Opportunity is calling in Richmond, Virginia. While Northern Virginia is garnering attention for Amazon’s recent announcement of HQ2, the state’s capital has big plans for development over the next few years.
Established by Congress in 2017 to encourage long-term investments in under-developed, low-income communities, Opportunity Zones offer investors substantial tax breaks on capital gains in these specific neighborhoods. Out of the state’s 212 Opportunity Zones, 23 are located in or around Richmond.
Considering the city’s expected growth, now may be a lucrative time to invest or build in one of Richmond’s Opportunity Zones. Below, we dissect Richmond’s areas of opportunity based on asset class, specifically in Richmond City, Henrico County, and Chesterfield County. Using Reonomy’s robust sales data in conjunction with county demographics and development plans, these graphs explore the scope of available property in Richmond and its surrounding counties.
Richmond City Opportunity Zones
City proper, particularly, has big plans for future expansion. Currently, the city plans to redevelop Richmond Coliseum with a 1.4 billion-dollar proposal in the works– the biggest in city history. This project promises an additional 21,000 new jobs and a net new revenue of over $1.1 billion in the next three decades. The new stadium will also be zoned in a “tax-increment-financing” (TIF) district that redirects tax revenues to pay down public debt used to finance the deal.
If you’re interested in capitalizing on Richmond’s new growth, Reonomy’s data shows a fairly even split of assets across the county’s Opportunity Zones. Multifamily and vacant land parcels are slightly more available, taking up 22.67% and 18.35% of the market, respectively. Data also shows a clear uptick in multifamily sales over the past year at 66.7% of 2018’s total market sales. As the population continues to increase and more jobs enter the economy, the multifamily housing sector will most likely grow, as well.
Henrico County Opportunity Zones
Lying near Richmond’s city limits, Henrico County has also been a hub of recent development. Since cutting the personal property tax rate on data center equipment, Henrico County has become particularly alluring for technology companies over the last year, with companies increasing data center development. In fact, Facebook recently announced they’d be investing another $1 billion into the second phase of their Henrico-based data center.
Platform data shows nearly 60% of the property in Henrico County’s Opportunity Zones are undeveloped land. Similarly, vacant land made up over half (53.7%) of Henrico County’s property sales this year at an average of $532,891. Developers, particularly those in the technology facet, might be interested in purchasing land in Henrico’s Opportunity Zones to double down on tax benefits.
Chesterfield County Opportunity Zones
Chesterfield County is located just south of Richmond. Of the three counties, Chesterfield has the most diverse parcel breakdown by asset class in Opportunity Zones. It’s not specified what type of specific property make up the 35.69%, but retail and multifamily make up 21.56% and 17.84% of the property pool, respectively.
2018 sales data shows an equally diverse spread. Again, uncategorized assets top the year’s records at 24.85% and over $89 million in sales, making it difficult to see what properties they were exactly. Retail follows at 19.2% and over $70 million in sales, while multifamily made up 18.36% of the market’s sales at just over $67 million.
Ready to find property in Richmond’s Opportunity Zones? Learn more about the market’s only Opportunity Zone search feature, here.