Sen. Michael Sirotkin is taking another run at a housing bond this year, hoping to free up a share of the state’s money to build more affordable homes.
Sirotkin, D-Chittenden, chairs the Senate Committee on Economic Development, Housing and General Affairs. He proposed a $50 million housing bond last January, before the Covid-19 pandemic shut down businesses and turned legislators’ energy toward the crisis.
Sirotkin told his committee colleagues Wednesday that he realizes persuading other legislators to borrow more money for housing this year might be a difficult sell in a session in which the top priority is combating the impact of the Covid-19 pandemic.
“I’m not naïve as to the hurdles that faces,” he said.
A $37 million bond that the Legislature passed in 2017 has leveraged federal and state money, tax credits, and other resources to build nearly 800 units of housing in Vermont.
But affordable rentals and homes for sale are still scarce in many areas of the state, and housing remains a top priority for economic development officials and advocates for the poor. Home prices rose sharply this year in some places, and homelessness surged this fall.
Sirotkin proposed a housing bond early in last year’s session. State Treasurer Beth Pearce told the Senate economic development committee then that, while the housing shortage is clearly holding back the state’s economic growth and harming people, the state couldn’t afford to borrow another $50 million.
This year brings new and complex conditions to the housing conversation. While the state is struggling with high unemployment and other recession conditions, the huge infusion of federal money last year has raised tax revenues far above projections. They’re expected to come in $254 million higher this year than fiscal analysts predicted in August.
The pandemic has also exposed the hardships and risks faced by low- and medium-income people, many of whom have lost their jobs as a result of Covid-19 and are relying on state rental and mortgage assistance programs to stay in their homes.
Sirotkin said Wednesday this year might be the right time for borrowing $37 million to $50 million for more housing.
“We’ll see if our changed circumstances — that is, the pandemic — make something like a bond more acceptable to the Legislature and to the treasurer,” Sirotkin said. “Interest rates are ridiculously low, and the first housing bond was a home run. We have the funds available to pay the debt service.”
The state is receiving another round of federal Covid-19 emergency money this month, part of the budget bill Congress passed late last year. Preliminary analysis shows that all of the federal housing money in the December Covid federal relief is dedicated to rental assistance, not to capital improvements. More federal aid is expected, and advocates are pushing for capital investment, not just rental assistance.
“We’re grateful that there is a huge amount, $200 million of rental assistance,” in the federal budget passed late last year, said Gus Seelig, executive director of the Vermont Housing and Conservation Board. That board spent $34 million of federal coronavirus relief money in 2020 on rehabilitating buildings and constructing new homes to provide about 250 units of affordable housing.
Seelig, like Sirotkin, said the state still has a supply problem. Many of the people now housed in hotel rooms have vouchers for rental assistance, but can’t find a place to rent, he said.
“Without increasing supply, we cannot solve this problem,” he told the committee Wednesday.
“We need capital investment in housing,” Sirotkin said. “The business community says we need it, the homeless community needs it, the middle class needs more affordable housing. It’s one of the best economic stimuluses we can possibly do.”
