This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.
Lawmakers are nearing the finish line on a wide-ranging housing package.
The eclectic omnibus bill, S.127, does everything from creating new programs to finance infrastructure for housing, altering who can appeal housing permits, putting in new fair housing protections for immigrants, and directing a raft of reports.
“It’s really got apples, oranges, bananas and pears in it,” said Rep. Marc Mihaly, D-Calais, who chairs the House Committee on General and Housing.
Legislative leaders have indicated that S.127, which passed the Senate in late March and is currently winding through the House, will be the central housing bill in 2025. But at the same time, the Senate is continuing to work on a separate version of a similar bill, H.479, muddying the path to the final product.
Here’s a look at the top changes this year’s housing package would make — including where lawmakers are still debating the details and where Gov. Phil Scott’s administration stands.
Financing infrastructure
The hallmark piece of S.127 is a new initiative aimed at financing infrastructure for housing, particularly in smaller towns. The Community and Housing Infrastructure Program, or CHIP, is essentially a scaled-down version of Vermont’s longstanding tax increment financing program.
The goal is to allow municipalities or developers to borrow money for infrastructure like water lines, roads and sidewalks for a particular housing project. Then, the increased tax revenue from the new development would pay off the debt for the infrastructure.
Advocates for municipalities and housing boosters have pushed hard for the new initiative, and developers big and small have said the new financing tool could help make more housing projects pencil out.
Critics have argued that if some development aided by the program would have still happened even without it, the initiative does not justify the foregone property tax revenue to the state’s overstretched Education Fund. The House’s tax-writing committee is contemplating restrictions on the proposal, including a test to determine whether a project would have occurred anyway, along with affordability rules and geographic boundaries.
Getting the CHIP proposal passed is a main priority for Scott’s administration, said Alex Farrell, commissioner of the Department of Housing and Economic Development. But he cautioned against narrowing who can take advantage of it too much.
“It’s concerning to me when we try to solve every problem with a single program,” he said.
This year’s budget also directs $10 million in loans and grants for infrastructure projects that support housing.
Changing who can challenge new housing
Right now, if a person has an issue with a new housing project and wants to take its developer to court over a local permit, they have to meet one of a few key criteria: they must be a direct neighbor, or they can gather 19 other people to sign a petition to trigger an appeal.
Many housing proponents have argued that these provisions make it too easy for “not in my backyard”-style legal challenges to interfere with badly-needed new homes.
The House has advanced a change that would scrap the “abutter” and “petition” appeal options, as they’re often called, with a different legal standard: an opponent must show they will be personally harmed by the development.
Mihaly, a champion of the change, sees it as narrowing the scope of who can lob an appeal. If an individual is concerned about stormwater runoff from a new building, for example, “I would have to show that runoff comes onto my property, or I actually swim in that water or drink it, or something like that,” he said.
But Farrell and members of the Senate’s housing committee have expressed concerns that the House’s change could in fact open a new avenue for opponents to appeal, without any geographic bound on where an appellant lives. That committee has advanced language that maintains a proximity requirement, which must now get vetted by the Senate Natural Resources and Energy Committee.
Immigration protections
Lawmakers have incorporated a bill that seeks to expand housing access for immigrants without legal status into the omnibus package. The legislation would amend the state’s fair housing laws to prohibit discrimination on the grounds of citizenship or immigration status when someone is seeking to rent or buy a home.
S.127 also spells out that a landlord needs to accept a range of forms of identification on a rental application in order to conduct credit and background checks — not only a Social Security number. That follows testimony from immigrants who’ve told lawmakers that landlords have frequently passed them over when they couldn’t provide the identifier. But lawmakers took a step back from an outright ban on landlords asking for Social Security numbers that advocates had originally pushed.
In a move to assuage landlords and lenders spooked by the Trump administration’s immigration enforcement, the bill also spells out that federal laws and regulations take precedence over the state’s protections.
Farrell said on Wednesday that the administration does not yet have a position on the new protections.
Spending debates
In parallel with the housing packages, lawmakers have finalized their state budget proposal for the coming fiscal year.
The budget gives about $15 million to two pandemic-era housing development programs that had since run out of funds, one that provides low-interest loans to developers of rental housing for people with moderate incomes, and another that gives subsidies to builders of homes for purchase by “middle income” buyers.
That’s less than half of what Scott advocated for the pair of programs at the outset of the legislative session, prompting Scott to say several weeks ago that the cut was one of his chief gripes with lawmaker’s budget proposal.
The budget also gives $4 million to the Vermont Housing Improvement Program, which provides modest grants to rehabilitate rental housing that has fallen into disrepair. But because that funding is one-time and not designated as an ongoing expense, as the administration had requested, the unpredictability may jeopardize maintaining staff positions into the future, Farrell said.
Lawmakers also directed about $27 million to the Vermont Housing and Conservation Board for deeply-subsidized housing, far less than what affordable housing advocates have said is needed to fill a backlog of projects.
Odds and ends
S.127 also takes steps to streamline remediating contaminated brownfield sites for future development, directs the state to look at what it would take to create a land bank to buy up abandoned properties, and sets up studies looking into accessibility standards for residential buildings and housing options for people with developmental disabilities.
Notably, the bill does not take up further reforms to Act 250, a subject where Scott saw more room to push after last year’s major overhaul. Some of his asks got taken up in a late-in-the-game land-use bill that has thus far seen little action.
