Housing Inventory Study - April 17, 2024

Chairwoman Ram Hinsdale opened testimony in the Senate Economic Development Committee on Wednesday afternoon saying that she wanted context on the “current unmet housing need.”

Pollaidh Major (Director of Policy and Special Projects, Vermont Housing and Conservation Board) lead a presentation highlighting VHCB’s work. They have assisted 3900 families with housing since 2020.

The Committee wanted to see where roadblocks were for making progress towards housing goals. They were interested in permits, appeals, seasonal delays, etc.

Ram Hinsdale asked about the “rough costs per unit” of their projects. Major explained that they spent $240M on these projects.

NOTE: This is over $61,500 per unit of housing.

Senator Brock wondered if there were any federal changes that would affect the leverage of their programs. Many of the VHCB programs have federal matching, but there don’t appear to be any new funds becoming available from the feds.

Most of the state’s affordable housing is funneled through VHCB or the Vermont Housing Finance Agency. There is a helpful chart put together by the Joint Fiscal Office that compares them.

Maura Collins (Executive Director, Vermont Housing Finance Agency) presented next and also shared quite a bit of data. She noted that federal tax credit programs are the “largest creator of affordable rental housing in the country and the 5th largest tax expenditure in federal government.”

Her presentation also showed that increasing costs mean that they are able to build fewer units. Their average unit cost has increased from $309,740 in 2019 to $520,284 in 2024. However, she highlighted some of the benefits of home ownership programs, which are actually cheaper on a per-unit basis because of private capital investment, and they also unlock Private Activity Bonds and a tax-exempt bond VHFA has been administering for decades. Coupled with low-cost borrowing these unlock tax credits they can leverage with ARPA funds that have helped them move the needle.

Senator Harrison commented that she was “hearing is it was funding Not policy that helped.” She wondered what would be needed going forward.

Ram Hinsdale gave a lengthy statement explaining they will not obviously be extending these high ARPA funding levels this year. However, she promised there will be more funding next year so they can reach the “7000 units per year needed.” She added that this year they are “doing the heavy lifting in permit reform because that brings down the timeline and the cost of doing all that and then I think many people will feel more comfortable in making that investment stretch as best we can.”

Alex Farrell (Commissioner, Department of Housing and Community Development) briefly spoke about the Vermont Community Loan Fund which contained about $7M in federal funds.

Patrick Titterton (Fiscal Analyst, Joint Fiscal Office) provided data on combined investments of different homeownership programs for FY2024, which totaled $41.2M and yielded 393 housing units ($104k per unit). Over half of the assistance came from the new Middle-Income Homeownership Development Program, which provides financial incentives for the construction and rehabilitation of homes purchased by families under 120% of an area’s median income.

This was compared to the overall rental project list which totaled $580.3M in project development, which yielded 3900 units ($149k per unit). Several projects were funded at or over 100% of development costs by VHCB and VHFA.

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