This Virginia County Demonstrates How Data Centers Can Support Housing for First-Time Homebuyers

The surge in generative AI is driving a rapid expansion of data centers, creating tension over land, energy, and water resources. While many regions face contentious debates, Henrico County, Virginia, has taken a novel route by turning this growth into an opportunity for affordable housing. New tax revenues from data centers are being used to lower home prices for first-time buyers.

At a groundbreaking ceremony, Senator Mark Warner praised the initiative: This county is undertaking one of the most innovative projects Ive seen in the country. Housing experts nationwide are watching.

Henrico County channels tax income from more than $1 billion in data-center investments from companies like Meta and Google into an Affordable Housing Trust Fund. This fund bypasses slow federal programs and directly reduces the cost of new homes for local workers earning 60% to 120% of the areas median income. The goal is to ensure that AI growth benefits everyday residents rather than just tech investors.

Transforming Data Centers Into Starter Homes

Henricos Affordable Housing Trust Fund is the first program of its kind, with county officials learning and adjusting as projects progress. Eric Leabough, the countys director of community revitalization, describes the approach: We basically built the ship while sailing it.

The program invites developers to submit projects with target sale prices. Approved projects receive tens of thousands of dollars per home from the trust fund, lowering the purchase price. Additional incentivessuch as waived permit fees, credits for utility hookups, and expedited planning approvalsfurther reduce costs.

Leabough explains, If a home is listed at $460,000 and we provide $80,000 in funding, that brings it down to $380,000. Added incentives further reduce financing needs.

This approach was possible because Henrico County treats data-center revenue as a windfall, rather than relying on it for day-to-day expenses. Housing is a priority. Leadership wanted to create something transformational, Leabough adds.

Addressing the Housing Affordability Gap

Despite low unemployment and a growing tax base, many residents still struggle to afford homes. Since 2020, median home prices in Henrico have risen about 32%, while required incomes for homeownership jumped roughly 70%, outpacing wages for teachers, police officers, and retail workers. This left essential workers with few options beyond renting or commuting long distances.

Example: Discovery Ridge

The townhome community Discovery Ridge demonstrates the impact of Henricos program. Retail prices averaged $465,000, but trust fund assistance reduced buyers costs substantially. With the fund and developer incentives, buyers closed at approximately $318,000, often with no upfront payment, and received homes identical to full-price units.

The homes are deed-restricted: owners must remain for about 10 years or sell to another income-qualified buyer, keeping units affordable for future residents.

AI, Jobs, and Housing Stability

The initiative exists amid AI-driven job uncertainty. While national employment shifts have been modest, high-income sectors are experiencing slower growth, affecting mortgage affordability. Henricos median list prices fell about 7% between October 2024 and 2025, contrary to the broader market.

The trust fund targets workers less likely to be displaced by AIhealthcare staff, administrative support, retail employeeswho face high housing costs. Tim Parent of Mungo Homes notes, Many young people wont be able to buy a home in Richmond for years. Prices nearby start at half a million dollars.

Henrico Countys model doesnt eliminate AI-era job risk, but it converts part of the AI economic boom into a tangible benefit: homeownership opportunities and long-term equity for the community.

Author: Jackson Miller