Homelessness Response Continuum (Act 143) - Overview & Analysis

Act 143 replaces Vermont’s former General Assistance hotel and motel emergency-housing approach with the Vermont Homelessness Response Continuum, administered by the Department for Children and Families’ Office of Economic Opportunity.

The act aims to make homelessness rare, brief, and nonrecurring by prioritizing prevention, diversion, shelters, supportive services, and permanent housing over prolonged reliance on hotel and motel placements. It recognizes that, as of December 2025, Vermont’s Homeless Management Information System counted 4,022 people experiencing homelessness, including 863 children.

The Details:

1. Creates a tiered homelessness-response system

   1. Level 1: Prevention and diversion services.
   2. Level 2A: Highly structured shelters, with active case management and programming related to housing, work, education, or treatment.
   3. Level 2B: Low-barrier shelters for people who cannot be served in more structured settings.
   4. Level 3: Specialized shelters for people needing services related to substance use, mental health, physical health, or other specialized needs.
   5. Level 4: Hotels and motels, intended as a fallback when other placements are unavailable.
   6. Permanent supportive housing and other emergency housing options, such as recovery residences, shared housing, host homes, master leases, and rapid rehousing.

2. Reduces, but does not immediately eliminate, hotel and motel use

   1. Hotel and motel placements remain available when lower levels of care lack capacity, staffing, or geographic accessibility.
   2. The act caps placements at 700 rooms per night from April through November and 1,000 rooms per night from December through March.
   3. During fiscal year 2027, payment is limited to the lodging establishment’s lowest advertised room rate and no more than $80 per room per day.
   4. Outside the winter period, households generally may receive hotel or motel housing for no more than 70 days in a rolling 12-month period, subject to exceptions.

3. Requires engagement with services while recognizing individual capacity

   1. Eligible households must generally complete coordinated entry, work with a case manager, develop a housing plan, and follow program rules.
   2. Participation requirements apply only “to the extent of the household’s ability.”
   3. The act requires reasonable accommodations for people with disabilities and prohibits discrimination under federal disability-rights laws.

4. Establishes eligibility, prioritization, and due-process protections

   1. Eligible households must be homeless and physically present in Vermont with an intention to reside in the state, demonstrated through active participation in a housing, employment, or other recognized plan.
   2. Priority goes to households including older adults, people with disabilities, children, pregnant people, survivors of violence, trafficking survivors, and people facing eviction through no fault of their own.
   3. Applicants denied, reduced, suspended, or terminated from services must receive written notice and may request a fair hearing.
   4. Services generally continue during an appeal if the appeal is filed within 14 days, unless there is a safety concern.

5. Adds local and cold-weather options

   1. Municipal grants will support communities with high levels of unsheltered homelessness.
   2. Municipal and emergency cold-weather shelter may offer low-barrier, time-limited, life-sustaining shelter with minimal reporting and without requiring case management.
   3. Cold-weather shelter is triggered when the National Weather Service forecasts temperatures at or below 10°F, including wind chill, across most of the state.

6. Creates a rental-assistance bridge program

   1. The Vermont State Housing Authority will administer a program intended to help households move into permanent housing when federal rental assistance is unavailable.
   2. Assistance cannot cover the full rent and is not a permanent voucher.
   3. Payments go directly to landlords.
   4. The state must evaluate consolidating existing agency voucher programs into a unified housing-voucher framework and report by January 15, 2027.

7. Requires transparency and performance reporting

   1. Annual reports must track households served, length of participation, transitions to permanent housing, diversions from shelter, hotel and motel use, return-to-homelessness rates, regional gaps, costs, and implementation barriers.
   2. Monthly public reporting must include program expenditures by service level.
   3. Community partners receiving grants must participate in coordinated entry and measure outcomes such as diversion success, time to housing, and housing retention.

8. Appropriates approximately $82.7 million for fiscal year 2027

   1. Major allocations include about $39.3 million for Housing Opportunity Grant Program operations.
   2. $23.4 million is designated for emergency hotel and motel housing.
   3. $4$ million supports shelter development.
   4. $4.2 million supports permanent and family supportive housing.
   5. $3$ million supports rental assistance.
   6. $2.4 million supports case management.

Analysis:

Act 143 is a major redesign of Vermont’s homelessness policy. Its central premise is that the state should not rely indefinitely on hotel and motel rooms as emergency housing. Instead, it seeks to create a continuum in which prevention and diversion are the first response, shelters provide different levels of support, and permanent housing becomes the intended outcome.

This approach has clear advantages. Hotel and motel placements are often costly and may provide little connection to services or long-term housing opportunities. Requiring case management, individualized housing plans, provider performance measures, and public expenditure reporting could make the system more purposeful and measurable.

However, the act’s effectiveness will depend less on its structure than on its implementation. Vermont must develop enough shelter capacity, accessible placements, case-management capacity, rental assistance, and permanent affordable housing options to make the new hierarchy functional. If those resources do not materialize, the new limits on motel use could become restrictions without viable alternatives.

The law attempts to balance fiscal accountability with humanitarian protections. It retains hotel and motel options, creates cold-weather shelter requirements, and includes appeal rights and disability accommodations. Still, the state will need to monitor whether households are actually moving into stable housing or instead cycling among shelters, motels, unsheltered locations, hospitals, and correctional settings.

Current Status:

Act 143 was signed by the Governor on June 16, 2026. Most provisions take effect July 1, 2026, however:

• Emergency rules for the new continuum take effect September 1, 2026.
• The Department for Children and Families is expected to implement the program as fully as possible during fiscal year 2027 and develop full implementation capacity for fiscal year 2028.
• Vermont must work toward merging its two Continuums of Care into a single statewide continuum by October 1, 2028.

Last updated: 8/1/2026

DISCLAIMER: Generative AI used to assist in the production of this report.