Vermont Legislature SmartTranscripts:

[Rep. Robin Scheu (Chair)]: It is Wednesday, 02/18/2026. It's just after 1PM and we're continuing to go through

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: the FY27 budget and this afternoon we're delighted to help vote at the Vermont Housing and Conservation Bureau.

[Rep. Robin Scheu (Chair)]: Good to see you both again. If you want to introduce yourselves for the record, then you're going.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: For the record, Gus Selig, I'm the Executive Director at the Vermont Housing and Conservation Board. And I'm Polly Major, I'm the Director of Policy and Special Projects for the Vermont Housing Conservation Board. And while we're pulling up the presentation, I just will start by saying thank you to this committee for the support you and your predecessors have given to us over many, many years. Electronically, you've gotten this annual report from us. Anybody prefers hard copy because I can't keep track of all the documents electronically. Happy to share one.

[Rep. Michael Mrowicki (Member)]: Where's that picture that you're

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: And representative Mrowicki is very excited about the front page because- Was that attention? He worked really hard in Putney to create consensus for us to know all 45 affordable homes right in the village, across from the co op, while also providing one acre for community garden, and it's also the place the farmer's market happens. So thank you for the good work you did there. I know that you really helped create the community consensus.

[Rep. Michael Nigro (Member)]: How many years?

[Rep. Michael Mrowicki (Member)]: Well, from first conversation to now it's going to be four over four years. How many trips to the Supreme Court?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: Two. Two trips to the Supreme Court? One person? We're gonna dislike the community support for it?

[Rep. Michael Mrowicki (Member)]: There should be a law.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: Well, that is clearly in your jurisdiction here. Fine, I don't write the laws, but I was happy to stick with getting the project occupancy this year. We're going to begin this presentation in St. Albans, but I wanted to say, I also thank you because I think I'm really lucky to have the job I have. In recent months, I've been in Walcott, I've been in West Rutland, I've been in Windsor, I've been in Burlington, St. Albans, and many other places where fundamentally what happens is your constituents have great ideas and they get stuff done with our And that's really the magic of this work is getting the tax dollars back to people who know what their communities need and will spend it well. And in beginning in St. Albans, they had the idea of creating a TIFF district in order to produce more housing. If I remember my first trip to St. Albans in the early '70s and go up there today, it's a more vibrant place by a lot. The community consensus was they wanted more people living in the downtown or near the downtown, which supports their restaurants and all the other activities in the community. This is 33 units of elder housing. We've built about 150 apartments in the TIP District. There's about two seventy new homes in the TIP District. So what you'll see from us is not just the project, but what's its catalytic impact on the neighborhood, on the community. That's what we're trying to achieve. What's the impact on individuals? To speak of who we are and what we do as the Housing Conservation Board, our mission is not just to conserve land or build housing, but to do it, the statute tells us, in a way that promotes economic vitality and quality of life for Vermonters. Our charge is also to protect resources in perpetuity. This is a relatively new project in Morristown called Muddy Moose, and it was brought to us by the Stowe Land Trust because they were interested in the conservation aspects of 150 acres. And what's really exciting, and there aren't too many firsts after all the years I've done this job, this is a first in terms of converting vacation homes permanent year round homes. That's what's happening here with eight homes, six of which will be permanently affordable and great conservation value to the 150 acres in terms of floodplain forest, wetlands protection, 7,000 feet of streams that feed into the rivers that are all protected, great low impact recreation here will continue to take place. To get to the budget, and we'll come back to this later in the presentation, we support the governor's recommend, which is the full allocation of transfer tax revenue. He's also, through the Clean Water Board, recommended $2,800,000 for the activities, conservation activities, and farm activities that we do that relate to reducing problems with our lakes and streams through conservation and through a grants program we administer for farmers. You will notice that there is, last year, you'll recall you provided $7,800,000 in additional funding, 5,000,000 was for general housing and 2,800,000.0 was to support a project that serves people with intellectual and developmental disabilities. We did talk with the administration about one time funding and made a proposal. There is money in the AHS budget for shelter. We proposed doing that and a number of other things. And AHS does contract with us currently to administer their shelter funds because their expertise is not in the way of doing capital projects and that kind of thing. To speak to the photos, and this just expands, speaks to our mission more broadly, we have had miracle program for about thirty years. Maybe the hardest thing this last year is on a Friday night, we got a letter from the feds saying everybody should go home. The AG participated in a lawsuit. We won the lawsuit and then the program was reinstated about a month later. But the AmeriCorps story here is a little different, which is to say we had some young people, I think they were taking a year off from Dartmouth, do mentoring at an affordable housing site many years ago. And when they got done with that, they said, We should create a nonprofit that will promote mentoring at affordable housing communities all over the state. And they did that. They created the nonprofit. It's been in business for many years. They do the mentoring work. About fifteen years ago, they said, We wanna have a summer camp program for kids from these properties, and we help them fire some land in Fletcher. This summer, we helped them acquire an island in the lake. So again, we're not just doing conservation nature for nature's sake, we do some of that, trying to make sure we're always paying attention to how the land is gonna be used and who it will benefit. We've had over the last three or four years as the state university system has been in a state of trying to figure out its future, a number of conversations with the administration there, with Mike Smith, with the new chancellor. We have funded a purchase and we will be part of the repurchase and rehabilitation of this building, which is part of the Johnson State campus, sits halfway up the hill to the campus, and there'll be 20 or 25 units of affordable housing that should get underway. You've also got a disaster recovery grant because Johnson was so badly hit in the '3. To talk about the rural economy and conservation, four quick stories. Lisa McDougall is a young woman who farmed in Poundal on leased land for about a decade. She then got help through the Vermont Land Trust Farmland Access Program and for the last decade has just been doing a great veggie operation in Shaftsbury with the support from our Farm and Forest Viability Program, which I'll talk about later in the presentation. The next picture to the left is the site that was owned by Sr. Sassimo Lumber in Downtown Brattleboro, And there was a big berm there, been purchased with our support, with DECs support. The berm has been removed, the fill has been removed. Dave and Dean used to say to me, The whetstone is a dinky little brook, except when it rains really hard. And when it rains hard, it does a lot of destruction. Just two years ago, downstream from here, the largest mobile home community in the state is Tri Park, it's a cooperative, and their bridge was undermined. This year, removing 18 people out of the floodway and up to higher ground there. Another project in West Brattleboro owned by the Public Housing Authority. They have done what's been done here of removing a lot of fill, restoring floodplain. There were about 50 homes, apartments in the floodway. We're gonna restore 30 homes that are out of the floodway there. So this is conservation contributing to Vermont's resilience. Kingdom Trails, there are people around this table who know more about it than I do, but it's been a great economic driver in the Northeast Kingdom and we're seeing other communities take a lesson from them wanting to build trails and bring cyclists there. And then last is we've done about 80 buildings as part of our conservation mission, historic preservation is noted in our statute as a conservation activity that are used by the community for a variety of purposes. Sometimes it's a general store. We visited a library in Brandon a year ago where they made major renovations and for the first time, a long time user in a wheelchair could actually get into the library instead of wheeling up to the door and asking for a book. This is the old Grange Hall in Morrisville that's now used by lots of kids as a place for the arts after school and activities there. We've had our board meeting there on occasion. So these are different ways we're trying to contribute to the vitality of rural communities and to be more resilient. A big part of our work has been to take on white elephant buildings and convert them to housing. People of Bennington actually invested $3,000,000 into the old Bennington High School. It had been vacant, I think for three decades. Not quite sure how long Sacred Heart's been vacant, but pretty close to three decades. So construction is underway here in Bennington. It'll be a multi purpose facility that I think is scheduled to include a childcare center. We're funding 17 apartments. There'd be another 17 market rate apartments in Sacred Heart at the convent. And with an addition, we're adding housing right now, and that'll be completed this spring. And the high school itself will become 30 units of apartments that should begin construction, I hope next fall. So that's phase two, there's actually room for a phase three there. This is the big numbers of what you gave to us over the last, since 2020, since the pandemic began. There's been a lot of talk about the cost of housing, and it's something that keeps me up at night because it costs too damn much. We have workforce problems, workforce shortage in Vermont. The good news, a friend of mine who owns a construction company says is these folks who work in the trades are now getting paid making a good living, but construction's much more expensive. Our overall investment for all of this stuff averages $80,000 That doesn't mean that housing doesn't cost 5 to $600,000 to build, it does. Some of these activities are low cost activities, but our goal, and it's stated in our statute, is to leverage other investment, to leverage federal funding, to leverage private investment through housing tax credits that the feds issue, so on and so forth. On the left side of the chart, what you see is housing that primarily serves the workforce. Some of the rental housing serves elderly and disabled people. We've rehoused lots of people who've experienced homelessness. On the right side is the kind of housing that is for very special purposes. Emergency shelter, we've doubled size of the state's shelter system. Recovery residences to take on the opioid epidemic. Accessibility improvements. And if you think about somebody being in a home that they can't get in or out of, or they can't use the bathroom, that would make them a candidate for a nursing home. So we're keeping people in their homes through this program. And then finally, and we'll talk more later in the presentation about taking on the needs of people with intellectual and developmental disabilities, which we've been working on. With that, I'm gonna turn it over to Polly to take the next piece of the presentation.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: So I'm gonna run through some slides that talk about how BHCB's housing programs help Vermont work towards its housing goals and how our programs are really tailored to fill gaps that the market can't adequately fill. And Gus just talked about the importance of leverage in helping really preserve housing in Vermont and expand housing options in Vermont. And leverage is really key for our work. It's called out in our statute as a priority. And we're also asked by our statute to balance that with responding to needs. And so I just want to spend a little time with this committee on leverage because it informs how we target our housing dollars and how communities seek to deploy our housing dollars. So what do we mean when we talk about leverage? We're talking about the dollars that are coming in to create or preserve housing that are not the state dollars that are run through BHCB. So what this graph is showing you here is a representative sample of a number of different projects that BHCB has funded over the last several years. And what you see, each bar represents the per unit cost for those projects. And then that bar is broken down into three different colors. And the blue at the bottom, that's the state investment that's run through BHCB. Those are the most precious and limited dollars that we, as a housing system in Vermont, have. And then the lighter blue, those are federal dollars that BHCB is able to administer. And then the yellow is all other sources of leverage. That might be donations. That might be, in the case of homeownership, a mortgage. And in the case of rental development, the majority of those is coming from the tax credit program. So when you're looking across the spectrum of shelter to manufactured housing, rental homeownership, what you see is a huge variation in the per unit costs, with shelter being less per bed than it takes to build a new unit of rental or homeownership housing. But you're seeing a fairly steady per unit investment of the state subsidy around through the HCV, which means that as we as a state are looking expand the shelter network, how do we expand permanently affordable housing in the state, it's roughly the same investment to add a bed of shelter as to add a permanently affordable rental unit or a new home ownership unit. Gus spoke to the cost of housing. The cost of housing is really high and concerning to us. That's really driven by labor and the cost of materials. And you see that in the Bennington High School redevelopment, which is the most expensive per unit project we've seen, but has huge community impact and has leveraged a 4% federal tax credit, which is a virtually unlimited resource to the state. So what that project did is it took Vermont's precious state dollars, pulled in outside investment through the tax credit program, and created this project that's going to house Vermonters in the workforce, house vulnerable Vermonters, and have this community development benefit. So that's really what we see when we're talking about the value of leverage and what BHCB can do in terms of taking those state dollars and attracting other resources to meet the housing needs in Vermont.

[Rep. Robin Scheu (Chair)]: So I have a question, and then I'm going to turn it to Mike. BHCb Federal, this is money that you are able to draw down federal funds as opposed to other kinds of leverage, which is other people's money? Right. Okay. And in addition to tax credits, that's the yellow, what else, what other leverage?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: Sometimes there's philanthropy, sometimes there's community fundraising. So the reason one of the shelter projects on this chart is the replacement of the facility where a social worker was killed in Brattleboro. That's a long established, very stable entity that built up a fundraising base. Most of the shelter organizations state outside of perhaps the Upper Valley where there's a lot of money to be raised in Chittenden County, don't have that level of support. So that's why Polly is saying most of the time, there's very little leverage opportunities to build a shelter and especially to do it quickly. So anyway, sometimes philanthropy, sometimes private equity, sometimes federal grants, sometimes in the case of the East Callis General Store, they got money from the Northern Borders Regional Commission.

[Rep. Robin Scheu (Chair)]: Great. Okay, so Mike and then

[Rep. Michael Nigro (Member)]: It's possible to answer my own question, but I just wanna check and make sure I understand. The previous slide says average per unit investment, 80,000. Looking at this page, it looks like the state dollars per unit are at least $100,000 Is the difference just then the previous slide has some of the things like lead abatement?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: Correct, yes. It had other activities here that the farm worker housing program tends to be a repair program that is costing significantly less. There's a number of programs that cost very little but have an impact.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: We will preserve housing and build new housing. Often, preserving housing is the more cost effective strategy. It's a smaller per unit investment. But it's also really critical, especially in our rural areas. I had a colleague at BHFA reflect on a ribbon cutting in Brattleboro, where we're adding 17 units, but that the fire marshal had also said they had lost 30 that year. And so where we can preserve a unit of housing, it's really critical. And that's what's balancing the lower cost investment helping preserve our housing stock.

[Rep. Michael Mrowicki (Member)]: Wayne and then Tom? The federal money that's from the Northern Borders? So really, it's from all the federal money, Northern Borders money?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: Not usually, but that's, in that particular example that I gave of East Callis, they got Mark Mahali, representative Mahali will tell you they raised money from 27 different sources, including $400,000 from the community for the East Callis store. Northern Borders was one of the 27 sources.

[Rep. Michael Mrowicki (Member)]: What other federal agencies do you get money from?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: We primarily work with two federal agencies, HUD and USDA Rural Development. And the Northern Borders, how is that for? Northern Borders is its own small federal agency, it's the smallest, newest federal agency that provides funding to the four Northern New England states and New York, and they have their own administration and they do a lot of economic development along with occasionally funding housing projects.

[Rep. Michael Nigro (Member)]: And seeing that you're here for like four hours this afternoon, I could But jump in the weeds, also, think to Mike's point, there's also there's levels of investment or there's levels of tax credits that the low income tax credits, I think that play a part in the difference. And I have to say, once upon a time pre COVID, pre explosion of costs, any money that came from the property transfer tax that was applied to housing was about a one to eight ish on average leverage. So from a results based accountability standpoint, it was phenomenal investment and a phenomenal return. But there's and those were related mostly to the, correct me if I'm wrong. Those were related mostly to the nine percent low income tax credits. And then there's the 4%, which are much more available that provide less leverage simply because the return isn't that much. Is that still where we're seeing a lot of the use of the money

[Rep. Michael Mrowicki (Member)]: that we've gotten over the last five years?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: Yeah, so to make it very simple, just do the math, a 9% credit has a certain value, a 4% credit has less than half the value. 9% credit, the state gets a set allocation of $2,800,000 of credits, which turns into about $25,000,000 of equity. 4% credit is virtually unlimited in Vermont. And we did, through the pandemic, we did a lot of deals using the 4% credit, which meant we leveraged less money, but we got more housing built.

[Rep. Michael Nigro (Member)]: And then the last point, for the committee's perspective, affordable housing, the reason it can become affordable is because the tax and the investment from the Community Reinvestment Act reduces the mortgage. And so a project like in Waterbury, the mortgage on a $6,000,000 project was less than $600,000 or something like that when all was said and done.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: Think the key point I would make is depending on who you're targeting, because property taxes are high, insurance is high, maintenance costs are significant, management, you take all that and you want to produce an affordable rent, you're limited in how much debt you can use to build an affordable apartment. I think that is the way I would say it. And so you need more capital sources because if you take on too much debt, the reps have to cover the debt and then the apartment's not affordable.

[Rep. Michael Nigro (Member)]: Thank you.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: Covered a lot on that slide. I knew that was the danger of putting

[Rep. Robin Scheu (Chair)]: it in there. That's good. That was a good visual.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: I wanted to put up on the screen for the record the range of housing types that VHCV helps to fund, range of housing activities that are accomplished through support from the board. What you see is everything here from home ownership all the way through shelter. And really, what we're aiming to do and what the trust fund allows us to do is have a really flexible source of housing investment that is able to respond when communities come forward and say they have a gap and say they have a need. And I think a great example of this is how we've been able to work with the Habitat chapters across the state to bring online permanently affordable homeownership homes like this home in East Montpelier. And to speak to that flexibility a little bit more, at our January, the board allocated funds to the Rutland chapter of Habitat for Humanity to help staff up a panelized manufacturing facility to help build the panels that will go into the homes that they're going to build. And this is a way that that chapter of Habitat is looking at building homes more quickly through panelized construction, hopefully realizing some cost savings, being able to work year round because it's inside. And their dream and vision is to do a couple of these homes this year, try out the model, and then maybe work with chapters around the state to use off-site manufacturing to build Habitat homes around the state.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: And I'll just add one thing. Are two service organizations who both signed up to staff this project as their service project for their community. So we're talking about Habitat using volunteer labor, which again helped to reduce the cost.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: Something that ties together Oh,

[Unidentified committee member]: just real quick. So this particular model here, this is one you continue to use here across the state, do you have a few

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: of So those in that investment was just made in January. So it's not this home that's pictured here. This home was several years ago.

[Rep. Michael Mrowicki (Member)]: But yes. But yes.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: The policy that ties together all of our housing programs is permanent affordability, and we see this policy as really a protective policy for Vermont communities and for Vermonters. It protects Vermonters by really preventing displacement. As our real estate market increases, as cost of insurance and operations for housing increases, people are getting priced out of the market. And we see that especially in the homeless crisis that we're facing, but also in the workforce challenges we have. Permanent affordability means that a person, when they get into affordable housing, aren't going to be displaced due to a grant for homeownership costs increasing. It also protects mixed income communities. Cambrian Rise is a community that we've helped Champlain Housing Trust and Cathedral Square build affordable housing in, and it's part of a larger master private development done by Jonathan Ferrell that's going to be the most mixed income community in the state of Vermont. You have condos with views of the lake that are north of a million dollars next to homes that are available to people exiting homelessness. And if those homes only had to be affordable for five, ten, fifteen years, at the end of that time, they could increase significantly due to the market. That's not going to happen because of this policy, and it's going to preserve this mixed income neighborhood as an asset for Burlington. And Gus, maybe I'll turn it over to you to talk about how it protects the state assets.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: So we invested $2,900,000 back about 1990 to preserve Northgate apartments. It's the largest affordable rental complex in the state. It was a $22,000,000 deal. If we had twenty years of affordability, which was the standard with HUD ten years ago, it could have come on the market. If it came on the market today and was sold and we needed to replace three thirty six homes in Burlington, at today's prices, we'd be spending upwards of $170,000,000 probably needing a subsidy of $40,000,000 So our view is that the investment that we made in 1990 is still benefiting Vermont. And that's the value of this policy of permanent affordability. I just wanna make one other connection for you in terms of our housing and conservation combined mission, because lots of people say, does that make sense? Representative Bluemle will recall that there was a lot of opposition to the development of the Catholic Diocese, which is what you're looking at here. That opposition melted away when the Vermont Land Trust raised over a million dollars and made a deal with city and the developer to turn 12 acres that's along the lake over to the city as a park. And with that, that combination of housing and conservation interests, the opposition melted away, and this did not face permitting difficulties.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: I want to talk a bit about who's served by affordable housing in Vermont. And what we see is that really it's the Vermont workforce that is served. So VHCV statute allows us to go up to 120 of area median income for our homeownership programs and 100% for our rental. Most of the households served are a little lower than those households. But when we look at the average wages of the professions listed here below and many others, child care workers, people in the construction trades, people in the health workforce, these are all professions that the average wage paid to an employee qualifies that employee to live within affordable housing in Vermont. And so as we hear employers talk about how recruitment and retention is a challenge here because of housing, we know that when we invest in affordable housing, we help meet that need for those employers. I think a great example of this is Beta Technologies was test ified a couple of weeks ago and saying with their expansion, they're looking at hiring, it's like a tech a day for the next two years, paid between 50,000 and $60,000 a year. That puts that person at about 60% area median income for Chittenden County, qualifying them to live within the units that we're helping produce. And I'm sure many of those are renters, many of those will struggle in the rental market here in Vermont. The picture that you see here project that hasn't happened yet. It's a twinkle in the developer's eye. But it's a potential partnership between Jay Mountain and Rural Edge, the nonprofit affordable housing developer in the Northeast Kingdom. Jay came to Earl Edge and said, we have a flat faded building. We'd like to rehab. Can you do it in such a way that it's going be affordable to a lot of our workforce? And Earl Edge is working on building out that proposal that we hope to see come before the board if we have resources to review proposals like that next year.

[Rep. Michael Mrowicki (Member)]: So a couple of questions, one for Wayne and then me. What happens when somebody qualifies and gets them a house? What happens subsequently if they make more money and raise up another level? Do they have to leave?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: The federal government, I think, has a rule around next available units. We also So when somebody else leaves, in many of our developments, we restrict 80% of the units, but we leave a few for market. So if somebody moves out of the market unit, maybe that would become an affordable unit. So we don't try never to our statute tells us for not to displace people.

[Rep. Michael Mrowicki (Member)]: So you're always it's a system set up so you're not trying to displace people. Info. More likely, if they make a lot more money, they're going to want lot of different housing.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: That happens too. You're somebody living in rental housing and they get changes in their occupation, maybe they want to become a homeowner and move on.

[Rep. Robin Scheu (Chair)]: My question is about transportation of these areas. So we have transportation is one of the other big issues that people have around housing. And so I know Cambrian Rise has bus stops and things like that. It's pretty obvious that they could have that happen. But do you work with the transportation companies? Or how does that work?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: We ask the developers as part of the application process, what's the access to transit? That's obviously changing with the changes in our ability to support public transit. But one of the philosophies that goes into our housing and conservation model is really around smart growth. So are you close to a bus stop? Are you close to other services? Are you in a village center? Quite frankly, we don't do very many sprawl projects because they're expensive when you don't have the infrastructure available to you to build. It's much more expensive and much more regulatory intensive when you have to put in on-site water and septic systems. So I can't tell you that none of our projects would constitute too far away for people, but that's part of our screening process.

[Rep. Robin Scheu (Chair)]: And so you just reminded me of this new CHIP program that's just getting started. Do you see yourself playing a role in those areas?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: We think that people will use chip to the extent that it makes sense to do so. I'm not sure it's gonna work well, and I'm still waiting to see what the financial models bring us back for really small rural projects. The other thing about CHIP is the more valuable the homes are that get built, the greater the increment that gets produced to help pay off the investment. There's all-

[Rep. Robin Scheu (Chair)]: Incentive is not for

[Rep. Michael Mrowicki (Member)]: affordable housing.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: Incentive is not directly for affordable housing. There's a little bit of a benefit in terms of a higher percentage for affordable housing, but it's gonna be a good thing. I'm not sure it's gonna turn the world on its head, but I absolutely think that what holds back some communities is not having access to infrastructure. So for a community like the one I live in of East Calis, where we have one public, one community water system, if Chipp could help enhance the water system, maybe there'd be some more housing development in our village. The

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: legislature has asked VHCB to focus on serving the most vulnerable Vermonters and enhancing our shelter system. And so in the last five years, the HCB has invested about $50,000,000 in Vermont's shelter system. That about doubled the size of the Vermont shelter system. That added three thirteen beds and invested in improving the quality of nearly every bed across that system. It helped stand up many new shelters. This shelter in Lamoille, Hyde Park, is one of those examples. This is a community that did not have a year round shelter. We partnered with Lamoille Community House that stood up this shelter. It was a nursing home that was closing down and was able to be converted to this use. So we've done The majority of this work has been funding that is either directed for shelter that has flown through VHCB or funding that our board Our trust fund dollars that our board has directed Or general fund dollars that our board has directed towards shelter. In the last two years, as shelter dollars have flown through AHS, they've asked us to administer those to projects. And we know that the most cost effective way to prevent homelessness and to get people out of homelessness is to ensure that there are deeply affordable homes. And this is a place where we've seen the value of the state's repeated commitment to building out permanently affordable housing over the last four decades. Over the course of this decade, so in the last five years, about 2,000 Vermonters experiencing homelessness found housing within the permanent affordable portfolio. There were only 700 new homes that were built dedicated to people exiting homelessness. So people are entering into homes that already existed or homes that weren't designated as homes for people exiting homelessness within this portfolio because of that commitment to affordability, because of that commitment to deep affordability. And we're also seeing this portfolio really prevent homelessness. The average income of renters in tax credit supported housing, which is the majority of the rental housing the HCV helps to fund, is $17,000 a year. So these households are extremely vulnerable, and having a stable source of housing is preventing them slipping into homelessness. And this woman here, Baroxi, lives in Reed Commons, that first building that you saw on the intro slide in St. Albans. She worked throughout her career in health care and found herself homeless for three years after her retirement. And she was able to find housing in Reed Commons when it came online. And what she said when she came into her home was that she felt peace of mind in a way that she hadn't had for many years. When we look at who is renting in the state of Vermont and why we have this challenge, why there is this gap, I think this pie chart here is really telling. What this shows is the incomes of Vermont's rental population. And what you see here is that one quarter of Vermont renters earn enough to afford a market rate apartment. So the apartments that the market can afford to produce. And then three quarters do not earn enough. And so there are three quarters of Vermonters. If we want to add homes to meet their need, to make sure they're not cost burdened, the homes need subsidy. And I think they really see this stark contrast between the average rental wage, which is about $17 an hour in Vermont, and the average wage you need to afford a two bedroom apartment. So say you're a renter with a kid, is $2,900 an hour.

[Rep. Robin Scheu (Chair)]: Just track the actual jobs or do you just get the wage information? I'm just thinking of who's in that who's in the 23% that are making cash cost of income of less than $20,000

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: Probably, I mean, it's probably people who don't have a full time job or living on disability income. So part of our mission is to serve elderly and disabled folks as well.

[Rep. Robin Scheu (Chair)]: Yeah, I guess I was not thinking the town would be that big, but there it

[Rep. Michael Mrowicki (Member)]: is. Thank you.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: As we look at how VHCV fits into the broader housing strategy here in Vermont, we really looked at how do we define the housing need in Vermont. And VHFA and the Department of Housing did a housing needs assessment that said we need about 30,000 homes to meet the need in our market. BHFA then took it a step further and said, at what affordability levels do those homes need to be? Because we could build 30,000 million dollars homes and we would not house Vermonters. So what affordability level do we need those homes to be to meet Vermonters' needs? And what they found is that especially on the rental, but also on the home ownership side, a significant number of these homes, these homes in blue on the rental side and blue and orange on the homeownership side, are homes that are supported by investments that flow through VHCb and through affordable housing. And homes that really, because of the cost of labor, because of the cost of materials, can't be produced new by the market. So in order for Vermont to meet its housing goals, we need to continue to put subsidy into producing these homes that are affordable to Vermonters. And that's the role that the HCV plays. And because of the support of the legislature, we've all collectively been able to play that role over the last five years. This year, especially, we have seen a number of ribbon cuttings, of groundbreakings, and we're going to be seeing homes open across the state that are available to Vermonters. So here, you're seeing Burlington, you're seeing Middlebury, Waterbury, and Putney. There are others around the state. I will say I was talking to someone who works for Windham Windsor Housing Trust, who said that they have handed out or sent out 1,000 applications to people who are interested in those 25 homes in funding. Demand is pretty endless, and we are at the peak of opening these homes this year because of the investments over the last several years.

[Rep. Michael Mrowicki (Member)]: How are you estimating the number of additional homes that we need during a period of time that isn't a labour market statistics? Must be looking at statistics.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: So this number comes from the housing needs assessment, which is a HUD requirement of the Department of Housing. And they contracted with that housing finance agency to come up with that estimate. So I'd say they are the data experts who could tell you more there. But what they're looking at is how many homes do we need to house Vermont's, the 2,600 Vermonters who are homeless, how many homes do we need to normalize the vacancy rate to a healthy housing market? How many homes do we need for anticipated population growth, but also the fact that our household size is shrinking? And that adds greater demand on the number of homes. So they're really looking broadly at those pieces. Anything else that they're looking at that I didn't capture I

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: think those are the main things. We look to them to be the data experts rather than trying to

[Rep. Michael Mrowicki (Member)]: I was wondering if they were also looking at number of jobs that, you know, available jobs that haven't been filled.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: You know, I think if you were the secretary of commerce, what she'd say is, I talked to all these employers who would create more jobs, fill more jobs, if only people who applied could find a place to live. So I'm not sure how well baked into the numbers that is, but I've heard her say, talks to employers all the time who say, If I could hire 10 more people, would, but they have no place to go.

[Rep. Robin Scheu (Chair)]: Marty and then Tom?

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: I have another question on that slide with the graph you had. Just a confirmation, I know that you mentioned here affordable at a certain amount of area median income. Does affordable mean 30% of a person's income? Is that what you're Yes. In most cases, yes.

[Rep. Michael Nigro (Member)]: With everything, with cost of living plus you being at some other things.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: I mean, there's a certain formula if you're a renter, there's a slightly different formula if you're going to be a homeowner because then you'd have to count in your property taxes, insurance, as well as your mortgage debt. So 30% is the general number either way.

[Rep. Michael Nigro (Member)]: And I just, one of the factoids that I always hang on, it's that I always want to say is 200 plus 100,000 Vermonters file tax returns for $60,000 or less. And so as a standard of what is a certain percentage of the median income, and that's from zero to 60,000. And that covers all the HOT programs, covers all of the voucher programs, it covers all I mean, so that's like over that's close to 400,000 Vermonters who live in households where their income qualifies. The fact that we're limiting it here to I mean, that the conversation is here as opposed to the need, the potential need is pretty

[Rep. Michael Mrowicki (Member)]: amazing. But that doesn't consider the fact that some people have worked their lives and have a home that they've already invested in over those years, paid off. They have low income within the range of this but they are otherwise able to sustain the household with a lower income because of their history. Yeah, no question. It's just a range of we all know someone within the

[Rep. Michael Nigro (Member)]: 400,000 to 200,000 taxpayers that are at 50 or 60% of their income been going towards housing. And so it's just a factoid. So I called it a factoid.

[Rep. Michael Mrowicki (Member)]: If I didn't have this little job, I'd be in that category.

[Rep. Robin Scheu (Chair)]: Quite a little job. Oh, this little job. Okay, continue.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: As I said at the outset, you invested a lot of money in us over the course of the pandemic. This chart shows you how those commitments played out. So 2022 was a very big year, a little bit of a drop off in 'twenty three, jumped back up, and now we're on a downward trend. And that just tells you that when we come in in a year or two, we're gonna have less new projects to show you. It gets to a different issue, which is what's the signal to the market and what will they be able to produce that we'll talk about in a minute. I did wanna hit a few points here, which is to the other side of that big chart that I showed you with all the numbers, that a piece of our work is to support people who we view as vulnerable. We were in Bennington last year, the opening of the first of two recovery residences there, and the minister who spoke, it's an old Victorian building right on Main Street, I think ten years ago, maybe it would have been controversial to have a recovery residence there, but the community was very supportive the day I was there. He said, Anybody who walks into this building is gonna feel like we care about them. It's just a beautiful piece of work. Two weeks ago, I was in Burlington for the opening of Ceteria House, which is the first time that Pathways Vermont, which does excellent work, is actually owning a piece of property rather than renting it. This property will double their capacity to serve youth and psychotic episodes. And the love that was put into this building was the same thing that the minister Bennington spoke of. Anybody who walks in that building will feel valued and supported by that community.

[Rep. Robin Scheu (Chair)]: Is this the one that went from four to nine units? Yes. And we funded that a few years ago, and now we're seeing it.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: No, it may not be the same.

[Rep. Robin Scheu (Chair)]: It was something with the Terrier House.

[Rep. Michael Mrowicki (Member)]: Oh, was.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: There may have been an appropriation.

[Rep. Robin Scheu (Chair)]: Yes, there was.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: We've put in, yes, through the agency of human services. But that was not enough to get the job done and be money. And so just a very moving day. Farm worker housing is something we began during the pandemic, and it's now gonna reach 300 farm workers in farms across the state. Sometimes it's just a small repair job to make housing more habitable. Sometimes we're replacing housing that is absolutely uninhabitable. We also do a lot of work primarily with Cathedral Square, but sometimes with others to do elder housing. And one of the things we did many years ago was to get the initial funding through the MacArthur Foundation that led to the establishment the SASH program statewide. We hope we're gonna break ground this summer if the last bit of financing comes through for elderly housing in Highgate, Vermont. You, passing Act 186 and responding to the needs of parents who spoke here quite eloquently and continue to be in the building, provided planning funds for three pilot projects for people with intellectual and developmental disabilities. We've been working actively with that group. One of the places that the Land Access Opportunity Board has been very involved in convening the parents and supporting them, and we've now funded not just the three initial projects, but a total of six projects. The two you see here are for very different sets of needs. The St. Paul Street project in Burlington, which is now under construction and got that special appropriation that you passed through us, will provide pretty much independent apartments with some level of support. The Riverflow community is a place for people with more intense supportive needs and is modeled on a national model. We just got an application, we helped with the first home, which was a renovation, and they plan on that property and they're in permitting now to build, I think about four more homes there. So that's now underway. Will you be able to do more of this each year? I think that the need is really important. I think with a lower budget, how much we do will be a question, but we will, mean, will do as much. We're gonna stretch our dollars as far as we can. You have a report that from this last legislative session, have a study group that's recommending in order to meet the needs of what they estimate to be 600 Vermonters, that there'd be a special appropriation of $10,000,000 a year for the next five years to address the need. But we'll do something. One of our asks when we said to the governor, if there's one time money was $3,000,000 specifically for this group of folks. One of the things we do that we think is really important and shows the value that you get, We talked about, probably talked a few minutes ago about permanent affordability is in the single family home ownership market. This last year, last fall, we opened a new neighborhood in Shelburne, Vermont. It includes 94 homes. I'm told 80% of the folks who live there are in the workforce one way or another. Among those homes was a 26 unit condominium project for home ownership. Among the people who moved in was a state police officer, folks who worked at Wake Robin. One member of this household is a chef at Shelburne Farms. There was a childcare worker, single parent of a child who may become one of the last people until the feds change and help us more and be the last section eight to home ownership, homeowner, but she works in childcare. So you're seeing in our home ownership programs, vast array of the Vermont workforce. About 12% of the people who have bought homes that have resold were working in healthcare, 11% in education. We took a look at the last 55 resales of homes because we've invested in about 1,400 homes. There have been about 800 resales over the years. The last 55 of them, the investment we made originally, which may have been in some cases ten years ago, in some cases thirty years ago, was an average of $27,000 to get people into a home. Without any additional subsidy, what's happening is when the home comes back on the market, the subsidy has grown to $136,000 So the average income of somebody who's able to buy one of these homes is at 83% median. They would otherwise likely be shut out of the home ownership market. So we think that this is a program, again, in terms of your investment, is recycling back from one generation to the next. And I think that's one of the key differences among our programs. I'm going to shift for the last part of this presentation to our conservation work. And conservation includes what we call rural community development. It includes public recreation, includes natural areas. It includes a program called the Rural Economic Development Initiative and Historic Preservation. We're always looking for multiple benefits. And I think one of the things we recently did was to help a group called Vermont Adaptive buy their first permanent home in Rochester. And for those of you who are not familiar with Vermont Adaptive, obviously what they do from the photograph is to work with people who have experienced disabilities. And for veterans, whether they're Vermonters or not, their services are free. So this really tugged at my heart in terms of conservation really meeting an important social need. There's value to the land that won't be developed, but this will also be an economic boon for Rochester. They hope eventually to provide housing for as many as 18 interns on their campus. They'll be spending money in the community, as well as working with the people who come there for their services. So we think this is a great win. Last fall, I went to Walcott, Vermont for the opening of the town forest. And on a Saturday morning, there were more than a 100 people in attendance in Walcott. And aside from the wonderful water quality benefits and recreation benefits, and the trails on this land also will tie to the Memorial Valley Rail Trail, This will be a science lab for the kids at the elementary school. So that's where the ceremony was. Forest is adjacent to the elementary school. A whole bunch of people were ready to get on their mountain bikes as soon as people like me stopped talking. It was a wonderful event, and I think a great asset for the community. Farmland conservation, this woman is a goat farmer in Bennington who benefited from our program in two different ways. One was the purchase of development rights helped her financially in general when we're buying development rights from farmers, reduces their cost by about 60%. So they have less debt. She also got help from our Farm and Forest Liability Program, which is gonna come up with another slide or two in terms of business planning and technical assistance to be a better business person. And this is some data on the farm and forest liability program. But in general, we're seeing increases in net income. We're seeing people, 82% of the participants add jobs. This particular fellow, Mills Black, is it Black Locust in Putney, which gets used on trails, so it's supporting the recreation system. We helped him win a grant that helped him build his new mill facility and so this is one of the things that doesn't have the kind of real estate long term benefit, but I think has benefit to the working landscape and benefits to the entrepreneurs who work it. And so it's a program we feel strongly about. We spend a little over $2,000,000 a year on this program with the appropriation you give us. So when you think about conservation, you may not immediately think about economic development, but that is what's happening with this program. About 2017, we were asked to support an initiative called the Rural Economic Development Initiative. And this is intended to provide grant writing support to small businesses and to small communities. We've invested about 1,200,000 in it so far, and the return on that investment has been so far $35,000,000 in successful grant applications. This was a particularly big year because we helped a number of communities apply for disaster recovery grants. So maybe our numbers jumped a little bit from last year But of in general, people are accessing capital and able to do things that they would otherwise not have been able to do. And communities are in a position, if you think about how well staffed most of our small towns are to apply for funds, some have gotten help with applying for infrastructure funding. In this particular example, Salvation Farms won a large grant and they work with farmers who have more than edible and quality product, but not necessarily beautiful product that you want on the store shelf. Think is going to institutions of various kinds, whether it's schools or hospitals or some when there was funding for it to food shelves. So they're doing a great job. We helped win a big grant across the state.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: And just one note on the ready, one of the reports that came out of Act 181 was a working group to look at how can we as a state improve our system for delivering technical assistance to small rural communities so that they can adequately access programs, whether they be federal or state programs. It was called the Vermont Rural Technical Assistance. I forget what the E is, maybe economic. But the barter report really named Ready as a program that was highly successful and useful to these specifically small rural communities in accessing these funds. And I think this is a trend that we see across our programs where whether it be how do we meet the food security goals of the state, how do we ensure that Vermont farmland transitions to new farmers as farmers age out, how do we deliver technical assistance to small towns? These initiatives often look towards VHCb as an implementing partner to help really realize these goals.

[Rep. Michael Mrowicki (Member)]: I'll take this question, please. Yeah.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: When you talked about farm and forest viability, and you talked about global economic development, there are obviously others in the other organizations that are involved in these things. I'm just wondering, what's your special sauce in this? So we understand what your kind of distinct contribution is to those efforts. So we work really closely, specifically with the Agency of Ag and the Agency of Natural Resources, and they sit on our board. And where they look to us is really in securing the land. So if ANR is looking at expanding a state Park, they're looking to use VHCV dollars to help with that acquisition. The Agency of Ag, as they're looking to plan for farmland transition, they're turning to the HCV programs to help farmers get onto land.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: But we were asked this question in a different context yesterday about the working lands program. So if that's the thing that's on your mind, what I'd say is what you'll find is from the farm viability program is that technical assistance and business planning has made lots of applicants successful in seeking working lands grants. And in fact, sometimes the ag agency, and we sit on their advisory committee for those grants, will see an application and say, this person needs help before we can give them a grant and refer to them to us for business planning. So there's an awful lot of collaboration and coordination that goes on among the agencies to make sure we're getting to the right place. The Rural Economic Development Initiative was actually the brainchild of Ted Brady when he was Deputy Secretary of Commerce for Governor Scott, and he knew that the Farm Viability Program could do a good job because of his relationship with it over time. And he suggested the senator story that we take it on. And we have tried to stay in our lane of focusing on recreation businesses, food businesses, businesses like the one in Putney, things, historic buildings that are gonna get used for So we're not trying to do everything for everybody, but clearly when you don't have the capacity or the expertise to write a grant and then you get it, then the chances of being successful are much higher. And if you just think about how staffed so many of our communities are, where, you know, it really runs on volunteers, this expertise makes a difference. This is our sources and uses budget. I'm not going to dwell on it. It's in our financial package as well. As our financial picture and more sources have come to us, it's perhaps not as useful a document as it once was. What I'll say to you about our budget overall is that it is lower than last year's, not just because of one time funding, but the end of some other federal programs. Our operating budget, we are proposing no new positions for VHCB. We are the administrative home for the Land Access Opportunity Board. So the extent you see growth in our operating budget, as they're growing and maturing there, they've added several staff that will be reflected in this year's budget, but our base programs are not growing staff wise this year. Biggest operating cost driver, as I'm sure you've heard of other places, is healthcare. Somebody could pass a lot of deal with that, we'd be grateful. That's another issue that we're managing. I know we're almost at time. This is a pipeline slide, and I wanna say two things. One is that developers, and I said this a little bit earlier, don't want to spend money if they don't think they can be successful, whether that's on an option agreement for a piece of land, whether it's on engineering or architecture. So our pipeline is a little bit softer than it's been the last several years because people know the state's budget is tightening. That doesn't mean there isn't great opportunity. And to the extent that you see this is an architect's rendering after the city of Burlington rezone the South End, this would be two zero four homes if they can be built. They've just given us an application a week or two ago that would take, we don't know yet, but $6,500,000 to $7,500,000 to build 67 affordable apartments within those two zero four homes. But I would say to you, just as I said earlier, that there's a phase three in Newport, that there's another phase that can be taken on at the Putnam Block in Bennington that Montpelier bought the old Elks Club golf course and has an RFP out for development there, that there's a site, the Austin School site, which got some state money last year. There are many, many opportunities to build more housing if we can figure out how to financially take advantage of it. And the last thing I'll say to the pipeline goes to the slide Polly showed you about where Vermonters incomes are. There's only so much housing we need for people who can buy a $600,000 house, and that will take care of itself. But for the people who need a house, who have a more modest income, it's gonna take capital to bring down the cost. That's fundamentally what our problem is as a state, and without it, we will not meet our housing. And there's plenty of activity on the conservation side as well, continues to be great conservation opportunities that I hope as we demonstrated, will not just will support nature and natural communities, but will also support Vermonters and enhance all of our qualities of life.

[Rep. Michael Mrowicki (Member)]: What do you look at the question? What's your total staff? I mean, you already mentioned it, but.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: I think that we are 47 and LAOB is seven in this budget. No new positions. We do not have any new positions. If I were to add a position, it would be for the Rural Economic Development Initiative.

[Rep. Robin Scheu (Chair)]: I know as much money as we could throw at you, you would find ways to use it. So that's not our problem. See, sadly, the COVID era of all those wonderful funds that we had. It's pretty much gone. I know you have a lot that showed up when Doug Farnam came in in December to show us the ARPA stuff, but we know that they're all obligated and it's just a matter of getting the money out the door for the various.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: I think we gave you a special report on ARPA and the last ARPA project is actually that VFW project in Burlington, which open in a few weeks. So those dollars will clear out in- There are other projects we funded that don't begin until this spring and summer and so on. So yes, we look at our balance sheet and say, there's money sitting there, yes, but it is obligated.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: I feel sorry

[Rep. Robin Scheu (Chair)]: about you spending the money that we gave you and spending it. Thank you. Thank you for all you are doing for all of Amman. Really glad you're there. Always love seeing the pictures. Have you ever had a legislator where you haven't had a project in your town and you haven't been able to show a picture?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: One year I was in here when Chair Toll was in your chair, and we didn't have a picture from Danville that She called me about a year and a half ago and said, there's a community group that is anxious to restore the train station in Danville, which sits on the rail trail. And we had a beautiful opening of that facility this year. So again, historic preservation project that speaks to our conservation, that speaks to the recreation industry in the state. So I think she was thrilled that we got to Danville. And we have a housing project that should begin this year. Do

[Rep. Michael Mrowicki (Member)]: you know where's the site for the Highgate building?

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: I don't know specifically, but it's

[Rep. Wayne Laroche (Member)]: in the village. I'll go down

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: and see him shortly. But I will get an address We'll

[Rep. Wayne Laroche (Member)]: need to. Got to unmute and we come in.

[Rep. Robin Scheu (Chair)]: Okay. Thank you both very much. You. Okay. Your contact and

[Rep. Michael Mrowicki (Member)]: let me

[Rep. Robin Scheu (Chair)]: know how to find you.

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: Oh, that's good.

[Gus Seelig (Executive Director, Vermont Housing & Conservation Board)]: So you know how to fund us or to find us? Thank you so much for your time and all your support. Deeply appreciate it.

[Rep. Robin Scheu (Chair)]: Thank you. So, committee, we're gonna take a break and at 02:30, ADS coming and then ADS is going to stay and Abbott's going to come and we're going to try to get to understand ADS a lot

[Polly Major (Director of Policy & Special Projects, Vermont Housing & Conservation Board)]: better than we do now.