The latest bigger city housing trend to hit Richmond real estate: tearing down a move-in ready, single-family home to build a brand new, bigger and far pricier one in its place.
Why it matters: The teardown trend is bulldozing some of the city's affordable housing stock — literally — while threatening the historic charm and character of many of Richmond's most established neighborhoods.
The big picture: Teardowns started happening in noticeable volumes in big cities more than a decade ago, according to Realtor.com .
- The practice garnered headlines in LA , Chicago , Seattle , New York , Atlanta and, notably, Northern Virginia , which the Wall Street Journal dubbed " the land of a thousand teardowns " in 2016.
- No matter the city, the recipe is universally the same: smaller, older houses in sought-after neighborhoods, coupled with buyers who want modern homes with ample square footage, high ceilings and open concepts — and can afford to pay for it.
State of play: Teardowns started inching into Richmond just before the pandemic, Cyane Crump, executive director of Historic Richmond , tells Axios.
- The loss of these homes — often the bungalows, cape cods and ranchers that define Richmond's one-time street car neighborhoods — not only threatens the city's housing affordability, but it also eliminates the sense of place that makes local neighborhoods unique, she says.
- The preservation group has seen it in all corners of town, but in the most noticeable numbers in the Near West End , the section of the city that starts west of Powhite Parkway and runs to the Henrico line.
- There, in "MLS area 20," the average home sale price thus far this year is just under $1.1 million , more than twice the city's $482,000 average price. In 2019, those figures were $598,656 and $309,402.
By the numbers: Nationwide, teardowns accounted for 9.1% of all new single-family homes built in 2021, up from 6.4% in 2020 and 7.7% in 2015, according to the National Association Of Home Builders.
- Tech limitations in the city's permitting system make it difficult to capture the exact numbers of Richmond teardowns, but an Axios review of records found dozens in recent years, all in the Near West End.
Zoom in: Those include 816 Pepper Ave. , a 3-bedroom, 1.5 bath that sold for $421,000 in 2021, and again in April, this time as a 5-bedroom, 4-bath modern farmhouse for $1.3 million.
- It was a similar story next door at 814 Pepper and down the street at 805 and 823 .
- Two blocks over on Maple Avenue , the new homes built on the site of former starter homes sell for closer to $1.5 million, as was the case at 501 , 510 , 523 and 605 .
- Teardowns also played out on Westview Avenue at 502 , 504 , 506 , 512 and 514 and on West Franklin , Libbie , Stuart and Guthrie avenues and Arlie Street , to name a few.
In every case, a modest home around 1,500 square feet sold for roughly Richmond's median sale price and was replaced by a brand new one, usually a modern farmhouse , at double the square footage and triple the price, or more.
- "We've seen people literally tear down a historic farmhouse to build a modern farmhouse," Crump says.
What they're saying: "Not only are we losing ready-to-move-in homes that are affordable, we're also fast-tracking the rest of the neighborhood to be unaffordable for everyone else," 1st District City Councilman Andreas Addison, whose district includes the Near West End, tells Axios.
- Addison says teardowns have a direct impact on the rest of city's property taxes, especially the immediate neighbors, because of the way state building code is written.
- Take a home assessed at around $350,000, which includes the value of the land (say, $100,000) and the structure ($250,000). If that house is purchased and demolished, the full assessed property value becomes the land value, so $350,000, plus the value of whatever is built on the lot.
- And that inflated value ends up affecting neighboring homes because a plot of land in the Near West End, or whatever part of town it's in, is worth what people will pay for it. And in Richmond, at least in some neighborhoods, they'll pay a lot.
Worth noting: There's not a lot the city can do about teardowns the way existing building codes are written, Addison says. That's especially true now as the city is trying to encourage development to add more homes for all Richmonders.
What we're watching: Smarter and equitable growth, protecting existing residents' ability to stay in the city, and reigning in gentrification are the city's "next chapter challenge," Addison says.
- Until then, keep an eye out for bulldozers near you.
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