Maura Collins is the executive director of the Vermont Housing Finance Agency, the lender created by the Legislature in 1974. VHFA’s mission is to finance and promote safe, affordable housing – through mortgages for home ownership and through support for the development of rental housing for low- and moderate-income Vermonters. Collins has been at the VHFA for nearly 17 years.
VHFA doesn’t have deposits; it sells tax-exempt bonds to finance affordable housing and its assets are its loans. It doesn’t receive any state appropriations, and it’s governed by a board that is mostly appointed by the governor. The VHFA raised $37 million through a bond sale for the state’s 2017 affordable housing bond.
Vermont housing prices have been rising faster than wage growth for several years. Particularly in Chittenden County and in other urban areas, employers say prospective employees are deterred by housing costs. According to VHFA’s Mia Watson, Vermont housing prices have risen an average of 2.7% each year since 2014, while incomes for low- and middle-income households have grown slowly or declined.
In order to afford the Vermont median home price of $219,500, a household would need to earn at least $62,810, according to VHFA. The median household income in Vermont is $57,808. The housing supply for low- and moderate-income households is tight in many areas of the U.S.
As the leader of a mission-driven financial institution, Collins spends a lot of time talking to legislators and other decision-makers about the need for more affordable housing in the state. She also frequently finds herself explaining the difference between VHFA and the Vermont Housing and Conservation Board, the state entity that makes grants and loans for affordable housing and also funds land conservation.
By statute, Collins serves on the board of the VHCB, and the director of VHCB, Gus Seelig, serves on the board of the VHFA.
Right now, Collins’ primary mission is to fit fair housing, land use, finance, homelessness, rental housing, home ownership, student debt, housing for people with disabilities and dozens of other topics into the statewide conversation about economic development and human rights as it relates to housing. Collins talked with VTDigger recently about housing needs and solutions in Vermont. The conversation has been edited for length and clarity.
VTDigger: Why is housing such a problem in so many areas? Is it worse in Vermont?
Maura Collins: We do have our challenges. One fundamental structural problem we have in the U.S. to finding affordable housing that you’d want to live in is that we have decided that as a nation we are not going to create modest low-priced housing to own, only to rent. There is no federal program to build affordable homeownership.
There are pockets of this same supply constraint happening all across the country, especially in the more urban areas.
When I go to national conferences, the decimation happening in rural America is very scary and sad. While I see problems with divestment in some of our rural communities, I don’t see it to the same extent. I can be optimistic that with investment, the little village centers, the country store, the post office, if we can hold on to some of those cherished landmarks, and ensure some kind of support for them, it gives them a fighting chance.
VTD: Why doesn’t the market take care of the housing problem?
MC: The math doesn’t work. Building housing is too expensive. Back in the 1950s and 1960s we built these modern, cheaper homes. But our expectations of what we want in a home has changed, and maybe some of us are not as willing to live in a 1,100-square-foot home. That could be one thing.
Municipalities used to provide roads, curbs, sidewalks, wastewater, everything you need to entice the developers to come build homes in their community. That made the housing less expensive, so the sale price was lower. That doesn’t happen anymore; municipalities are more strapped financially.
Also, income inequality has grown, and therefore people can’t afford as much as they used to. Their own finances are stretched further paying for higher education, child care, transportation, health care. There is less money to spend on housing if they want to.
And we’re not using our land as efficiently as we could. Land is more expensive, and in the public process about development, something that happens more now is more neighbors look at developments and say, “I don’t want more density near me, I don’t want more homes.” We also have much higher expectations for parking requirements.
Also, construction costs are going up; labor is more expensive; materials are more expensive.
VTD: What can the state do?
MC: Land use is definitely No. 1. There is Act 250 compromise legislation out now that takes a lot of great steps. But it’s not just land use at the state level. A lot of local regulation and zoning impacts what we actually see happening.
There is a perception that change is bad, and growth is suspect. I see it in my community. As our town grows, residents are struggling with being thoughtful about that growth, and wanting to make sure the community we have today is not lost as changes are made and development happens. There’s a feeling that everything should go very slowly, so there’s a hesitation to throw the barn doors open and make sweeping land use changes when we don’t know how that is going to play out.
People who don’t want us to use cars really want density, they want everything to be downtown and walkable and close. We waste so much of our land on parking, and surface parking is not great for the environment. The Legislature is looking at how to force communities to reduce parking requirements if they haven’t done it already at the local level.
VTD: If you could change one thing to make more housing available, what would it be?
MC: I would have every community in the state have a housing commission. We need a local response looking at this. It’s frustrating to me that most towns in our state have a fence surveyor and a cemetery commission and we’re planning more for the people who have deceased than the ones who would like to join our community while they are alive.
We are seeing people moving into more urban areas. That may mean there are shrinking towns that need to have a housing commission so their existing housing stock doesn’t fall into such disrepair that their community vibrancy dies along with the structures. We need to know if we’re offering rental housing in our communities or not, and what the needs are of the people living in that community, and the needs of the people who want to live in the community and can’t access it.
People are frustrated that the state is not more affordable, and yet when there are steps proposed to make housing more affordable, there is a natural resistance to that change.
When communities try to support housing that is more dense, maybe bigger buildings, people start getting very nervous about that growth. Another disconnect: People ask, “If the population isn’t growing, why would we need more housing?”
Our population doesn’t have to change in order for us to need more homes. Every year our household size is getting smaller. That puts pressure on our housing stock.
VTD: Supporters of the 2017 housing bond say that $37 million will result in the construction of more than 800 units of housing. How is the money used?
MC: It has gone primarily to nonprofit housing developers, like Downstreet Housing and Community Development, Champlain Housing Trust, Cathedral Square, and Twin Pines. It’s a loan. They put it with other money that is available, mostly from the federal government, and together that pays to build the affordable housing. Technically a tax credit partnership owns it, an LLC, but for all intents and purposes, it is that nonprofit who owns it. Every housing development that uses these tax credits sets up an individual LLC for that purpose.
VTD: Isn’t that just a gift to developers from taxpayers?
MC: No. It creates affordable housing in perpetuity. Because in Vermont, unlike other states, when we give either state or federal money that we don’t have enough of, we don’t want that developer to build the housing, operate it as affordable housing for 30 years, and then on year 31 sell it, get a profit, and walk out the door.
So instead of having the housing be affordable for 30 years, which is the standard, we raised the bar and said, “You get free money, and you need to make sure this is affordable forever for as long as this building is housing.”
It’s not going to a person; it’s not free money to the nonprofit, to the residents, to anyone; it is a zero percent interest loan given to that development so they can build this building and rents can be lower. Then this legal partnership owns it for at least the first 15 years. After that, the investors oftentimes exit the partnership and the housing does then become wholly owned by the local nonprofit.
VTD: What will happen with housing this legislative session?
MC: I see more agreement than disagreement, though the disagreements end up in the news more.
In general, I genuinely see the administration, the Legislature, the affordable housing advocates, and the municipalities, on the same page about the problems and in many regards what should be done.
I’m really excited that housing is one of the top five or 10 issues being discussed this year.
