This story by John Flowers was originally published in the Addison Independent on July 9, 2026.
MIDDLEBURY — The town of Middlebury is dipping its toe into a new state program designed to help Vermont communities unlock housing opportunities by investing in critical public infrastructure.
It’s called the Community and Housing Infrastructure Program, a statewide tax increment financing tool created in 2025 and launched in January of this year. The Middlebury Selectboard will soon review two already-approved local housing projects seeking CHIP consideration: Phase two of the new Stonecrop Meadows neighborhood that will host more than 200 units off Seminary Street Extension; and the so-called Middle Housing, a four-story building slated to host 35 apartments and a restaurant at the corner of Route 7 and Middle Road.
Administered by the Vermont Economic Progress Council, CHIP allows municipalities to finance essential infrastructure (like water, sewer, roads and stormwater systems) that supports new housing development. It also allows towns and cities to access long-term financing without raising local property taxes, capture a portion of new property tax revenues from future development, and invest in public improvements that directly support the creation of homes.
Here’s how it works, according to Vermont’s CHIP webpage:
• Municipalities apply to the Vermont Economic Progress Council to designate housing development sites.
• Once approved, towns can retain a portion of new property tax revenue to pay for infrastructure investments to serve the new housing developments for up to 20 years.
How much of the new property tax revenue can the town use for infrastructure projects?
Not less than 85% of new municipal tax increment; up to 75% of education tax increment for market-rate developments; and up to 85% of the education tax increment for developments with at least 15% affordable units.
Both rental and homeownership projects are eligible, and debt may be issued by municipalities, developers or third-party sponsors, according to CHIP’s ground rules.
“The great thing about CHIP is that it allows those improvements to be funded in a way that isn’t ultimately passed along to the end user, which makes it a great tool,” said Alex Armani-Munn, executive director of the Addison County Economic Development Corp., which is helping Middlebury and the two developers — Philip Rosenzweig (Middlebury Apartments) and Summit Properties (Stonecrop) navigate the CHIP process.
“Conversations with these developers have been ongoing for a few months to really see if CHIP is a tool to help them create the public infrastructure needed to make these projects viable at price points that make them affordable — especially with Stonecrop,” Armani-Munn said.
He acknowledged the Middle Housing project won’t contain an affordable housing component.
“But with the high cost of housing, anything you can remove from the pro forma that would be a burden to the developer and ultimately pass on to the resident — if you can remove that — then that helps keep those rents at a reasonable rate,” Armani-Munn said.
It was in May that Armani-Munn and town staff informed the Middlebury Selectboard that Rosenzweig and Summit were interested in pursuing CHIP tax increment financing for their projects.
“Then the hard work began compiling those applications,” Armani-Munn said.
A CHIP application has three components, he noted: A narrative of the housing development plan and needed infrastructure, a site plan, and a housing infrastructure agreement detailing the town’s expectations in return for the tax increment financing benefit that will flow through CHIP.
A CHIP application can’t proceed without town support.
“There are three main ingredients to CHIP,” Armani-Munn said. “Just like you need oxygen, fuel and (combustibles) to create a fire, you need housing, infrastructure and municipal consent for CHIP.”
He stressed that CHIP revenues can’t be used to build the housing itself; it must be limited to infrastructure and any administrative or professional costs required to prepare and administer a CHIP application.
“It ensures the project is paying for itself — not just the infrastructure, but also the administrative burden,” Armani-Munn said.
Debt related to CHIP may be issued by municipalities, developers or third-party sponsors.
“At this point, the direction we’re going both with Stonecrop and the Middle Apartments — should they proceed with applications — is that the municipality will not be the debt sponsor,” Armani-Munn said.
Plans call for the Addison County Economic Development Corp. to host workshops — involving town officials and developers — for both the Middle Apartments and Stonecrop CHIP applications. The first one, to be held later this month, will focus on Stonecrop. Selectboard members Andy Hooper, Farhad Khan and Izabel Gogarty will also attend.
Neither workshop will be public, but there will be a public hearing for any CHIP application the selectboard endorses. The application would then make its way to VEPC for potential final approval.
Armani-Munn said he believes the financial details of a potential Stonecrop CHIP deal would be available at the upcoming public hearing, and he believes the benefits to the town could be “substantial.”
Rosenzweig reported an estimate of nearly $1.1 million in potential infrastructure costs related to Middle Housing.
“Certain additional infrastructure costs of my project (which are for the communities’ benefit) would need to be passed on as additional rent cost to tenants and but for the CHIP (if granted) rents would have to be higher and/or certain infrastructure would have to be limited/reduced or downgraded,” Rosenzweig said through an email exchange. “So, CHIP would afford my project and Stonecrop with some additional financial resources to do some of the infrastructure which will ultimately benefit the town.”
Efforts to reach Summit COO Zeke Davisson were unsuccessful as the Independent went to press.
Phase one of Stonecrop is well underway, consisting of 69 homes, with 35 rentals (28 affordable, seven market rate) and 34 for-sale homes (up to 30 middle-income or affordable). Phase two, related to the CHIP application, would assist in the financing of infrastructure to support up to 80 additional homes — including at least 25% middle-income or affordable homes. The overall expected development value for phase two is $50 million, according to Stonecrop’s project narrative.
If all goes according to plan, the Middlebury Selectboard will approve the Stonecrop CHIP application in late July, then forward it to VEPC for its review. Armani-Munn said Stonecrop could be the first CHIP application VEPC receives. VEPC will conduct a Stonecrop site visit and then have 90 days in which to approve or deny the CHIP application.
The Middle Housing CHIP process will unfold this summer and fall.
