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‘A slight sigh of relief’: State officials say motel rate cap won’t displace residents

A woman stands in a crowded room and speaks on the phone
Glenn Russell
Housing advocate Brenda Siegel at the Statehouse in Montpelier on Friday, May 12, 2023.

This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.

As the first of the month approached, homelessness advocates and service providers braced for hundreds or thousands of people to potentially lose their state-subsidized rooms through Vermont’s emergency shelter program. A new daily cap on the amount the state pays motels – slated to go into effect today, even though it has not yet been signed into law – had many worried that hotels and motels would abruptly drop out of the program, leaving the Vermonters they shelter out in the cold.

But that widespread crisis appears to have been averted. After a hectic few days of last-minute negotiations, state officials and advocates now say the vast majority of hotels and motels have agreed to the $80 daily rate cap, at least for now.

“No Vermonter is losing their hotel space because of the rate negotiations,” said Miranda Gray, deputy commissioner of the Department for Children and Families’ economic services division, in an interview Friday morning.

A small number of lodging establishments, primarily in Rutland County, did not accept the cap, according to Gray, but the state is moving those households into other accommodations nearby. She did not provide an exact number of households that have needed to move, but said it is “pretty insignificant,” and added that even some of the holdout hotels are now coming to the table to negotiate.

Vermonters who had braced to lose their shelter today say they can rest a little easier.

“The amount of stress that we’ve all been under for the last however many weeks – you can't put that into words. The fact that nobody slept, nobody can eat…we just don’t know what’s going on,” said a tenant at the Days Inn in Colchester, who spoke on condition of anonymity for fear of jeopardizing her housing.

A few weeks ago, staff at the hotel had indicated to her that the Days Inn might need to pull out of the program if the cap took effect. And as recently as Tuesday, the tenant said her family had gotten word from the state that they could only renew their voucher until Friday. Now, the family has heard they can stay until at least the end of the month.

“Now we can breathe a slight sigh of relief – that we have a little bit longer to try and find permanent housing,” the tenant said Friday.

Gabe Handy, who owns the hotel, could not be reached for comment.

Motel and hotel owners acquiesce

Other hotel owners who had previously voiced their opposition to the proposed rate cap have changed their tune.

Anil Sachdev, who holds an ownership stake in several hotels across the state that participate in the emergency housing program, told VTDigger/Vermont Public last month that the maximum rates under consideration by the Legislature were “not acceptable” and too low to sustain “the cost of operation and the cost of infrastructure,” along with insurance costs.

But reached by phone Thursday, Sachdev said he and his colleagues have accepted the cap. Asked what changed his mind, Sachdev said the people staying at his lodging establishments – some for the past three years – “have become a family.”

“If we say no to them – I think that is not justice for them,” Sachdev said. “At this time, the cold weather – putting them out for money reason shouldn’t be considered.”

(Last month, the Vermont Attorney General’s Office determined Sachdev had improperly withheld security deposits from motel residents participating in the emergency housing program.)

Lawmakers began considering capping the nightly rate the state pays hotels and motels participating in the state’s emergency housing program in January. They argued implementing a cap could generate savings for the costly program, and members of Gov. Phil Scott’s administration contended that a cap could provide leverage for the state to eventually lease or purchase the buildings and convert them into longer-term shelter or housing.

On Tuesday night, a key panel of lawmakers approved the new $80 cap – with March 1 just days away.

On Wednesday morning, Brenda Siegel, executive director of the group End Homelessness Vermont, woke up “extremely overwhelmed.”

Siegel, who keeps in close touch with motel owners like Sachdev, said she was under the impression that, as of that morning, few had agreed to the cap. The day prior, members of the Scott administration told lawmakers that upwards of 400 rooms – or about a quarter of the capacity of the motel program – might drop out of the program on March 1, but officials later said that figure was fluid as negotiations were still underway.

Siegel proceeded to call every hotel and motel owner she could get ahold of, urging them to work out a solution with the state and keep people sheltered. Many conversations began talking about money – but would quickly shift to the people at the crosshairs of the negotiations, she said.

Motel owners would talk about the importance of the role they play, Siegel recalled. “They will say things like, ‘But there’s children here. But there’s people in wheelchairs here,’” she said. And I say, ‘Yes, that is why I’m calling you right now.’”

In her conversations, Siegel also emphasized some wiggle room in the $80 cap. The language of the bill includes the possibility for the state to pay hotels and motels fees for things like wear and tear, and to enter into long-term contracts.

Rushing and confusion

Eleventh-hour efforts on the part of advocates like Siegel and state officials to keep motels at the table appear to have prevented a mass un-sheltering of Vermonters. Yet in a strange quirk of the legislative process, the bill that sets the motel rate cap has not yet become law.

Just this morning, legislators gave their final approval to a mid-year budget adjustment bill, which includes the rate cap, but it still needs Scott’s signature. Scott signaled earlier in the week that he intended to sign it.

In a press release issued late Friday, Scott called the rate cap an “important tool” in the state’s effort to shelter vulnerable residents while working toward more permanent solutions. He noted that his administration still wants to scale back the program, and is pushing for proposals to encourage more housing development and homeless shelters.

Advocates have questioned why lawmakers pushed forward with the rate cap so quickly, giving service providers and program participants little time to prepare.

“That they had to rush with this March 1 deadline – it’s just deeply confusing why we had to do this,” said Frank Knaack, director of the Housing and Homelessness Alliance of Vermont.

Asked why lawmakers did not push back the rate’s effective date while finalizing the legislation this week, Rep. Diane Lanpher, D-Vergennes, chair of the House Committee on Appropriations, said lawmakers have been pushing the administration to negotiate with motels for years, and a little more time would not have made a significant difference in the outcome.

“The administration has had the ability to negotiate, but now, they actually have the spelled out legislative intent,” Lanpher said.

But for the unhoused Vermonters impacted by these fast moving policy changes – a hallmark of the emergency shelter program’s evolution since the pandemic began – the sudden changes can feel dehumanizing.

“It’s just inhumane that people have waited til the last second to make this decision,” said the Days Inn tenant. “There’s kids that understand what’s going on – and what that does to them, you can’t put into words.”

Have questions, comments or tips? Send us a message.

Carly covers housing and infrastructure for Vermont Public and VTDigger and is a corps member with the national journalism nonprofit Report for America.
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