During the recent campaign for governor, several candidates suggested that Vermont should use some of its debt capacity to issue a housing bond. And while Governor Phil Scott didn’t come up with this idea himself, to his credit, he’s now adopted it and proposed a thirty five million dollar housing bond.
It’s an idea that makes sense for a lot of reasons. It would take advantage of the very low interest rates currently available. It addresses the lack of affordable housing for low income families by requiring that at least twenty five percent of the bond money be targeted for this group. And it tries to address the problem that businesses are discouraged from locating to Vermont because of high housing costs.
In an ingenious twist, the housing bond would require that at least twenty five percent of the money be used to make housing more affordable for those making between eighty percent and one hundred and twenty percent of median income.
The proposed housing bond would be administered by the Vermont Housing and Conservation Board - or VHCB as it’s commonly known. Having a competent entity administer the funds is critical because financing affordable housing can be mind boggling in its complexity, often involving ten different layers of City, State, Federal and private capital. VHCB has a great track record in navigating this financial maze and figuring out how to fill critical gaps that allow worthwhile projects to move forward.
When it comes to providing funding for any social program these days, such as affordable housing, there seem to be endless challenges as the Governor and Legislature face competing priorities and inadequate revenues. But the need for more housing is pressing - as illustrated by the latest twenty three unit apartment project in Hinesburg. Despite all the restrictions - income and otherwise - it instantly filled up. Within thirty days it was eighty three percent leased.
Recent studies confirm that the need for more affordable housing in Vermont continues to grow. This proposed housing bond would be an appropriate, innovative and timely tool.