The Vermont Housing Finance Agency approved financing in the form of tax credits to help build 105 new, permanently affordable apartments around the state.
The money will fund about 60% of construction costs for 24 affordable units in Colchester built by Champlain Housing Trust, 14 apartments in Bristol, and 30 apartments each in Berlin and South Hero, and 18 in Morrisville, according to the agency.
The annual awards are part of the state’s push to build more affordable housing for people who need it.
At this point, “we have thousands of Vermonters who are paying affordable rents,” said Leslie Black-Plumeau, research and community relations manager for the housing finance agency.
The funding is awarded as tax credits, which are allocated to the state by the federal government. Housing organizations apply and receive the awards through the housing finance agency, and then provide the credits to an investor in the construction project in exchange for equity to fund the building.
The tax credits typically provide the cash to fund the majority of the construction. When a developer takes out fewer loans for a building, the apartment rent can be lower, Black-Plumeau said.
For the developer, “the numbers work,” she said. And in these apartments, Vermonters “are not spending unsustainable portions for their housing.”
With the tax credits, Downstreet Housing and Community Development and Evernorth will partner to develop a 30-unit building near the Berlin Mall. As units that are designated as affordable, the majority of the apartments will go to individuals and families making no more than 60% of area median income, said Julie Curtain, executive director of Downstreet.
With the funding, Downstreet and Evernorth are seeking the permits for the project. They’ll likely start construction next spring and complete the building in 2022, Curtain said. She called the tax credits “a great step.”
“It’s a key piece of our financing,” she said. “It really keeps the project moving forward.”
Across the state, the sale of the credits will yield $26 million, enough to cover roughly 60% of the development costs.
The projects receiving the tax credits include the proposed Village Center Apartments in Morrisville, which will fill a space left vacant by a downtown fire. The 24-unit building will include 18 affordable apartments, including five that are set aside for homeless households.
Cathedral Square will build a 30-unit building in South Hero for seniors and people with disabilities, and Champlain Housing Trust will construct 30 apartments in Colchester.
Addison County Community Trust and Evernorth plan to build a 20-unit building in Bristol for low- and middle-income families.
The grants are part of a larger effort to offer more affordable housing. The federal government will funnel millions in federal stimulus funds for new construction that will be allocated by the Vermont Housing and Conservation Board in the coming months. The state is also rushing to build more housing as homeless Vermonters move out of the motels where they stayed during the pandemic.
The new money will help to address that crunch, according to Black-Plumeau.
“There’s basically never a vacant unit in these buildings, and we have lots of people who have unmet needs,” she said.