This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.
With federal funds dwindling for a key housing assistance program, Vermont lawmakers are looking at using state money to slow the loss of vouchers that help thousands of Vermonters cover rent.
Legislators have said they want to earmark $5 million in a mid-year spending package to soften the blow of funding reductions to the Section 8 program. The bill has plenty more hurdles to clear, but a key housing panel registered its support for the funds on Thursday after local public housing authorities have spent months crying for help.
Still, the earmark falls far short of the $18 million housing authority leaders had originally bid for last fall, an amount that would have maxed out Vermont’s voucher ceiling set by the feds and boosted the number of vouchers in rotation.
“What we’re trying to do with this one-time, strategic intervention is to … slow the decrease in the number of vouchers in this calendar year as much as possible,” said Rep. Marc Mihaly, D-Calais, who chairs the House General and Housing Committee.
As Vermont faces steep housing costs and persistently high levels of homelessness, federal housing vouchers play a crucial role in sustaining housing for low-income people who can’t afford market-rate rents. Voucher recipients pay a third of their income toward rent; a local agency administering the federal program pays for the rest. The vouchers offer one of the few avenues out of homelessness for the thousands of Vermonters sleeping in shelters, motels and outdoors.
But over the last year, local housing authorities in Vermont have seen reductions in funding from Congress. That has led many of the nine local authorities to stop issuing new vouchers off their lengthy waiting lists, rescind vouchers from people looking for an apartment to use them, and shelve vouchers when tenants have died or moved out. The state lost hundreds of housing vouchers in 2025 through attrition.
Still, many of the nine Vermont housing authorities are entering 2026 in a budget shortfall which they don’t expect to ease anytime soon. Berk is now worried VSHA might need to take the extraordinary step of withdrawing vouchers from people currently using them to help pay their rent if the state does not intervene.
Draft bills in Congress would result in the loss of roughly 300 to 600 more vouchers in Vermont — or $3.6 million to $7.2 million — according to Berk.
“Preserving housing assistance and keeping Vermont families stably housed has to be a priority,” Berk told lawmakers Thursday.
The federal government bases future years’ Section 8 voucher funding on past years’ spending by local housing authorities. That means that as Vermont authorities shrink their voucher rolls, they can expect to receive less money in the future even if need remains great, leading to what Berk has called a “downward spiral” in the number of vouchers available to Vermont renters.
The $5 million in state aid is meant to halt that spiral, at least for a year: It would allow Vermont housing authorities to slow down the erosion in the number of vouchers available to Vermont renters and ensure the state gets more federal money in the coming years.
“It means that we will always get a greater share of whatever [Congress chooses] to give us [in] future years,” Mihaly said.
Rep. Robin Scheu, D-Middlebury, chair of the powerful budget-writing panel in the House, said Friday morning that her committee is looking at the funding ask “very seriously.”
“If the Section 8 voucher goes away, these people will not be able to afford to pay full market value, and if they can’t pay, then they don’t have a place to live,” Scheu said.
The stopgap funding would help local housing authorities offset funding shortfalls and prevent the displacement of families, according to Berk.
The earlier public housing authorities can receive the funding, the more vouchers they can save this calendar year, Mihaly said — hence, lawmakers’ attempt to earmark the funds as part of the mid-year spending bill typically passed in March.
But Republican Gov. Phil Scott’s administration has signaled it wants to hold off and consider the ask as part of the budget for fiscal year 2027, which begins in July.
“[The governor] believes that in the face of federal uncertainty, we should not be appropriating funds without first understanding the full budget picture and weighing all priorities before making those decisions,” said Amanda Wheeler, Scott’s press secretary.
The House Committee on Appropriations is expected to hash out its version of the mid-year spending package over the coming weeks, before the bill is sent to the House floor and then to the Senate.
