Code-switching, the interleaving of two or more languages within a sentence or discourse is pervasive in multilingual societies. Accurate language models for code-switched text are critical for NLP tasks. State-of-the-art data-intensive neural language models are difficult to train well from scarce language-labeled code-switched text. A potential solution is to use deep generative models to synthesize large volumes of realistic code-switched text. Although generative adversarial networks and variational autoencoders can synthesize plausible monolingual text from continuous latent space, they cannot adequately address code-switched text, owing to their informal style and complex interplay between the constituent languages. We introduce VACS, a novel variational autoencoder architecture specifically tailored to code-switching phenomena. VACS encodes to and decodes from a two-level hierarchical representation, which models syntactic contextual signals in the lower level, and language switching signals in the upper layer. Sampling representations from the prior and decoding them produced well-formed, diverse code-switched sentences. Extensive experiments show that using synthetic code-switched text with natural monolingual data results in significant (33.06\%) drop in perplexity.