Vermont is about to generate the cash needed to pay for one of the biggest affordable housing initiatives in recent history.
Earlier this year, lawmakers approved $37 million in new bonding, to ramp up construction of affordable housing stock across the state. Sarah Carpenter, executive director of the Vermont housing Finance Agency, announced Thursday that those bonds will go up for sale on Jan. 8.
“If you’re a bond buyer and you really want to target your investments to socially responsible bonds, then this would be something you might be very interested in,” Carpenter says.
Carpenter says the bonds have qualified for designation as “sustainability bonds,” which may attract certain kinds of investors.
Carpenter says the Vermont Housing and Conversation Board, which has the authority to disburse the bond proceeds, has already begun to decide which housing projects will get to use the funds.
Carpenter says the money will fund construction of up to 650 homes across the state.
“This money will be a little more flexible than some of the other monies we have access to, so that might allow for a little more creativity in some of the projects,” Carpenter says.
According to the Vermont Housing Finance Agency, at least 25 percent of the housing funded by the bond sales will be “affordable” for people make less than 50 percent of the median income in their geographical region. Another 25 percent will be within financial reach of people with incomes between 80 percent and 120 percent of the area median.
In 2017, median income statewide in Vermont was $69,300 for a family of four, according to the U.S. Department for Housing and Urban Development.
Under the legislation that created the housing bonds, the money has to be spent by July of 2020. The Legislature and Gov. Phil Scott approved an increase in in the property transfer tax to generate the revenue needed to pay off the debt.
Morgan Stanley is underwriting the bonds, according to Carpenter, who says institutional investors will likely buy up the majority of the bonds.