This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.
The Vermont Senate unanimously advanced a bill to reform the state’s response to homelessness, an issue that has remained entrenched in recent years as state leaders have sparred over how to ease the problem.
Now, the Democratic-led Legislature and the administration of Republican Gov. Phil Scott appear to have found some common ground. H.938, which received preliminary approval from the Senate on Wednesday, would pare back the controversial motel voucher program while attempting to streamline how the state funds and governs emergency shelter and services.
“We’re moving into a reality that being poor means being homeless — and we want to correct that,” said Sen. Ginny Lyons, D-Chittenden Southeast, when presenting the bill on the floor. “H.938 is a responsible, systematic approach and response as a way to move people from unhoused to housed and stay within a budget.”
The bill will be up for final approval on Thursday, before heading back to the House and then to Scott’s desk.
H.938 tries to better organize the fragmented system serving the roughly 4,000 people experiencing homelessness in Vermont. It sets up a “continuum” of shelter options for unhoused people to move through.
“We’re moving into a reality that being poor means being homeless — and we want to correct that."Sen. Ginny Lyons, D-Chittenden Southeast
First, a household would be considered for supports — like help with back rent or relocating from an unsafe apartment — that could prevent them from entering homelessness in the first place. If those efforts fail, their next stop would be a “highly structured shelter” that would offer case management and other services, if space is available. If that setting doesn’t work, the next option would be a “low barrier shelter,” such as a place that has loosened eligibility rules around sobriety. Here, stays would be time-limited. Specialized shelters for people with substance use disorder or mental and physical health conditions would also be in the mix.
Private hotels and motels, which are currently the single largest provider of shelter in Vermont via the state voucher program, would remain part of the continuum. But the bill would restrict their use by imposing stricter caps on the number of rooms the state can use throughout the year and how long individuals can stay in them. The bill also mandates that support services be offered onsite, and allows certain motels to be set aside for specific populations.
“It gives us an opportunity to designate hotels as shelter-like options for certain groups, like families,” said Sandi Hoffman, commissioner of the Department for Children and Families.
Legislation contemplated but scrapped earlier this session would have largely eliminated the use of motel rooms, a goal the Scott administration has pushed for since federal funding for the program’s pandemic-era expansion dried up three years ago.
Lawmakers have haltingly agreed to winnow down its scale over the last few years, setting new restrictions on eligibility that have resulted in unrelenting waves of evictions. In 2025, Scott vetoed the Legislature’s effort to overhaul the state’s homelessness response apparatus, arguing that it did not adequately reduce the scale or cost of the motel program. The state appropriated over $30 million for the program last year and $44 million in 2024.
Scott has not yet indicated whether he plans to sign H.938, but officials in his administration, including Hoffman, have been working closely with lawmakers to get the bill to the finish line.
“The Administration appreciates H.938 maintains a focus on congregate shelter options and stays within the Governor’s recommended budget,” said Amanda Wheeler, Scott’s press secretary, in a statement. Scott will review the final language of the bill after passage before deciding how to act, she said.
Shelter providers and advocates for unhoused Vermonters expressed mixed feelings about the bill. Many see creating a dedicated homelessness program enshrined in state law as a positive step forward — a move that would end the yearly fights over motel program funding in the state budget cycle.
But many expressed concern that reducing the number of motel rooms in use before new shelter capacity comes online would increase the number of people sleeping outside. The bill sets aside a total of nearly $83 million for shelter, rental aid, and services next year, with $4.4 million earmarked for the development of new shelters and about $23 million for emergency housing in motels.
“It’s not enough money to really be a solutions-based bill,” said Libby Bennett, executive director of the Groundworks Collaborative, a shelter provider in Brattleboro. “It’s a rearranging of the deck chairs.”
Shelter operators also worry that new prioritization rules for who can access their services might mean they need to turn people away, and that time limits imposed on shelter stays won’t be realistic for how long it typically takes to find housing for clients. Some also said that the envisioned continuum of services is too rigid for the messy lives of their clients.
“I think there needs to be fluidity, because these are humans, and, you know, oftentimes progress isn’t necessarily linear,” said Sarah Russell, emergency services director at the Champlain Valley Office of Economic Opportunity.
The bill also creates a new “rental assistance bridge” program that will try to link homeless households with long-term housing in the absence of federal vouchers, which help cover rent for low-income households. The bill also sets aside funding for municipalities to address unsheltered homelessness and creates new disability protections in shelter services.
Advocates say that the bill does not do enough to expand options for people to leave homelessness: namely, by boosting Vermont’s affordable housing stock.
“We need a clear vision for how we get out of crisis after crisis after crisis, and then we need the investments to align with that plan,” said Chad Simmons, executive director of the Housing and Homelessness Alliance of Vermont. “I don’t think either one of those exist right now. I think it is unclear to us what the long-term plan is for ensuring all Vermonters have access to affordable, safe housing.”
