Report: Vermont renters face wide affordability gap

[V]ermonters face a wide gap between what they can afford to pay in rent and market rental prices, a new report has found.

The average Vermont renter makes $13.40 an hour and can afford to spend about $700 per month on rent, according to a report published by the National Low Income Housing Coalition this week.

But the average statewide fair market rent is much higher: $1,184 per month for a two bedroom apartment and $945 per month for a one-bedroom.

“This is the story of our state, our region and our national affordable housing crisis,” Erhard Mahnke, the coordinator for the Vermont Affordable Housing Coalition, said of the report.

“I think it’s an indicator of how bad the affordability gap is, and that is for renters working one or maybe even two jobs,” he said.

According to the report, a single earner would need to make an hourly wage of at least $22.78 to afford rent for a “modest” two-bedroom apartment.

Mahnke said the report’s findings make it “all the more disappointing” that Vermont lawmakers didn’t raise the minimum wage this year. While the Senate passed a bill that would have raised the wage from $10.78 to $15 by 2024, the House had hoped for a more gradual increase, and the two chambers failed to reach agreement on the policy before adjourning in May.

“Obviously if you need to earn $22.78 an hour, even a $15 min wage is not going to fill the entire gap. But what we say is every little bit helps,” Mahnke said.

Josh Hanford, the acting commissioner of the Department of Housing and Community Development said that while some parts of the state, like Chittenden County, have high rents, in others like Orleans and Orange counties they’re much cheaper, ranging between $700 and $900 per month for a two-bedroom.

He said that “helping people find apartments in areas of the state that are a little more affordable” is one strategy to help address Vermont’s high rental costs.

But he also said that the state is working on other ways to improve access to affordable housing.

The housing department is in the process of conducting a study to understand the factors that drive up the costs of building affordable housing in Vermont, and developing “model zoning bylaws” to reduce the costs and barriers to developing housing in towns and cities across the state.

Helping landlords refurbish blighted properties would also improve access to affordable apartments, according to Hanford.

“We have some underutilized poor quality housing stock and with small investments we can make those available again and help this housing crunch in a more cost-effective way,” Hanford said.

Gov. Phil Scott’s proposed budget included $1 million to help property owners renovate dilapidated housing stock, but lawmakers did not include the proposal in next year’s spending bill.

In a bid to boost access to affordable housing this year, senators proposed investing $50 million over the next 20 years into an affordable housing bond that could yield up to 1,000 apartment units across the state.

But many, including Vermont State Treasurer Beth Pearce, raised concerns over the cost of the proposal. Pearce cautioned in particular that after Vermont’s state bond rating was downgraded last year, now is not the time to take on major debt.

The proposal eventually died in the Senate.

Rep. Tom Stevens, D-Waterbury, the chair of the House General, Housing and Military Affairs Committee said that the state has been “underfunding affordable housing for 30 years.”

State leaders have failed, he said, to fully fund the Vermont Housing and Conservation Board, which makes investments in affordable housing across the state. The board is supposed to receive about $20 million in property transfer tax revenue each year. But often lawmakers choose to divert some of that money to pay for other expenses. This year, the board received less than $10 million, Stevens said.

In addition to increasing investment in affordable housing, Stevens says lawmakers need to think of ways to help make the development of commercial housing in Vermont less expensive, so that rents can also come down.

“I think our role is to continue to try to build a business sensibility that puts housing and workers higher up on the food chain than they are now,” Stevens said.