The board, which is a quasi-governmental agency, says up to $34 million will be available to nonprofits, municipalities and developers partnering with them to bring affordable housing to various regions of the state.
The $34 million sum is the most state money the board has been able to oversee as part of a single bond since its inception in the 1980s. The other large bond was in 2004, when the state allowed the board to use $20 million in bonded money for affordable housing.
Jennifer Hollar, the director of policy and special projects for the board, said the money will go toward building or refurbishing about 600 housing units across the state that benefit people with low and middle incomes.
Hollar said that many homes can be built or refurbished because the board is trying to leverage an additional $70 million to $100 million from both the federal government and private capital that the nonprofits, municipalities and developers line up for the projects by themselves.
“We’re delighted to be able to make the funding available to create more housing across the state,” Hollar said. “It’s an investment at a level the state hasn’t seen in decades in affordable housing.”
“It’s going to create jobs, and it’s going to increase the grand lists in cities and towns across the state, so this is a significant investment on the state’s part, and the primary goal and result will be new homes,” she said.
Under the legislation passed in June, at least 25 percent of the bond must be spent on units that would be affordable for a family of four making $34,650 or less, and an additional 25 percent on units affordable for a family of four making between $55,440 and $83,160.
The remaining parts of the bond can be spent on housing that is affordable for residents at any income level at or below $83,160 for a family of four. That means the money cannot be used to build high-end properties for high-income families.
Hollar said the idea of the bond is to build affordable housing that the private sector would not otherwise be able to build because the construction cost would not be offset by the rents people can afford to pay.
“It’s always been the case since the (Great Depression) that the federal and state government need to be involved in some way for creating housing for low-income folks,” she said.
“In the more recent past, the sort of moderate-income housing could be done (and) it didn’t need some additional assistance in order for the numbers to work,” Hollar said.
That’s not true anymore, she said, and middle-class families in Vermont feel squeezed when trying to afford housing.
Vermonters struggle to afford housing
The U.S. Department of Housing and Urban Development considers a household “cost-burdened” if it spends more than 30 percent of income on housing costs.
The U.S. Census Bureau reports that, in 2015, 50.5 percent of renters spent more than 30 percent of their income on housing, and 25 percent spent more than 50 percent of their income on housing, making them “severely cost-burdened.”
Among homeowners that same year, 29.9 percent spent more than 30 percent of their income on housing, and 11.7 percent spent more than 50 percent of their income on housing, according to the U.S. Census Bureau.
A person or household seeking to rent a two-bedroom house in Vermont in 2017 would need to have total wages of $21.90 an hour, or about $45,500 a year, according to the 2017 annual “Out of Reach” report from the National Low-Income Housing Coalition.
And homelessness continues.An annual report released in June showed that the number of people without homes last winter was 1,225 — including 306 children. The total number of homeless people represents an increase of 11 percent over 2016.
Nearly one-quarter, or 267 of those people, said they had been subject to domestic violence. That number, which does not include children, represents an increase of 40 people since the 2016 report.
In fiscal year 2017, the Department for Children and Families went nearly $1 million over its $3.3 million annual budget for an emergency housing program because so many homeless families needed transitional housing.
The Agency of Human Services is planning to allow the department to overshoot that program’s budget again in 2018 to avoid kicking families out of emergency housing during the winter.
“What we’re seeing in our programs is one of a lack of housing and a lack of affordable housing in the state,” said Sean Brown, a deputy commissioner for the Department for Children and Families.
“So if that housing bond expands capacity and some of that is dedicated to low-income housing, we believe we would see a benefit to people in our programs in finding a place they can live that they can afford,” Brown said.
Housing that will be built
The Vermont Housing and Conservation Board will begin accepting applications in the fall, and expects around 100 of the units to be completed by the end of 2017, Hollar said.
The board will continue allocating the money for the next three years. Because of permit and construction time, all the units should be completed within five to six years, Hollar said.
The board has been holding presentations around the state encouraging nonprofits, municipalities and developers to apply for funding. The board wants the majority of the bond money — $20 million — to go toward building apartments.
An additional $4 million would go toward permanent supportive housing for people who need housing with extremely low rental prices but also social services to help with issues such as a disability, mental health diagnosis or addiction.
The remainder will be used for homes targeted toward buyers ($6 million), a housing innovation fund that could pay for creative nontraditional projects ($3.4 million), and a home access program ($600,000).
Eileen Peltier, the executive director of Downstreet Housing and Community Development in Barre, said her organization would “definitely” apply for funding, for at least one project.
Peltier said Downstreet Housing generally puts together seven to 12 financing sources for each project, and the organization would be able to leverage those sources using the housing bond.
The organization has already started planning to build 30 apartments over a new transit center in downtown Montpelier, Peltier said. The apartments would target middle-income people — such as a family of four making between $55,440 and $83,160 a year.
Peltier said the organization wants to start construction on the apartments in the spring, and families could start moving in during early 2019.
Chris Donnelly, the director of community relations for Champlain Housing Trust in Burlington, said his organization plans to apply for funding to build 30 homeownership condos as part of a major private development on land formerly owned by Burlington College.
The homes will be available to a family of four making up to about $83,000, he said. Champlain Housing Trust hopes to break ground on the condos in the spring and have them available to families by early 2019.
“The bond will allow us to provide downpayment assistance for folks so they can access the market, and then we make sure that the homes remain affordable over time from one owner to the next,” he said.
“This is exciting for us,” Donnelly said. “We haven’t had any new construction homeownership for a number of years, so this is a great opportunity.”