Vermont is known for its historic village architecture and quaint rural farmhouses, but the charm often wears off when you're trying to buy one of those old houses and realize how much it'll cost to fix up.
A pilot effort in Arlington is trying to make home renovations more affordable for working families, and proponents believe it will also help area employers.
Ludy Biddle is executive director of NeighborWorks of Western Vermont, a nonprofit housing agency in West Rutland. She said much of Vermont's housing stock is old and hasn't been well maintained or made energy efficient — big drawbacks to young families.
She said in areas outside Chittenden County, where home prices lag, it can be risky for homebuyers to invest in costly rehabilitation because they may not get the money back when they sell.
"So you're dealing with a situation that just keeps getting worse," Biddle said.
That's why Biddle is excited about a new $300,000 pilot program NeighborWorks is launching in Arlington, a town of about 2,300 people with a housing shortage.
James Baker, executive director of the Arlington Area Renewal Project, said they're lucky to have a number of big employers like Mack Molding and Orvis — but Baker said of Mack Molding's 560 employees, only 13% actually live in Arlington. Some commute from Bennington, Baker said, but others are from out of state.
“A lot of them commute in from New York state and Massachusetts," he added. "So, we have people working in Vermont, making an income, and taking it somewhere else to spend it. So that's how we got focused on the issue of housing.”
"We have people working in Vermont, making an income, and taking it somewhere else to spend it. So that's how we got focused on the issue of housing." — James Baker, Arlington Area Renewal Project
Baker, the former Rutland City police chief, said he reached out to NeighborWorks because of the nonprofit's success at renovating run-down houses in Rutland.
Biddle said in Rutland City they were able to harness almost $2 million in state and federal grants to transform 11 blighted properties. While effective, she said that funding model was too costly to be sustainable.
So, Biddle explained, they're trying a different approach in Arlington — one that's being funded with a grant overseen by the Vermont Housing and Conservation Board. She said the idea works like this: "We find houses that need a buyer, and we find a buyer who wants to invest in a home."
Biddle said NeighborWorks has been working with town officials in Arlington to identify single family properties that are vacant, deteriorating or causing further damage to their surrounding neighborhood.
Since banks are not always eager to lend money to buy and fix up distressed homes, Biddle said NeighborWorks will help finance the mortgages for these properties.
"So the borrower borrows from us," she explained, "and for every dollar that the borrower invests in the rehab, we'll match that dollar up to $75,000."
That means up to $150,000 in matched funds for renovations. And the rehab money kicked in by NeighborWorks? "It's free," said Biddle.
But, here’s where it gets a little complicated: At some point, when the homeowner decides to sell a house financed this way, 80% of any appreciation in value is put back into the property to make it more affordable for the next qualified low-to-moderate-income buyer.
So how might that might play out?
Well, say a woman buys a house and renovates it with the program. After it's fixed up, the home is appraised at $200,000. Ten years later, she sells it for $250,000 – a $50,000 increase in value. Under the agreement, $40,000 of that would stay with the house to help the next buyer.
"It's very easy to live in the community where you work. You're closer to your children, you're closer to day care, you're closer to school events. ... It takes a lot of stress off employees." — Florence Belnap, Mack Group
"What we're trying to build in Arlington is a community," said Florence Belnap, the CFO of Mack Group. The company operates two facilities, including its corporate headquarters in Arlington.
"Helping employees live closer to where they work just makes sense," she added. "It's very easy to live in the community where you work. You're closer to your children, you're closer to your day care, you're closer to school events, and you can attend medical appointments with your kids, so ... it takes a lot of stress off employees."
Belnap said Mack Molding will kick in an additional $5,000 for employees who takes part in the NeighborWorks program.
Ludy Biddle said the $300,000 pilot program will accommodate just three properties and that NeighborWorks will earn approximately $20,000 for each in ongoing project management fees. She said their agency will work closely with homeowners to develop and complete renovation and efficiency plans.
"We'll be monitoring the work progress and the quality of the work," she said. "And then we'll be stewarding the property thereafter ... so that we are always sure that it's maintained, you know, appropriately."
If the program works, Biddle said she believes it can be expanded and used as model for other communities in Vermont.
