2025 VTGOP Convention: Policy Panel on Housing

talk about where we were, where we're going, things we can do differently, and uh I'll let Sarah introduce herself as well. >> Good morning, everyone. I'm Sarah Mirhoff. I'm the director of advocacy and communications for the Associated General Contractors of Vermont. So, we're the Vermont chapter of a nationwide association that represents the whole of the construction industry. And here in Vermont, that means that we have more than 200 members, uh, general contractors and folks affiliated with the construction industry. Um, and we're trying to build a better Vermont. And of course, as you all know, that includes housing, which is kind of the foundation of everything. So, do you want to talk maybe a little bit about some of the work that was done this past legislative session? And of course, Senator Matttos before he was a state senator, he was also a house member. >> Yeah. >> So, uh, he has history going back. So, maybe let's talk about recent history. >> Yeah. >> So, over the past I've been in the House, uh, I was there 7 years and then this past year I was uh, moved over to the Senate. So, I've been around for eight years now and housing has always been a a key issue in the state house and we haven't seen really population growth until COVID happened where we had migration into the into the state and that was you know I think it was 8 to 10,000 people over the last 10 years. Um, but what we're finding is that people are staying in their houses longer because we're an aging population. We have people that are instead of two, three, four people living in a in a dwelling unit, you're having one, maybe two people live in a dwelling unit. So when you hear that there's a housing shortage, but our population isn't going up, it's because how we're treating housing is differently. People are living alone and things like that. Um, so what we've done in the legislature just this past year is the CHIP program. So it's community housing infrastructure. And has anybody heard of the TIFF program in here? It's a very complicated program, but it's a very useful tool for municipalities to utilize this TIFF program to grow their grand list. So, it encourages development in areas. Milton, for instance, we had two of them. Um, and one of them was actually able to bring in Husky to Milton and that was about 300 employees and they're still there thriving today. And what that does is it freezes your grand list at a point in time and then you're able to use the increment on the increase in those tax bills to be able to help fund the financing of your infrastructure. So what CHIP did for this infrastructure program, some people would call it like a mini tiff where you could have smaller municipalities because they are very labor intensive to administer and be able to follow and audit and things like that. So, the CHIP program will allow smaller municipalities to be able to utilize this tool to help private developers increase the housing supply in Vermont. And that will usually the hardest things to get going off the ground are your roads, your sewers, your water. Um, getting that done before you can even put a shovel in the ground to build the house to be able to sell or rent. Um, so what this program will do will make it more attainable for municipalities and developers to be able to utilize this mini tiff chip program to be able to expand our housing inventory in Vermont. And I'm I was on the uh um what is it called? Conference committee in the for the Senate side. >> Yeah, I know. I did. It was it was a good time. Um so we we got involved. It's going to be a $2 billion investment over 10 years, which is the biggest investment I think that we've had. And it's all in retaining part of a tax bill. And so, it's not going to be money out of our pockets. Some will say that it's money out of the education fund, but that development wouldn't have ever happened anyway, so the money never would have been there. So, this is going to be a great tool to be able to grow our grand list and more importantly be able to grow our housing in Vermont that I'm really looking forward to and I think Sarah can probably touch on it a little bit more. Yeah. >> One of the things that I think was so forwardlooking about the CHIP program is that it was in part a reaction to this kind of reality that we've all seen across Vermont, which is that our largest communities are able to kind of either foot these bills or administer these programs. And there's a lot of disparity honestly between um the kind of halves and have nots in the state of Vermont. Um, Burlington will always be able to to find money uh in some couch cushion somewhere, right? To be able to finance their next high-rise. Um, that is not always the case in a place like St. Johnsbury maybe or I don't know, rattle some off for me. Uh Milton's pretty good at finding money, but um you know, our smaller towns that are around the around the state, maybe a smaller Swanton or Sheldon up in Franklin County doesn't have the the town resources to be able to go through a big tiff project. >> Yeah. And um we know that they we need perhaps fewer actual units in some of these smaller communities. you know, some of these tiny communities of 300 or so people don't necessarily need the 150 unit um high-rise that's going up in downtown Burlington, but they do need a duplex. They do need maybe a quad plex, something like that. Something that very essential is that it fits the character of the local community and it has community buyin. But so many of these communities are finding that it's really difficult to finance these projects. It's really expensive to build in rural Vermont and to kind of get that last mile and I I say that hypothetically. It's not always an actual mile, but that kind of last mile of infrastructure. So that's what we're talking about with um CHIP is the the roads, the the sewer line um or the septic, the water, the electric, the fiber, sidewalks if if appropriate, that sort of thing. So, I think Chip was a great response to what we've been seeing a dynamic in across Vermont is that some of our larger municipalities are making way. I mean, I think they still have work to do. Certainly, it's not like things are are sunny and perfect in our larger communities, but um there's there's a widening gap, I would say, between between the the large and the smaller. Um and Chip, I think, was a really good response to that. Um, what's on your mind this coming legislative session in terms of where do we go from here? We just had this historic $2 billion over 10-year future investment. Again, I want to emphasize that it's not like $2 billion just straight out of our pockets. It's leveraging hypothetical growth down the road. Um, but what's next? Would you say? >> Yeah, I think uh I think next year is going to be definitely a pivotal year for housing. Um, and it's not always about the money. We don't always have to put money out there for developers, nonprofits to to apply for and get grants. Um, it's things about um regulations, whether it's Act 250, uh, wetlands. I mean, so I'm in I'm in residential real estate. I do property management. I sell houses. I do excavation. And what I'm seeing out there is I have one client who wants to build a house. Septic's already there. well's already there. They want to build a house on the property. Um found out where they wanted to build their house. Engineer came out and said, "Oh, there's a wetland right there." And all it is is a little lowlying area. So, he's got to move his house ahead another 50 ft. Which kind of changes what he wanted to do on the property. Um so, it's things like that that are popping up out there where we need to, you know, instead of a 50ft buffer, maybe it's a 25 ft buffer. I know the the governor's put out an executive order to be able to freeze those in certain areas. I think it's tier one 1A and 1B. Um being able to freeze those wetlands and be able to spur development. I was talking to a manufacturer who wants to develop a large parcel of property and they have to take away a swath of 100 ft of their land for 300 ft long because there's a little ditch that runs through it. Um, so if we could tighten those those boundaries up for wetlands in a in a smart way in a in a way to be able to promote growth and be able to use these areas around the state that want to see growth because this wasn't Chittening County that this this development was going to happen. It was up in Loyal County which I would say would need that development to be able to increase their workforce up there and then with that would be housing. So we would need more housing up there and that's where the chip program also comes back into play where being able to expand that. So it's not always about the dollars and cents. It's about making regulation more attainable for the developer to be able to build those units for people to live in. And the thing is is that all that takes time and money. Going through act 250 or wetlands delineations, engineers, going through all that is a lot of money before you even put a shovel in the ground. And that all gets passed on to the consumer. Um, when we talk about affordable housing, when I started in real estate, it wasn't, you know, it was about 10 years ago and you could buy a house for $200,000, but you're up in Highgate and it was a new construction. Now in uh in Highgate, that house is probably $350 $400,000 and that's that's not attainable. I mean, I bring it back to uh child care. The income guidelines for child care to be able to qualify for a subsidy is lower than the income required to actually buy a house in Chittening County, the median house. So you are automatically, if you're living in Chittening County, buying a median house, you will not qualify for the subsidy. And I'll tell you that, you know, child care, I have two of them there, one and a three-year-old, and it's about 37,000 a year. So, um, being able to create that housing in a price point that's actually attainable for for folks not just in Chittney County, but around the whole entire state, um, is huge by using regulations that can be relaxed and be able to spur on the development. And I think the governor has done a really good job with his executive order being able to freeze those wetlands, spur some development, and also looking forward into this next year. Um, continuing on putting those wetlands regulations into into law to be able to go in perpetuity because right now, even with the act 250 with the tiers, that's only temporary. That's not permanent. That can revert back. I think it's 2 years. >> 27 years. >> Yeah, 27. That's going to revert back to what it is now. So, we need to push forward as a as a caucus in the House and Senate to be able to get those things over the line so they go go ahead into the future years and not just stop in in two years. to kind of add on to the the point that we can't buy our way out of the housing crisis. There was a joint hearing between the House and Senate this week where they talked about the housing landscape right now and um it largely focused on the the kind of fallout from developments happening in Washington DC. I don't know if you guys have heard about this little government shutdown uh that we're in the midst of. Um, and so there was quite a bit of talk about how that affects grants and, you know, housing vouchers and things like that. Um, but the kind of takeaway that I took from this this joint hearing was that um, funding from DC can be volatile. It can change with an administration or with policy changes and we can't bet on it. We certainly can never bet on a kind of, you know, windfall that Vermont saw in the COVID years and immediate past. Um, we're never going to in our generation, to be perfectly frank, get that kind of uh cash from from DC. Uh, and we can't buy our way out of this. Um, if we could, we would have already, frankly. And so, the next logical takeaway is that we since we can't buy our way out, we have to make it cheaper to build. We have to make it cheaper. We have to make it easier. Um we have to ease the the regulations and restrictions on builders. Um one thing that we can never quantify or know with certainty is the number of housing projects that we would have if not for all of these regulations that we have in place. Because I will tell you as someone who works with builders that a lot of them look at they see an open field and they they live in their communities. They live here, right? and they know that, god, we could really use the housing. We could really use some young families and young workers moving in here. Wouldn't that be a lovely, you know, development, a culde-sac, whatever. And then they know just by hearing or or looking or, you know, reading the room that it's just going to be such a lift to actually again get a shovel on the ground and actually even get to the point where you can build. And they say, "Nah, not for me." Like that. That's just too heavy a lift. I'm not going to do that. We will never know how many wouldbe housing units we would have in the state if not for this kind of I would say a chilling effect that we have on developers. Um it's impossible to quantify and it's a real shame and I for one am not comfortable living in that kind of liinal wouldbe space at this point. I think it's high time that we move forward um and we decide that we need to move past that um you know could be would be mindset into actually making this work and and getting more units on the ground so that young people like us we're both young can live here and stay here. Um you brought up act 250 and I'm I'm glad that you did because um the interim exemptions are indeed set to um expire in 2027. For me personally, that's one of my first priorities once we get back uh in that cursed building in January. Um is moving out those uh interimm exemptions because the good news in all of this, I know it seemed like a lot of doom and gloom. The good news is that we know that those interimm exemptions have worked. Um there's been some really good news coverage of that. Um, we know that it has spurred growth and it has made it easier to build and so we should keep those good times rolling. And some people may think, you know, oh, they expire in 2027. Isn't this a 2027 problem? No, because builders are trying to schedule out their building agendas and um plans, I can assure you, much further than just one year out. Um, and they need that certainty that they're going to be able to build those projects that they want to build in those areas and they're not going to have to jump through, you know, flaming hoops of fire in order to do it. Um, so that's a really high priority for us this coming legislative session. and we can't kick the can on that one or else again we're going to get stuck in this kind of doom spiral of wouldbe projects that can't get off the ground because people think it's just not worth it for me to try that. So, >> and one thing I'll add just on the act 250 is that what happens with act 250, you know, before these um interimm exemptions was a developer would look at a piece of land that's prime for, you know, 25 units and they would look at it and say, well, I could build nine today because I wouldn't trigger act 250 and I wouldn't have to wait one two years, go through all the process. So what what I saw in my experiences was underdeveloped uh underutilized land that could really spur development because developer would not want to go through that headache of act 250 when they could get it on the ground get it up running because in the housing market um things you know we think they move slow but they move pretty fast you know this year I've seen houses that were still going under contract in a couple of days over asking and now 3 months later houses are sitting on the market longer. Prices are getting corrected. They're coming down. And what I'm finding with the ACT 250 is just underutilizing that land where you could actually build more units, but developers don't want to, you know, risk that money and put it out there for the time. And when they think they're going to sell a house at $400,000 and then the time comes around and it's only worth 350, that could be make or break on a development. So, being able to keep those interm exemptions in place going forward after 2027 is going to be huge. Um, and I think we got about 10 more minutes. I didn't know if Sarah wanted to open it up if anyone had any questions, thoughts, comments, concerns, ideas. You know, we're going to be back in the building in January. Um, and I'm always, you know, my number one goal is to listen to everybody and anybody. And I see a hand up in the back if she wants to come up. >> I sure can. All right. I am Susanna Bham. I'm on the development board in Marsville, Illinois. And we have committed numerous apartment complexes. But there are two other issues that I look for housing. Number one, the Airbnb. We are seeing people that rent that have a lease and they are put out of their um homes where they're renting because the owner has turned the building into their home into an Airbnb. I think that's hurting rentals in in Vermont. Also, senior complexes. We do not have enough senior living. There are many seniors like me who own a large home, but I don't have a place to go to unless it's Wake Robin where it's a $500,000 or a million dollar volume. And I like the push for more senior housing because there are seniors that would give up their homes to go there and that would make homes available for sale for a young couple with children. >> Yeah. >> Thank you, Suzanne. Was it? >> Yeah. >> Yes. Uh you bring up a very good point that uh about the senior housing. I'll touch upon that first. Um, senior housing is rarely talked about and you know when I'm I primary I do my work in Milton and right now I was just yesterday I manage a senior housing 55 plus community. It's all duplex styles, so you just share one wall with somebody. And I've sold a few in there recently, and they are gone in about two, three days, and they're selling for good money. And exactly what Suzanne was talking about is that people are staying in their houses longer, and that could be recouped by a, you know, a family moving in or or whatnot. And that is something that needs to be talked about more because not everybody wants to go to an assisted living facility. They still want their own space. They still want to be able to, you know, do whatever they want without having to be in an apartment complex. They want to be able to have their own smaller house where they don't have to maintain maybe the lawn or the the driveway or what have you. Um, and to your first point about Airbnbs, um, there is a report that's going to come out, I believe, this year, um, uh, that will kind of look at what those short-term rentals are because a lot of a lot of talk in the state house is making a new classification in the, uh, grand list for those short short-term rentals and taxing them at a higher rate. Um, I don't know if that's the best way to go because there are Vermoners that have invested in short-term rentals before any of this was talked about in being able to provide another means of income whether it's a ADU on their property or buying a place that's in, you know, like Stow or Sugar Bush or where where have you. So, the verdict for me is still out on short-term rentals. I think the biggest thing that um I would like to see is being able to just provide more housing to be able to get people into a rental or purchasing a property that's more affordable for them without having to put an additional burden on somebody that's utilizing their property as a short-term rental. Um cuz what was it last two years ago there was that 3% search charge put on and one of our biggest industries in Vermont is tourism and what we're finding is that people do really like having their own space being able to go to that short-term rental be able to cook their meal, hang out, and there's a lot of cool amenities at these things. So verdict's still out for short short-term rentals for me. Um, I'm really eager to get that report back to see kind of what that percentage is because long-term rentals are definitely needed. >> Oh, yeah. Sarah, >> on the back to the note of of senior housing, um, I live in Berry City. I live in my 120year-old house because of new construction. Um, and that's because the old owners of my house were a couple uh in their 70s. they couldn't maintain their three-bedroom 120-y old house anymore and they built a new house. They, you know, downsized to a smaller place that was built right on the outskirts of um Berry Town. They are the second to I've been to their house. They are the second to last house in that development. That's how close I was to not getting my house. So, this is a pretty near and dear topic to me, frankly. Um, because I frankly would not have been able to to buy my home that I love so much and start the rest of my life with my husband if it were not for new construction. And the who knows how many more homes there um could be opened up to folks like my husband and I if that were only possible. We look around our neighborhood and it obviously it's not I I'm not trying to rag on folks in their golden years or anything obviously, but uh our street is filled with folks who are retired and they have two three empty bedrooms in their homes and I would really love to see you know maybe a little bit more intergenerational nests to the neighborhood and um just allow the the foot in the door for folks like me to be able to to start the rest of our lives. Chips are great. When you when government injects money, >> so CHIP doesn't necessarily allow a bypassing of Act 250. It's not on the regulatory side. It's on the financing side and in terms of it's not injecting money so much as it's leveraging future revenues and so it it's not as if we're you know writing kind of a blank check on the >> no so chip will come into effect this coming year. Um, so we haven't seen the results of that program yet, but what what we're finding is that um being able it's not going to be able to bypass Act 250. Generally, these projects may be taking place in a tier 1A, tier 1B um area that can spur more development by having those interm 250. Instead of 10 houses, you can have 25 of them. Um, and being able to retain that portion in the CHIP program for the infrastructure to satisfy the debt is what's going to help create a lower cost of housing. And I think one thing that you're talking about is, you know, cost per square foot is one of your big things that that you brought up in your question. I mean, we saw on the the news the other day, the affordable housing that was open down the street. What was it? South Burlington. Burlington. Um it was about5 $500,000 for for a one unit which is completely unattainable. Um you're in an apartment building and it's half a million $550,000. I can say that a private developer can get that number down a lot lower. And I think to your point to bring prices down even more is going to be getting a workforce which we need housing for. By having a larger workforce in the trades is one of my big things. A lot of my good friends have their own companies, electricians, plumbers. um and they're busier than ever. Um so if we make it affordable to come to Vermont and bring more trades people in because that is an aging demographic, those folks in the trades and I think Sarah could probably talk about that more. Um but the prices that are out there for the trades right now just from 8 10 years ago are astronomical and I think that's part part of the big problem for the higher cost in housing. Uh there's two two portions of CHIP. One will be affordable housing which you could retain more of that increment. So you'd pay down that loan faster or you can just have market rate whether it's a rental or selling. So there's going to be two two different lanes for CHIP. Wait. Oh, it's it is 9:30 and we were supposed to stay right on time. Patty is keeping track of that today and I don't want to upset Patty first thing in the morning. So, I thank everybody for being in here listening to Sarah and I talk and uh we look forward to the rest of the day and thanks for coming out today.