This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.
The city of St. Albans recently bought the longtime office building of the local newspaper. Officials want to build apartments there — but first, the place needs work, and a new state program could help foot the bill.
Dirty soil must be cleaned up on the site of the former Saint Albans Messenger printing press,
and water, sewer and parking need upgrades before the city can court a developer to build the 14 homes and ground floor commercial space that officials envision, said St. Albans City Manager Dominic Cloud.
To finance that site work, local officials plan to turn to a new state program: The Community and Housing Infrastructure Program, or CHIP, which allows municipalities and developers to borrow money for infrastructure like roads, sidewalks and sewers for a housing development — and then use the property tax revenue boost from the new homes to help pay back the debt.
The program could unleash $2 billion in infrastructure spending over the next decade.
The initiative officially launches this month, after lawmakers and Gov. Phil Scott authorized its creation last summer. State officials opened a pre-application interest form and have kicked off a series of training sessions to drum up interest from municipal leaders and homebuilders.
“We basically have a once in a generation opportunity here,” said Jessica Hartleben, executive director of the Vermont Economic Progress Council, which oversees the program.
CHIP is essentially a scaled-down version of Vermont’s existing tax increment financing program and is aimed at smaller towns. The Vermont League of Cities and Towns is standing up technical assistance to support municipalities in applying.
As the program gets off the ground, bigger municipalities with plenty of TIF experience — like St. Albans — have begun eyeing it for projects that fall beyond their existing TIF districts. But some smaller towns have begun to register their interest, too.
The Rutland County town of Fair Haven recently acquired a 24-acre former race track donated by a co-founder of the Castleton-based lighting company Hubbardton Forge. The town plans to utilize CHIP and ultimately spur the construction of middle-income homes for sale on the site, the Rutland Herald reported in late December.
Housing built via CHIP must be used as primary homes while the infrastructure debt gets paid off. Projects with a certain amount of affordable units get incentives, like the ability to retain a higher level of tax revenue. The local selectboard or city council will need to hold a public hearing on a municipality’s project before plans advance.
CHIP faced considerable scrutiny before its passage last legislative session. Democrats in the House pushed for more guardrails around the initiative, arguing that any new development that might have occurred even without help from the tax incentive would result in foregone property tax revenue to the overstretched Education Fund. Its loudest proponents — including the Scott administration and a new pro-housing lobby — argued that boosting the state’s overall housing supply would help spread the burden of high education costs.
When the market itself isn’t producing enough housing, local governments should play an active role in building more homes, said Cloud, from St. Albans.
“The city can use all the tools that the Legislature has given us to level the playing field and get the projects that we want,” he said. “The Messenger building is a great example of that.”
Applications for CHIP will open by the end of January, according to Hartleben.
