Gov. Phil Scott’s proposed $35 million bond for affordable housing seemed to have broad support only months ago, but now the proposal appears to be on life support.
In January, when Scott introduced the bond idea to help alleviate the Vermont housing crunch, taxpayer subsidized housing sounded like a bipartisan plan. Right now, a Senate committee is barely keeping S.100, the housing bond proposal, alive.
Both Scott and officials at the Agency of Commerce and Community Development touted the housing bond as a basis to employ 1,000 workers, build 500 additional housing units, place 1,000 residents into improved housing and create $100 million in new construction and renovation projects statewide. The concept seemed to dovetail neatly with several of the governor’s agenda items: helping build jobs and the economy while protecting vulnerable citizens.
What a difference two-and-half months make, at least when it comes to devising a way to pay for it all. The Senate Appropriations Committee delayed the bill following the Senate Finance Committee’s vote to pay for the bond through a controversial $2 per night hospitality occupancy fee.
Senate President Pro Tem Tim Ashe, D/P-Chittenden, said he wasn’t sure if the bond plan will remain. Many Democrats and even some Republicans agree with Ashe.
Soon-departing state Rep. Job Tate, R-Mendon, a member of the House Committee on General, Housing and Military Affairs, doesn’t like the housing bond. He told Vermont Watchdog the approach is symptomatic of how the state is creating a “culture of dependency” on taxpayer-subsidized rents.
“Anybody who’s concerned about Vermont’s future and our young people will have to admit that housing is a major issue,” Tate said. “But one of the problems I have is the method by which the state tries to solve this problem – through the VHCB, [the] Vermont Housing and Conservation Board. It raises a red flag for me.”
VHCB makes deferred loans for the acquisition, rehabilitation, and construction of affordable housing by quasi-government nonprofit housing organizations. Since 1987, more than 11,000 permanently affordable homes have been subsidized, thanks to Vermont taxpayers and VHCB.
But critics like Tate say Montpelier’s approach to the housing problem is to build homes that must be subsidized by taxpayers in perpetuity. VHCB has over $200 million in assets, but they are the taxpayer’s assets, said Tate. Moreover, VHCB collects nothing on behalf of the taxpayers and doesn’t raise rents with any regularity.
“They are building a culture where taxpayers buy into housing projects which we then have to subsidize forever. This, in turn, means keeping population incomes below a certain level just so they can stay in these homes,” he said.
State Rep. Jim Condon, D-Colchester, a member of the House Committee on Ways and Means, told Watchdog the bond may not make it out of committee. Ironically, the bond may founder in part due to Scott’s repeated call to House and Senate lawmakers to avoid new taxes and fees.
“The housing bond appears to be dead in the water at the moment,” Condon told Watchdog. “The funding mechanism proposed, the $2 a night extra tax, is a non-starter for me.”
Tate argues that rents would be lowered organically if landlord-tenant laws were reformed to give relief to landlords. He added that public-private partnerships might offer a better way to fix the affordable housing problem.
“Creating this constant culture of subsidizing housing as the only method to help people is absurd,” Tate said. “We need to get the free market involved; if there’s a demand for affordable housing, then there’s someone out there, privately, who can help feed the demand.”