing costs to buy or rent in Virginia are near an all-time high, driven by a housing shortage estimated at 105,000 homes that reaches most regions of the commonwealth. Nationally, half of American households who rent are spending at least 30% of their income to do so, and a majority of low-income households spend at least 50%.
The housing shortage, nationally as well as in Virginia, means landlords have more leverage to raise rents—and tenants are less likely to find somewhere else they can afford. Similarly, a lack of for-sale properties in Virginia and the U.S. has led to rapidly rising prices and stopped prospective buyers from achieving homeownership. Higher rents have also increased homelessness, which has risen 13% in Virginia in the past five years.
In previous times, builders would construct new starter homes to fill that void, but restrictive zoning in most jurisdictions, both in Virginia and nationwide, has blocked lower-cost starter homes through drawn-out permitting processes, large minimum lot sizes, and banning town houses and duplexes.
The shortage has caused home prices to soar out of reach for many aspiring buyers, with Virginia’s average home price rising from $225,000 in December 2013 to $372,000 in December 2023 (prices cited are from Zillow; rents are from Apartment List). Six Virginia jurisdictions now have average home prices topping $1 million (Great Falls, McLean, Dunn Loring, and Vienna in the immediate Washington, D.C., metro area, and Upperville and Waterford, each more than 45 miles from the capital). Research has found that cities and towns such as these with restrictive zoning that allow only single-family homes in most areas and that restrict apartments tend to be less affordable and have lower shares of Black and Hispanic residents, excluding people from the schools, jobs, and opportunities these communities offer. Areas adding limited housing have also seen rents rise more from January 2017 to December 2023, including Prince William County (34%), York County (37%), Chesapeake (38%), Stafford County (39%), Ashburn (37%), Virginia Beach (39%), Manassas (45%), Short Pump (46%), and Fredericksburg (48%). A 2021 report by the state’s Joint Legislative Audit and Review Commission found large shortages of rental housing in Northern Virginia, Hampton Roads, Central Virginia, and Southwest Virginia/New River Valley.
In contrast, some municipalities have successfully kept housing cost growth low, including Tysons in the D.C. metro area, which has added more to its housing stock than any other jurisdiction in Virginia since 2017 and has slowed rent growth to less than 1% per year, up just 5% total over the past seven years (the average rent increase in Virginia over the same time period has been 25%).
California, Montana, New Hampshire, Utah, and Washington are among the states to have passed laws to allow accessory dwelling units, also known as in-law suites or granny flats, on most or all single-family properties. These units are typically a basement apartment, a studio over a garage, or a cottage in the backyard and tend to be affordable to residents earning less than the area median income. They’ve proved popular, in part because they enable multigenerational living, allow property owners to earn extra income, and create more housing without making big changes to a neighborhood’s look.
Another way states have addressed housing affordability is to allow multifamily housing on lots previously restricted to commercial use—with the rationale that if a five-story office building is allowed on a main road, then a five-story apartment building should be allowed there, too. This solution has become even more relevant with many areas experiencing high post-pandemic office vacancy rates along with a housing shortage. Bipartisan legislative majorities in California, Florida, and Montana recently passed laws to allow apartments in commercial areas, addressing in the process some onerous requirements that have stymied apartment construction, such as large parking mandates.
California and Washington also passed bills to study a potential building code update to enable small apartment buildings on smaller lots by allowing one staircase instead of forcing a bulkier building layout that includes two staircases and a long corridor. Though the requirement for two staircases and a long corridor stems from concerns about fire safety, evidence shows that safety outcomes are no better in places with the mandate than those without it, such as many European countries. New York City and Seattle allow one staircase for buildings up to six stories, yet New York and Washington states have fewer fire deaths than average.
Another policy change that gained traction in 2023 was allowing churches and other religious organizations to build housing for low- and moderate-income residents on land they own. Some religious organizations have long sought to build such housing but have been stopped by restrictive zoning codes and protracted permitting processes.
Research shows that jurisdictions that allow more housing, especially apartments, tend to see much slower rent growth, while those with restrictive zoning that allows little housing see faster rent growth—amounting to thousands of dollars per household annually. On the purchase side, while homeownership used to be standard for many in America’s middle class and a means for building financial security, it’s increasingly becoming out of reach for many younger families. Bans on apartments and accessory dwelling units have become especially harmful as household size has shrunk, with 63% of Virginia households having just one or two people now, and the average Virginia household size reaching 2.55, far less than the roughly four people per household when much zoning was adopted in the first half of the 20th century. If allowed by zoning, living in smaller homes—whether apartments or otherwise—closer to jobs, schools, stores, and extended family is attractive to many people to reduce commutes, transportation costs, and time spent in traffic.
Where apartments and smaller homes have been allowed, some residents choose them, while others still prefer to live in larger homes. But many Virginia residents haven’t had such a choice because of restrictive zoning, which has meant spending an ever-larger share of their family budgets on housing and transportation costs.
Alex Horowitz is a project director and Chase Hatchett is a senior associate with Pew’s housing policy initiative.