Support for creating more housing in Vermont is gaining momentum in the state Senate.
The Senate Committee on Economic Development, Housing and General Affairs advanced a bill Wednesday that would invest millions of dollars in housing and also loosen regulations that prevent more housing from being built.
“This is a significant housing bill with lots of components that are going to do a lot of important things for Vermonters of a range of incomes,” said Chris Donnelly, director of community relations for the Champlain Housing Trust, the state’s largest builder of affordable housing.
The bill encourages construction of housing in town or village centers and in neighborhood development areas. If approved, the bill would authorize $5 million in tax credits for fiscal year 2023 for refurbishing old buildings for rental housing in those areas. It would limit fees for wastewater applications, reduce fees for residential development, exclude the land gains tax and provide tax credits for flood mitigation.
It would authorize $5 million for fiscal year 2023 in grants to large employers who want to build housing for employees, as well as for converting commercial properties to residential use and enhancing density and walkability.
The bill would create a municipal and regional fund run by the Vermont State Treasurer’s Office, funded with 17% of the revenue from the property transfer tax. It authorizes $650,000 for the fund for fiscal year 2023. Cities and towns could use the money to change their rules to make it easier for the construction or rehabilitation of housing.
It also would award $5 million between now and June and an additional $10 million for the 2023 fiscal year, which begins July 1, to make homes more affordable for middle-income families.
One way it would do that is by offering builders a subsidy that would cover the difference between how much it costs to build a home and how much it will appraise for.
“Oftentimes, the reason the market is not building homes that are affordable to folks is because the cost of construction, which means the land, the permitting, the materials, the labor to build the home, when you add up all those costs, it costs more than the home actually is going to appraise for in some of our communities,” said Maura Collins, executive director of the Vermont Housing Finance Agency.
“So the builder has no choice,” she said. “They’re not going to build those homes if the appraisal doesn’t support the cost of those homes.”
The bill also allows the housing agency to offer grants to middle-income home buyers who cannot afford to buy a home. Those buyers would have to pass along the grants when they sell the home. The agency also would be able to use some funds for grants to first-generation home buyers to cover down payments and closing costs.
If it passes, the bill would authorize $3 million to improve manufactured-home communities, $1 million to repair manufactured homes and make them compliant with the Americans with Disabilities Act and another $1 million in grants to build foundations and install utility connections for manufactured homes, all for fiscal year 2023.
Mobile homes “are an inexpensive element of our housing stock that is suffering in many cases from lack of attention,” said Sen. Michael Sirotkin, D-Chittenden, chair of the committee. “And we don’t want to lose those homes.”
While Sirotkin said 7,000 people live in mobile homes in Vermont, that is actually the number of lots in mobile home parks. State figures show 44,000 Vermonters lived in mobile homes in 2017, about one-third of them in mobile home parks.
The bill authorizes $400,000 in credits to applicants who want to build rental housing and $675,000 for loans or grants for owner-occupied housing, also for fiscal year 2023.
The biggest pot of money, $20 million in fiscal year 2023, would go to improve rental housing under Gov. Phil Scott’s Vermont Housing Improvement Program.
“It’s a good program that takes houses that are about to or have been taken off the market because they deteriorated to such a degree,” Sirotkin said. “And it gives an incentive to the owners of those places to fix them up and rent them for a certain period of time to lower-income people at affordable rents.”
$5 million of that would have to go to support accessory dwelling units, units built by a homeowner adding to a home or on a residential property lot around the home.
“Another highlight of the bill is accessory dwelling units as a way to build for a single-family house that may be (for) some people with their kids gone being over-housed and creating an extra unit in there,” Sirotkin said. “And it’s much less expensive than building a whole new house.”
To encourage accessory dwelling units, the bill would prohibit municipalities from requiring more than one parking space for each bedroom in an accessory dwelling unit.
The bill would also set up a registry of residential contractors.
The bill now heads to the Senate Finance Committee.
Sirotkin points out that the millions of dollars authorized in the bill are just a small piece of the money going toward housing this year.
“There’s tens and tens of millions of dollars that are going to various organizations, most prominently the Vermont Housing & Conservation Board to develop affordable rental housing,” he said.
Those funds are included in another bill, the budget bill.
Clarification: This story has been updated to clarify the number of mobile home lots in Vermont and the number of people estimated to be living in mobile homes.
