Vermont’s full-time workers need to earn $23.68 an hour, or $49,258 annually, to afford a two-bedroom apartment at fair market rent, according to a study issued Wednesday by the National Low Income Housing Coalition and the Vermont Affordable Housing Coalition.
The annual Out of Reach report calculates a housing wage — what a full-time worker must earn to not spend more than 30% of their income on rent — at the state and county level across the country.
The study found a significant gap between what Vermont workers need to earn to afford rent, and what they actually make. It estimates the average Vermont renter makes $13.83 per hour, about $10 per hour less than the housing wage for a modest two-bedroom unit.
“This report pretty much shows what we already know to be true, is that housing is out of reach for many of Vermont’s renters,” said Kerrie Lohr, fundraising and public relations manager at Lamoille Housing Partnership in Morrisville. “We’ve been in the midst of a chronic affordable housing crisis for many, many years.”
Jennifer Hollar, director of policy and special projects at the Vermont Housing and Conservation Board, said Vermont’s housing woes date back to at least the 1980s. Some affordable housing created by the federal government was by then a few decades old. The restrictions designed to keep those rents low expired, and that housing went on the general market at a much higher rate.
The state created Vermont Housing and Conservation Board, which now administers all state and federal housing dollars, in 1987 as a response to the tightening market. New affordable housing construction built under the board’s purview is placed under a covenant in perpetuity, meaning it is never allowed to return to the open market.
A permanent covenant “protects the state’s investments over time,” Hollar said. “This permanent affordability approach is keeping us from losing ground.”
The housing coalition study’s housing wage is noticeably higher in the Burlington metro area, a geographic designation created by the U.S. Department of Housing and Urban Development that includes Chittenden, Franklin and Grand Isle counties. There, they calculate workers need to earn at least $31.31 per hour to afford a two-bedroom home.
Several variables contribute to the state’s housing crunch, said Maura Collins, executive director at Vermont Housing Finance Agency. New home construction has declined, particularly since the Great Recession of 2008.
Even though Vermont’s population isn’t growing quickly, this shortage of new housing collides with other changes. Household size is decreasing, due to divorce and young adults living alone longer. Each year, some homes are converted to vacation houses, or fall out of the market altogether as they age and deteriorate.
Wages have not kept up with homeownership and rental costs, Collins said.
“What’s important to remember, though, is that this has been a difficult market for lower-income Vermonters for generations,” Collins said. “Because home affordability is a ratio between your housing costs and your income, it means that it hits each of us differently at different times.”
Collins noted housing affordability is getting more attention now only because it’s increasingly affecting the middle class.
The housing coalition study estimated a minimum-wage worker in Vermont would need to work 64 hours a week to afford a modest one-bedroom home, and 81 hours a week to afford rent for a two-bedroom.
“It’s fair to say that the housing needs in our state are longstanding, and were not caused by the pandemic,” Collins said.
Both Collins and Hollar said investment and intentional policies — from zoning to financing — can help turn the tide. While the pandemic didn’t cause the state’s housing crunch, it has prompted new streams of government funding for housing solutions.
The Vermont Housing and Conservation Board announced Wednesday that it would commit $31,447,000 in state funding and $22,365,000 in federal money to expand affordable housing and shelter capacity. The board expects to create 389 new homes, with 221 reserved for previously homeless Vermonters or households at risk of homelessness.
Fifteen new shelter beds should become available by the end of this year. Much of the approved construction will continue into 2022.
“We’re in the process of beginning to award the funds that the Legislature and governor made available this past legislative session,” Hollar said.
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