As rents skyrocket, massive federally funded rental assistance program to ramp down in Vermont

Rental properties in Burlington in April 2019. Vermont's Emergency Rental Assistance Program will stop taking new applications for rent and other housing expenses beginning Oct. 1. File photo by Glenn Russell/VTDigger

Updated at 8:06 p.m.

A pandemic-era rental assistance program that has doled out more than $160 million in federal funds to keep Vermonters in their homes is abruptly set to begin ramping down, booting thousands as soon as Oct. 1.

The Vermont Emergency Rental Assistance Program will also stop taking new applications for rent and other housing expenses on that same date, according to the website for the Vermont State Housing Authority, which administers the program. Utility applications will be accepted through the end of the year, but utility payments will end Dec. 31.

Participants who receive other types of permanent rental assistance, like Section 8 vouchers, will no longer be eligible for assistance from the program, known as VERAP, as of Oct. 1. Existing VERAP participants will receive reduced assistance based on their income as of that date. 

In a press conference announced just hours before it was to take place, state officials said that they had no choice but to significantly reduce the program’s scope in order to keep at least the most vulnerable Vermonters housed through the winter. 

“The funds are running low. And if we continued at the current programmatic structure, some of our programs would be out of funds before the end of the calendar year,” Agency of Administration Deputy Secretary Douglas Farnham said.

VERAP is currently helping 12,613 households with an average monthly benefit of $964 a month, according to Kathleen Berk, the executive director of the Vermont State Housing Authority.

The housing authority predicts that 3,015 households will no longer be eligible for assistance on Sept. 30. Another 5,396 households will see benefit reductions then and be pushed out entirely on Nov. 30. Some 4,200 households are projected to remain in the program as of Dec. 1. 

State officials said the totality of the changes will extend funding availability from Dec. 31 to March 31, 2023 — at which point the program will shut down completely.

Administration officials said they had initially believed roughly $320 million provided to Vermont for rental assistance from the federal government would carry the program through the end of 2023. But new guidance released from the U.S. Department of Treasury in the spring compelled them to begin pushing the money out more aggressively, they say, in order to avoid a clawback from the feds.

While state officials knew months ago they would need to spend the money faster, they argued they didn’t know how successfully they were doing so until they took stock at the end of July.

“The reason that everyone's finding out about this now is that we didn't have the data,” Farnham said. “We didn't have the actual spending recorded to really update our projections to know we were going to run out of money before the end of the winter.”

That’s not the only big change coming to Vermont’s massive federally funded emergency housing effort. Vermont’s transitional housing program, one of the major programs housing people in hotels and motels, will also stop taking new applications beginning Oct. 1, state officials said Wednesday. About 1,500 Vermonters are currently housed through the program. 

The state will also begin capping how much it reimburses motels in the transitional program to $175 a night. Officials acknowledge that could mean some motels might stop participating, although they pledged to try to keep them in.

Because the Federal Emergency Management Agency stopped picking up the tab for the state’s transitional housing program on June 30, that program is now also supported by the same pot of money paying for rental assistance. State officials said they now anticipate the transitional housing program will exhaust available federal funds on March 31, 2023.

“That timeframe gives us the opportunity to work with our partners and our community partners and our legislative partners to understand what tools and resources are available to support those households,” said Sean Brown, the commissioner of the Department for Children and Families. He said he hoped to have a proposal “ready to go” once the Legislature reconvenes in January.

Vermont is in the midst of a well-documented housing crisis, and the sudden announcements come as the state records one of the lowest rental vacancy rates in the country and rents skyrocket across the state.

In a press conference held later Wednesday afternoon, Brenda Siegel, a housing activist and the Democratic nominee for governor, stated the obvious: There would be evictions.

“Our vacancy rate is just over 2%. There is no housing,” she said. “There will be more people without housing, and there will be immense harm to low- and moderate-income people across this entire state.”

Siegel blasted the administration for making the announcement with so little notice and failing to bring the problem to lawmakers months ago, when they were in session and may have intervened.

“The solution would have been proper planning and proper budgeting in this case, and working with the Legislature who was willing to work with them,” she said.

Legislative leaders did not stage their own press conference. But in a joint statement released to the media, House Speaker Jill Krowinski, D-Burlington, and Senate President Pro Tempore Becca Balint, D-Windham, expressed concern.

VERAP “has been incredibly beneficial to Vermonters, but we knew that it would not be available in perpetuity,” they wrote, adding that “the changes the Administration announced today are unexpected, and may create serious problems for many renters who were relying on continued support to get back on their feet.”

“We appreciate the Administration’s efforts to prioritize funding to protect those currently in transitional housing in hotels and motels, and to help extend benefits through the winter months,” the Vermont House and Senate’s top officeholders continued. “However, we are very concerned that the proposed changes happened without consulting an engaged group of stakeholders who have been working on these issues for years.”

Ken Russell, the executive director of Another Way community center and the chair of the Montpelier homelessness task force, attended Siegel’s press conference. He agreed about the likely impact.

“There are going to be hundreds of people out into the streets statewide,” he said.

As to whether lawmakers would have wanted this to land in their lap? He’s less certain.

“This is a game of hot potato. This whole population — it’s hard for folks to hold responsibility for it. And it’s like: the left fielder and the right fielder, the ball falls in between,” he said. “That’s a lot of what’s going on here.”

The program has been a “giant anomaly,” he said, and one made possible by an unprecedented and temporary influx in federal cash.

“We’re all screaming for there to be more forward planning. But the cost of housing — it's hard to get around that,” Russell said.

Are you facing cuts to rental or utility assistance due to changes in the state program? Email [email protected] to share your story. (Your response will not be used without your permission.)

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Lola Duffort

About Lola

Lola Duffort is a political reporter for VTDigger, covering Vermont state government, the congressional delegation and elections. She previously covered education for Digger, the Concord Monitor in New Hampshire and the Rutland Herald. She has also freelanced for the Miami Herald in Florida, where she grew up. She is a graduate of McGill University in Canada.

Email: [email protected]

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