Vermont Legislature SmartTranscripts:

[Matt Kent, Senior Counsel to U.S. Representative Becca Balint]: I'm at work today.

[Marc Mihaly, Chair, House Committee on General and Housing]: You are live. Okay. Thank you. Good morning, everybody. It is all day today, the November 5, and we are no longer on daylight savings time. And this is the House Committee on General and Housing, and my esteemed compatriot from the Senate, Allison Clarkson, will announce her committee.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: We have two members of our five members, Senate Economic Development, Housing and General Affairs, but you have the chair and the vice chair here, which is What counts in court? At least it's a good beginning.

[Marc Mihaly, Chair, House Committee on General and Housing]: So welcome, everybody. Thank you very much. This is a hearing that we call to try to get a handle, as much as anyone can get a handle, on what is happening with respect to the federal government. We've got a lot of witnesses, so we want to focus We want on So our purpose today is try to focus on the federal situation, and specifically what we're hoping to hear, of course, from the representatives of our esteemed congressional delegation, If any of you heads in Washington, D. C, my sincere condolences. And what we really want to hear very specifically is, what do you know, what's going on, and even if you don't know it, what do you think? Because we're very aware that, of course, the future is, as the comedian Mort Saul said, lies ahead. The future lies ahead, but what we really mean is we don't know what's going to happen. We know that, but we appreciate your speculation. We're going to

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: start And may I just add one thing? Yeah, please. And how we as a state, with not the deepest pockets in the world, can fill some of the gaps, because we're clearly going to have to step up to the plate to feed and house and clothe and do many things that we haven't been called to do in part, but much more is going be asked of us. And I think we'd also appreciate some of your early thoughts on how we can partner further, because we have never not had partners with our federal government. We have never felt so at sea and without our feds having our back. Thank you. You just had

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: a question.

[Marc Mihaly, Chair, House Committee on General and Housing]: So, guess I should say, I'm Mark Mahaly, I'm chair of the House Committee. So why don't we get started with the federal delegation, Miles, Matt, and James, would you pick whichever order you'd like? We have essentially a little more than twenty minutes for the three of you, and so I'd ask that you keep your time within that framework and allow a little time for questions from the committee. Thank you. Whichever one of you would like to go first, Miles?

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: I think James from Senator Sanders' office.

[James Paradisis, Outreach Director for U.S. Senator Bernie Sanders]: Okay. Thanks, Miles. Good morning, everybody. Just for the record, my name is James Paradisis. I am outreach director for senator Bernie Sanders based in his Burlington office. Gladly, yes, I'm I'm here in the great state of Vermont and not in DC. Thank you so much for inviting me and the rest of the delegation to share a few things with the committees on federal housing policy, the current state of the federal budget, and how these may impact Vermont. As you all know, we're currently on the thirty sixth day of what is now the longest government shutdown in American history without a clear end in sight. This lapse in funding impacts all federal agencies and by extension many functions of the state. Self funded agencies like the United States Postal Service are least impacted, but the Trump administration has shown little regard for norms and has taken questionable steps to pay some workers but not others despite the instructions of Congress. This also means that the country pardon me, that across the country, there are housing programs that are currently unfunded due to, HUD's inability to distribute some grant funds. There's a great deal of uncertainty around HUD's COC funding as they have indicated that they intend to cut funds for permanent supportive housing in the existing fiscal year '25 COC programs with a reissued notice of funding opportunity, NOFO, despite these funds being previously approved by congress. The shutdown has delayed any action at this point. Additionally, a group of Republican representatives are asking HUD to extend the FY '25 grants, which expire, in '26 for an additional year given pardon me, calendar year '26 for an additional year given the compressed timeline for 2025. Senator Sanders notes that the cost of housing is having an enormous impact on many Vermonters, and it is on his mind as the shutdown continues. The senator is fighting for real negotiations so that we can prevent the doubling of health insurance premiums and so that we can protect the 45,000 Vermonters who are at risk of losing their insurance due to cuts to Medicaid. At a time when 31% of homeowners and 51% of renters are paying more than 30% of their income toward housing in Vermont, We cannot allow them to become further burdened due to soaring costs of health care. That is what this fight is about. Recently, Senator Sanders surveyed Vermonters about their experiences with housing costs and asked them to share those experiences. Most respondents, 51%, told us that they spend more than 30% of their monthly income on housing. And in the senator's view, pardon me, with 16% of respondents spending more than 50%. That's unacceptable. And in the senator's view, instead of giving over $1,000,000,000,000 in tax breaks to the wealthiest among us, we should be building millions of units of low income and affordable housing across the country and in the state of Vermont. Vermonters desperately need this investment, and it is a major priority for senator Sanders. We heard from folks like Patrick in Windsor who shared that he and the three people that he lives with are all adults who cannot afford to get into the housing market because a typical property is set at a price range that only upper middle class tourists can afford. These are pressures that people are facing across the state, and they must be addressed in effective, creative ways. Senator Sanders is proud to have introduced the National Housing Trust Fund, which has helped to create affordable housing across the country and is based on the Champlain Housing Trust model. And right now, he is looking at other ways to bring funds for housing into Vermont. As ranking member and former chair of the Health Education Labor and Pensions Committee in the Senate, the senator has been a convening force in discussions to bring to Vermont some of the over $7,000,000,000 in funds managed by the AFL CIO's Housing Investment Trust, also known as HIT. He sees this as one possible way to develop additional housing while providing good paying union jobs, workforce development, and apprenticeship opportunities needed to expand the workforce that we must have to meet our housing goals. We would invite legislators to speak with us about HIT, and we are happy to put you into touch with those at the Investment Trust who can help to answer questions. With that, I will wrap my time, and again, thank you so much for having us here today. I can pass it to Miles.

[Marc Mihaly, Chair, House Committee on General and Housing]: James, thank you very much. What I'm going to do is ask if people here want to ask questions to the delegation, to wait till the three are done with their affirmative testimony, and then we can have a little time for questions. We have seventeen minutes left. Gentlemen.

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: Great. I will keep things quick. For the record, I'm Miles McGerman. I'm a constituent services representative for senator Welch covering housing amongst a bunch of other things. I'm also based in Vermont. Thank goodness. That said, I wanted to talk a little bit about the budget process and just kind of what is on the radar going forward for congressional funding of housing. All of this is with the caveat of nothing is passed. None of this is law. But this and I'll talk about the senate side specifically because I know Matt can cover the house side. Looking at the the T HUD, so transportation, housing, and urban development budget on the senate side, things are not as bad as they could have been. The president's budget was incredibly, incredibly deep cuts to housing programs. The senate's budget is is far more reasonable compared to the house's budget and the president's budget. So I think that that's important to say. And, you know, right now, it has not passed through the senate yet, but I think at some point, it'll either be a part of a minibus package, so, like, a series of appropriations bills or potentially a continuing resolution deal that gets us out of the shutdown, but that's just my speculation. Looking at the budget itself, I sent in some notes with all of this, but I'll just run through them pretty quickly. Thank you, Allison, for showing me that you have it.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Megan makes all things possible.

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: I love it. I love it. Great. So I can run through it pretty quickly. So as you can see, the top line number there, it's about a 3,100,000,000.0 increase compared to the f y twenty five budget, and it's about 5,500,000,000.0 more than the house's budget. The first thing just to note here is the tenant tenant based rental assistance pop bucket. That's things like section eight housing. Right? You'll see I highlighted there that there's about 34,000,000,000 for contract renewals, which is an increase. The senate's budget kind of focuses on renewing existing contracts. As I'm sure you all know, you know, rent prices continue to go up. People renew those rental agreements with their landlord, and section eight has to pay more per person they are serving. So while this increase is good, it's certainly not enough to maintain the number of vouchers that we have right now in the state of Vermont. I see Kathleen Burke will be speaking later, and she is by far the expert on this. So I will let her kind of delve into the impacts on the section eight program. But it's worth noting just even though there is more money coming in, it will still be more difficult to get new vouchers in particular out the door. So that's one concern and one area I just wanted to highlight. Moving down through this through what I had sent in here, you'll see the senate budget has a slight increase in project based rental assistance. So those are the vouchers that are connected to specific housing projects. Right? So when a new building is built, you know, some of the vouchers are attached to that building. So, again, there's slightly more money in that, which hopefully will translate into, you know, those vouchers still existing, at least for us in the state of Vermont. Moving down, there's a reduction in the senate budget of about 600,000,000 in the public housing operating fund. So, you know, this is kind of that capital upkeep. And, again, Kathleen can speak more to the depth on this, but already what we're hearing at the delegation level from our folks at the public housing authorities is a lot of concern about budget shortfalls and just not having the money they need to maintain their properties. They can work with HUD on that, but one of the real challenges during a government shutdown is there's no one at HUD for them to talk to right now. So that's an ongoing challenge of the shutdown that is impacting public housing authorities across the state. I believe there are three or four public housing authorities who are in shortfall and would be working with the shortfall prevention team at HUD, but just don't have that point of contact right now. Moving through, there's a bit more funding for both supportive housing for the elderly and supportive housing for persons with disability. Not a dramatic increase, but, you know, looking at this budget, at least it's not dramatic cuts, which is what had been expected. And then finally, homelessness assistance grants. You can see it kind of includes a spectrum of different grant programs. There's about a 480,000,000 increase in the senate budget there, so a pretty serious focus on homelessness assistance, which is is good to see. I'm kinda trying to keep it positive because, obviously, there's a lot going on, but we'll move into the community development side. This is where it gets a bit more negative. You know, programs such as the home program stay level funded. The pathways to removing obstacles to housing, the pro housing program would see a $40,000,000 reduction. And then CDBG or the community development block grant, that's about a $200,000,000 reduction. I wanted to focus on these because these are really and Gus Selig from VHCb will be able to talk about this more. But, you know, these are the tools in the toolkit for the state of Vermont to build new housing. And I think one of my big concerns just covering housing for senator Welch is the legislature has made incredible investments. The federal government has made incredible investments. But as those federal funds are pulled away, there will be less and less funds to build new projects. Right? Anyone who's been to a ribbon cutting can tell you there are 20 different sources that go into making these projects. It's a bit of a jenga. And as that funding is pulled back, it'll become harder to enable new housing. So just skipping down now, I included a chart there for you to look at. I'll quickly talk about just federal housing legislation coming up. I'll start with the one big beautiful bill act, OBBBA. And, specifically, there are provisions in this bill. There's a lot of harm done in this bill. Senator Welch is not supportive of this bill, but there were housing provisions in here that were good. So starting with the negatives, it eliminated the GRRP, the Green and Resilient Retrofit program. You know, this was a huge chunk of funding in the inflation reduction act that was meant to I think it was over a billion dollars that was, you know, meant to basically allow for energy efficient retrofits, climate resilient projects at HUD properties. Very important and really difficult to see get cut. And the other hard cut is the elimination of a lot of the housing related actually, all of the housing related energy efficiency tax credits. So you can see a list there. This is billions of dollars in tax credits that are being taken away from pretty much anything with the word climate on it. And, you know, this will just make it harder for people to, you know, do things that they need to, like weatherization or when new homes are being built to meet the energy efficiency standards. So those are really difficult to see and things that senator Welch will continue to highlight and fight for as we move forward in congress. On the upside, rolled into OBBA was the affordable housing credit improvement act. This was something that we had heard from the folks at the Vermont Housing Finance Agency about and their national partners, and that included a permanent increase to the low income housing tax credit, also known as LITEC. So this means the state of Vermont will be seeing more LITEC dollars coming into the state. The thing is is that with things like CDBG going down, there will be less money to match that LITEC funding. And so I think that that's if I'm just speculating here, something important to focus on is as these other federal funds go away, we need something else. We need another tool, and we'll continue to fight for those tools. But, you know, to really make sure that we are leveraging those lie tech dollars and spending every single one of them that we can in Vermont. In there, can

[Marc Mihaly, Chair, House Committee on General and Housing]: see Miles, I just I just wanna let you know we've only got about seven or eight minutes left, so if you wanna wind up there.

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: Yep. So the other bill that we're gonna talk about is the Affordable Housing Credit Improvement Act, and Matt's gonna talk about that one. But, yeah, that's pretty much it. You can see everything else on there. Some good changes, some bad. And thanks, Matt. I'll pass it to you.

[Marc Mihaly, Chair, House Committee on General and Housing]: Thank you. Yeah. That was Great.

[Matt Kent, Senior Counsel to U.S. Representative Becca Balint]: Thanks. Thank you, Miles. Good morning, folks. Members of the committee, thank you for having me testify today on behalf of representative balance. I'm Matt Kent. I'm the congresswoman senior counsel and I am in DC and envious of all the folks in beautiful Vermont on this this call. Today, I'll give you a quick update on the government shutdown. I think my colleagues in the Senate offices have covered the Waterfront on a lot of these things. Want to talk a little bit about the appropriations process and where we are, focusing on the T. H. Bill in the House. And we'll also talk about a bill that recently passed the Senate called the Road to Housing Act, which I think gives us a little insight into what the future of housing legislation looks like. There's some real positives there. Quickly on the shutdown, longest shutdown and longest government shutdown in US history. The last time we were in session in the House was September 19, and it is now November 5. Our friends on the Senate side have been a model of efficiency and legislative action compared to what's happening on the on the house side, which, you know, is usually not the case. The house appropriations committee has set its twenty twenty six funding level, nondefense 37,000,000,000 below the current twenty twenty five levels. They've passed all 12 funding bills out of committee. Three of those have passed the full house. This has been an extremely partisan process, from the Senate. As folks likely know, the bills out of the House are, especially in this current environment, usually a total nightmare in terms of funding levels and partisan riders. It'll get when it gets to the Senate. Those things usually come out and the funding levels get a little more rational. But I will run you through the current House T. HUD bill. Before I do that, I just want to touch on one thing. Obviously, shutdown hangs over everything. Representative Ballin, along with the senators are here fighting for Americans health care, Vermonters health care. There's also a legal process issue that I think has really prolonged these discussions, and that has to do with impoundments and rescissions. Impoundments are when the government, the executive branch refuses to spend money that has been appropriated by Congress. Rescissions are sort of the clawback. The appellants are really causing trouble, at least on the House side, in the sense that the administration is saying that they have the power to not spend any congressionally mandated dollars, which is not constitutional. However, the Republicans on the House Appropriations Committee have not stood up for Congress's power of the purse and are writing appropriations bills with sort of like a ceiling of spending or a range of spending, which is not how you do it. That's causing a lot of trouble. A lot of trust is coming out of the process on the House side. I think Democrats feel that we can't negotiate when we don't even necessarily agree on how the appropriations process works or the fundamentals of appropriation law. That is something I wanted to flag for folks and is really jamming things up on our end. Jumping to T. HUD, it's bad. Overall funding is about 5% less. Are cuts and flat funding to many of the things Miles mentioned, tenant based rental assistance, public housing funding, project based rental assistance. One particularly notable cut is the Office of Fair Housing and Equal Opportunity is seeing about a 65% budget cut, which is something we very much oppose. And also on two programs that are very important to Vermonters in Vermont Affordable Housing, the Home program and the Pro Housing program, those are completely funded in the House T. HUD bill. Just to give you a sense of what we're dealing with with the Republican appropriators. That I will also want to jump really quickly to the Ag appropriations bill. It does not contain a policy fix for the USDA ROR housing issues related to section five fourteen or five fifteen. So that's something we're continuing to track and we're disappointed to see the lack of action there. So moving quickly to legislation in the future or that has passed the Senate. There's a bill called the Road to Housing Act. This is a bipartisan bill, odd bedfellows creation of Tim Scott and Elizabeth Warren. It passed the banking committee unanimously and then passed to the Senate as part of the NDAA. There's a lot in this bill, and I want to be cognizant of time. Some things I want to point out for you folks. It makes the RAD program permanent. This is the rental assistance demonstration program. It upgrades the updates the definition of manufactured housing to include modular units that are not on a chassis, which has been an issue for modular unit programs. Lots of stuff in their various programs to help jurisdictions speed up zoning and permit reviews. And it permanently reauthorizes the Community Development Block Grant disaster relief program, which is, I think something that we're very supportive of. The outlook on the House on that bill is unclear. Bringing it up will lie with Speaker Johnson and the House Financial Services Committee, a guy named French Hill from Arkansas. They have not made their plans known, but we are certainly in favor of moving forward with housing reform that works and can fund affordable housing across the country. So that's it for me. I appreciate your time today and please happy to answer any questions. Thanks very much.

[Marc Mihaly, Chair, House Committee on General and Housing]: Could you again tell us the name of that bill? Sure.

[Matt Kent, Senior Counsel to U.S. Representative Becca Balint]: The road to housing act. It's s 2,651.

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: Yeah. And I'll I'll just flag. I did send in a section by section of that bill for you all to look at, since I knew we wouldn't be able to cover it all today, but you can look through that and see.

[Marc Mihaly, Chair, House Committee on General and Housing]: Thank you. Thank you so much. By the way, we are graced today with the presence of Megan Cannella, who is the grand Hooba. Hooba of committee assistants, but is serving today as blessing us with her presence as our committee assistant. So, questions of we only have a minute or two left, but do members of the committee have questions of the delegation? I have one, which is would any of you well, I guess, Matt, have you heard any rumors of discussions?

[Matt Kent, Senior Counsel to U.S. Representative Becca Balint]: So I have not well, yes, I should say yes. The rumors are flying around. Think the current status quo remains the action is on

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: the Senate

[Matt Kent, Senior Counsel to U.S. Representative Becca Balint]: side. Speaker Johnson has been adamant that he will not call us back until something is concluded over there. Obviously, the CR we voted on back on September 19 only takes us to November 21, so that will have to change. So there's things that need to change about the CR if it were to advance in the first place. I think the rumors that are bouncing around D. C. Today have a lot to do with what happened in the elections last night. It seems as though those results have had a major effect on the president and that might change the Republican strategy. We certainly hope that they like they will negotiate with us because we have been here waiting for them to negotiate for quite some time.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Thank you. Can I understand? Please. So, I think one of the things I'd love clarity on, and maybe Kathleen will help us on this, is what cuts are actually effective immediately now already for our Section eight vouchers, and what are anticipated in addition in appropriations that are being negotiated. So I think that's the thing I'm not fully clear on, and that I'd appreciate what holes do we have to fill immediately and the timeframe for those.

[Marc Mihaly, Chair, House Committee on General and Housing]: I think Kathleen

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: will Yeah, yeah. No, just wanted

[Marc Mihaly, Chair, House Committee on General and Housing]: to call it out. We talked to

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Miles and Matt and James Chad talked about but I'm

[Marc Mihaly, Chair, House Committee on General and Housing]: still not here on the timing.

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: Yeah. Kathleen will definitely go through it, but, you know, what's currently happening is, basically, the section eight program is kind of at its capacity, so to speak. In fact, a little bit overcapacity. And so our current public housing authorities, when someone exits the program, so no longer needs a voucher, instead of that new voucher going to another family, it is just being shelved or taken taken away from the program, so to speak. That obviously is bad for Vermonters who need the vouchers now, but it also impacts the number of vouchers that our public housing authorities get in the future, which I think is even more dramatic. So HUD will look and say, oh, you only need you know, this number is crazy. But a thousand vouchers, we'll just stick you there when obviously the demand is much higher. But, yeah, I'll defer to Kathleen for the rest of that.

[Marc Mihaly, Chair, House Committee on General and Housing]: Yeah. Thanks. Thank you. Well, gentlemen, thank you very much for your testimony. Much appreciated and for your service.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Particularly, are you guys being paid or not right now? Know Beck and Masten not. But I believe you guys aren't.

[James Paradisis, Outreach Director for U.S. Senator Bernie Sanders]: We are not being paid.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Nope. Yeah, so thank you. You and air traffic control, we're really grateful for you navigating the planes on the ground.

[Marc Mihaly, Chair, House Committee on General and Housing]: Thank you.

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: Yeah. Thank you all. And I would be remiss not to add. You can always come to any of us. Any door is a good door As you hear things from constituents or businesses or nonprofits, whoever, please come and talk to us about it. We love hearing from you all. So thanks.

[James Paradisis, Outreach Director for U.S. Senator Bernie Sanders]: Thank you, Matt. Thank you, Miles. And thank you, everyone.

[Marc Mihaly, Chair, House Committee on General and Housing]: So now we are going to turn to the representatives of various state entities here. What we're really interested in is the size and change in your federal support, and which funds are no longer available, and as Senator Clarkson said, kind of differentiating a little as to what losses are due to the continuing resolution, what losses are due simply to the shutdown, which I guess if it persists, asks the November, what does that mean, and if it persists beyond January 1, what does that mean? We have eight witnesses listed, and we have one hour, so you'll forgive me, but I'm going to play timekeeper and make sure that each of you gets a chance to speak, but nobody speaks longer than about ten minutes left. So, first is Kathleen Burke, Executive Director of the Vermont State Housing Authority. Kathleen, welcome.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: Good morning, thank you. Again, my name is Kathleen Burke, I am the Executive Director of Vermont State Housing Authority. Thank you for inviting me in and chatting this morning. I have prepared a couple of presentations for today after speaking with Ratmahalli yesterday, I whittled it down. And after hearing this presentation this morning, I'm going to go ahead and sort of breeze through the presentation that I've created, touching on the highlights so we can really save time for discussion, if that sounds good. So again, I was asked to come in today to talk about federally funded housing vouchers and the impact that reduced federal funding has on Vermont's Housing Choice Voucher program. Again, I'm just gonna touch on this slide. There's a lot of narrative. Sorry, Repmahali. Again, just a little bit of context.

[Marc Mihaly, Chair, House Committee on General and Housing]: I'm telling you, it's a bit here.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: There are, of course, it's

[Marc Mihaly, Chair, House Committee on General and Housing]: such a

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: puppet. A little bit of context and folks can certainly, I encourage you to read these slides. Thank you for this package. There's a lot of good information here and provides historical understanding to why we are where we are today. This slide illustrates the dramatic increase in the subsidy amounts that Vermont voucher recipients have received over the last five years. So you'll see down here in 2015, the average subsidy payment was about $600 per family per month. Over the past five years, you see this trajectory where the cost of a housing subsidy has just plummeted just through the roof, just escalated through the roof. Slide illustrates the housing Did I go too fast?

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: No, it's just your slides are so tiny. I'm sorry. But it's great. We're just talking about Burlington.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: Okay. So this slide illustrates that public housing authorities in Vermont are spending all of their budget allocations. And so if you focus on the budget utilization spent year over year, you'll see I'm sorry, I'm a little too quick on that. There we go. The budget utilization spent year over year, you'll see that historically, for the past five years, although there's been ups and downs, public housing authorities are spending all of their budget authority, which is the allocation that is granted to them from Housing and Urban Development on a year to year basis to support their voucher programs. And what this slide also illustrates, and I need to call it out, is that public housing authorities often have what we refer to as a housing assistance payment reserve account. And those are housing assistance payments that were not spent the prior year that are available to housing authorities to use should there be a funding shortfall during that next year. When Housing and Urban Development funded housing agencies in calendar year 2025, they used our reserve balances to fund our ongoing housing assistance payments need. And so what that means is that for the first time in history, most housing authorities no longer have a reserve of housing assistance payments. This slide illustrates, again, voucher utilization is the green on this slide. The black line is budget utilization. And you'll see in July 2025, public housing authorities were spending 107 plus percent of their budget to support the number of vouchers under contract. So what this means is that there are several housing authorities in Vermont that are in a shortfall situation, and we're gonna talk about that. Again, this is sort of my mantra. I was talking about this in February. The realization of the anticipated funding cuts were memorialized in March when Congress passed the fiscal year 2025 continuing resolution. So we're gonna get down to brass tacks here. So this is the current impact as we understand it for Vermont. And so this slide illustrates those public housing authorities that have an estimated subsidy shortfall for calendar year 2025. And then estimates the number of associated households that are tied to that specific shortfall amount. So let's use the Vermont State Housing Authority as an example. I'm gonna just go through what this slide means. Vermont State Housing Authority has under contract with HODORS authorized, if we have the funds to support these units, 4,495 vouchers. The number of vouchers UMA is a Unit months leased.

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: UMA

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: is unit months available. So unit months available, and this is where it gets nuanced, I'm sorry, I'm so, This is our lingo, and it's not everybody else's lingo. Unit months available are those vouchers that public housing authorities have under a contract with HUD. These are vouchers that public housing authorities competed for and were awarded. The unit months leased, or the UML, is the number of vouchers that that public housing authority was able to lease were the funds that were appropriated to them.

[Marc Mihaly, Chair, House Committee on General and Housing]: So UMA is really authorization, UML is budgeted.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: UML is budgeted. I don't know that I would necessarily agree with that term. Well, I guess it is. Ultimately, it's budgeted. But the way that the funding formula works is essentially public housing authorities will receive an allocation of money depending on what Congress appropriates. Then By budget and then it's appropriated. Exactly.

[Marc Mihaly, Chair, House Committee on General and Housing]: Yes, okay. The difference of 4,400

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: to 3,900 units is you competed to get and were awarded, but not funded. You were only funded for three

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: were thousand originally funded. But what you don't A longer presentation would allow me to get into the nuance of why we're only able to support 3,908 units. Okay. Yeah. Alright.

[Marc Mihaly, Chair, House Committee on General and Housing]: Go ahead. Sorry.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: I No. That's fine. It's it's it's a nuanced conversation, and the ask to get through it in five minutes is a bit of a challenge. So for Vermont State Housing Authority, the number of units leased as of 12/31/2025, what we anticipate at the December, will be 3,860 units. However, we don't have the funds to support all of those units. We're gonna be in shortfall by about $630,000 And that is an estimate at this point based on what we know. And so the aggregate for the state of Vermont is a little over $1,000,000, would support nine forty three households. Now that's a portion of rental assistance for the month of December. So really what that means is that the appropriation that public housing authorities received wasn't enough to support all the families that are currently enrolled in the program for the full calendar year. How will public housing authorities manage the calendar year 'twenty five housing assistance shortfall? Participants will not be exited from the program at the end of the year. For December only, Vermont public housing authorities have committed to making a one time investment using other resources to cover spending shortfalls. Public housing authorities are using a reserve account, it's an administrative reserve account that they can use for housing assistance payments, and they're going to make that commitment to cover that shortfall, a little over $1,000,000 in aggregate, to continue to support those 900 plus families through the month of December. Without federal appropriations bill, public housing authorities will not be able to pay housing assistance payments beginning 01/01/2026. Now, we talk about what is the investment that would be needed to fully fund Public Housing Authority's federally funded Housing Choice Bachelor program. So I'm gonna draw your eye to some important data points on this screen, and happy to take questions. So again, that first column is the number of authorized vouchers. Those are the vouchers that public housing authorities competed for and were awarded over time. The second column are those vouchers that are in use as of 12/31/2025. The third column that's highlighted are the unfunded vouchers as of 12/31/2025. And this is over time because, again, we'll get into the nuance another time, I'm sure. But over time, because of the wacky way, excuse the phrase, that this program has been funded, it's created this downward spiral in the number of vouchers available to Vermont households. And that's ahead. Please finish your sentence and then I'll ask my question. Go ahead. Okay. Of those twelve thirty three, are they what you project by the end of the year? Or were some of these unfunded and then there was some kind of reshuffling to fund them? And those are out of the 8,099 that No, this is is used? So the total number of authorized vouchers available to Vermont as a whole is 9,332. The number of vouchers that we project will be in use at the December, this calendar year, is 8,099. So the $12.33 is the difference between those. And so the value, the cost of funding twelve thirty three vouchers for a one year period of time, these are the vouchers that Congress has not funded, but public housing authorities are authorized to use, would be a little over $18,000,000 I do. As Miles was mentioning, it kind of perpetuates this problem of we're at the 9,000. Right now, there's only 8,000. So next year, when we come back to this, and hopefully we're not back to this next year, but what will be funded? Are we gonna look at that 8,000 number? It'll be less than that number. So it will be less than that number because keep in mind, as I shared earlier, we have nine thirty five families that are due to be exited from the program because we don't have the funds to pay a housing assistance payment for them for the month of December. We're gonna cover that short shortfall, but in January, they get added to the roles, so to speak, and we're already in an overspending situation. And what we anticipate the fiscal year 'twenty six allocation to be, I think at best, is gonna be level funding. And the question is, will there be any kind of an inflation factor? We don't know. But based on my experience, I would anticipate that 8,099 figure to be maybe 500 to at least 500 families less, maybe more. Is there a way that, in the legislature, that we can support saying there's the need? Like, can prove that there is the need. Is there some sort of definition or something that we can use and state like, this is what we as a legislator, as a state, are willing to do to protect families and make sure that they're housed, is there something that we can do? At 18,000,000.

[Marc Mihaly, Chair, House Committee on General and Housing]: Yeah. Well, it's not not necessarily $18,000,000 but Kathleen has been I'm going to cut this short just because we're going to run out of time. But my understanding simply is you're right, that there's a downward spiral. That every year what happens is HUD decides how much to authorize, it looks at what actually was spent the prior year. The units authorized are what HUD and its mechanics thinks that we deserve. The units that congress and its wisdom elects to finance is less than that. Right. So the the 8,099 is less than the 9,300, not because there's nobody around here who wants the vouchers. It's not because there's no demand. It's because there's no money. The reason there's no money is because congress doesn't appropriate it.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: That's right.

[Marc Mihaly, Chair, House Committee on General and Housing]: Right. So next year, what will happen is they will HUD will look at what's been used and say, oh, you only used 8099. So they won't authorize 9332. They'll authorize less. Correct. And then Congress will go down from that and its funding, which is why every year we're down. So I think the answer is yes, the state can fund the shortfall. It's a question of how we do it, when we do it, and the benefit of funding the shortfall, as I understand it is this correct, Kathleen? Is that to the extent that we fund additional vouchers and we use them, then HUD looks at that when it authorizes what it's not like it ignores vouchers that are state funded.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: That's not entirely correct. There is a strategy, And HUD does not recognize general funds for housing assistance payment voucher renewals. What they do recognize and allow is public housing authorities have, most have an administrative fee reserve account. Now these are earned administrative fees from prior years. Those fees are there to run their businesses, to pay their staff. Public housing authorities can elect to use those funds to support housing assistance payments. Those funds And those funds are eligible for renewal as part of their base Reserve fund. Before the next year.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: The reserve fund.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: So the way that this committee can help and that the general assembly can help is to compel housing authorities to use those administrative fees to support housing assistance payments for calendar year 'twenty seven, and then agree to reimburse

[Marc Mihaly, Chair, House Committee on General and Housing]: those public housing authorities so they're made full. Thank you. Kathleen, I hate to do this, but I'm very sorry, but I don't wanna cut the subsequent witnesses' time. But I do wanna ask, listed here as Elizabeth Bacon also from the SHA. Are you speaking for both of you? I am. Okay, thank you. You're welcome. Mr. Kathleen, thank you so much. And more to follow. And we appreciate your written testimony, and we'll look at it.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: Please reach out with questions. Thank you.

[Marc Mihaly, Chair, House Committee on General and Housing]: Our next witness is Gus Felix from the Vermont Housing Association Board.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Can I just clarify one thing? Kathleen, can I just clarify one thing, which is the $18,000,000 would ensure, at least at the moment, would insure people not being displaced from their homes at the moment?

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: No, the $18,000,000 would be used to invest in the voucher program in calendar year '26. And establish a new baseline for the following year. A higher baseline of eligibility.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Okay. I think we just need to, that needs further understanding. Yeah.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: Okay.

[Marc Mihaly, Chair, House Committee on General and Housing]: Interesting. Welcome, and thank you for coming. Take it away.

[Gus Seelig, Executive Director, Vermont Housing & Conservation Board]: For the record, Gus Seward, director for the Vermont Housing and Conservation Board, with me as our housing director, Jenny Hislop. I'm gonna, in the interest of knowing you're a bit behind schedule, go much faster, happy to come back at a different time, but talk about how housing production is going in Vermont. The losses we're gonna have are gonna be more next year on the production side than this year. Gus, I'm gonna interrupt one moment.

[Marc Mihaly, Chair, House Committee on General and Housing]: There is one chair No, all of our chairs are occupied here. Yeah, there's a chair here at the table. There's one chair here at the table, and also, you're welcome One person is welcome to just join the committee or two and just sit in the committee chair. Yeah. Alex, you want to just sit? You can just sit in the committee chair. We've been wanting to get you there for a long time.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: Maybe he has been announcing this elected and everybody else.

[James Paradisis, Outreach Director for U.S. Senator Bernie Sanders]: Gus, go ahead, please.

[Gus Seelig, Executive Director, Vermont Housing & Conservation Board]: Let me begin my testimony by saying two things. One is that it's not just about housing dollars. It's about the cascading impact on people of modest means, whether it's SNAP benefits, WIC, the availability of legal services, Medicaid, all of that, we're going to have a more distressed population that we're trying to house who have access to less resources. Second thing I just want to say is it was my honor to get a call a few years back from Mary Miller, was who then a member of the VSHA board when they were doing their search. And I think what you have in Kathleen is probably the foremost expert, at least in New England and probably the country, not just expert, but creative expert about how to maximize rental assistance for Vermonters. A few years ago, our biggest problem was that we had certificates and people could not find housing. The supply issue is still front and center, but if we have, and this will become clear in the presentation I give you, if we have many less vouchers, moving people from being around nearly impossible, but for a few circumstances. Just briefly, a little tiny bit of good news. This is a neighborhood in Shelburne that opened this summer, 94 units altogether, including 26 permanently affordable condominiums. The people who got to move in included employees at Lake Robin, chef at Shelburne Farms, a nurse, a teacher, and a state trooper. So we're trying to do the workforce work you want us to do. The role of federal funding speaks to the three legged stool, services are a part of it. One of the things that happened this year was the cut to the AmeriCorps program. We provide AmeriCorps members to many of the organizations that provide services to people who are unhoused. We were able to win that fight and restore that funding. Project based vouchers are supporting people, but they're also supporting financially new development when they are project based, lets people borrow more and use less soft debt permanent subsidies. So it's important to capital as well. There's three kinds of, a number of programs that we use. Alex will speak to the Community Development Block Grant, but we administer the HOME Block Grant, the National Housing Trust Fund, and a lead paint program. I'm gonna skip over that slide. But what has happened over recent years has been, you asked us in statute to make sure one third of the apartments we were building went to people who were unhoused. We exceeded that goal, And across the pandemic, got nineteen hundred people into housing who were not housed. And that had huge impacts in terms of the state budget and general assistance program. To get it more down to a more granular level, the average tenant income that we're seeing for the rental part of our work, people are earning an average income of $19,000 A lot of that are people who are retired or disabled. If you're a disabled person in Vermont getting SSI, you live on $12,000 a year. So for that $19,000 a year person, they can afford $475 a month. The tax credit program doesn't provide rental assistance, it provides capital. It provides that we should house people at 60% of median, therefore the rent would be $11.73 dollars a month. So the way that somebody at $19,000 makes it is either they're using two thirds of their income to pay their rent, or they get a voucher. And what the voucher does is to make up the difference between lets them pay $4.75, and the feds, through Kathleen's programs and the local housing authorities, pay the difference. As Kathleen said, the cost of that program goes up because the more fair market rents go up, the more expensive that program becomes. Because otherwise, why would a landlord take in a voucher if he can get a higher rent from somebody who doesn't need a voucher? Impact on development and homelessness. We have three projects that had commitments for 22 project based vouchers, and that was going to let them borrow $1,300,000 Those vouchers went away as things shrunk. The projects include a total of 92 apartments, where we set aside a pool of funds to deal with things like supply chain interruptions, changes in project costs, appeals, so forth, we're going to fill that gap. But it means less capital to build units because we're filling the gap caused by the loss of rental assistance. So this is not just a problem for tenants, it's also a problem in terms of how much supply can we build. We're gonna build less if there are less tenant based vouchers. So as I said a minute ago, the notion of using funds that were set aside for GA or taking funds from the rainy day fund so that it rains a little bit less here, I think is a really wise thing for you to take

[Marc Mihaly, Chair, House Committee on General and Housing]: a deep look at. I'm just

[Gus Seelig, Executive Director, Vermont Housing & Conservation Board]: gonna say, if somebody's been around the building a long time, you might say, well, let's do this in budget adjustment. I think one of the things that, as I understand it, and Kathleen, correct me if I'm wrong, so take a risk about making a statement. The earlier you do this in the session, provide some support for the proposal she's just made, the bigger the impact will be. Sometimes a budget adjustment bill doesn't pass until March. Some years, you never pass a budget adjustment bill, and it just gets wound into the budget. So I hope you might consider working with the Human Services Committee and think about a standalone bill that can pass very early in the session if this is something that the body thinks, both bodies think has merit because it's gonna help us in the long run, stabilize what we're getting from the feds and stabilize housing for people, and let us get a few more units built. Capital, and the congressional delegation spoke to this some. The HOME program was zeroed out in the House budget. Senator Collins, who chairs the Senate Appropriations Committee, has been a strong supporter of housing. In the past, we're part of something called the New England Housing Network. We've met with her staff many times over the summer and fall. Senate budget will keep the home block grant in place. So we'll see whether if there's a budget or continuing resolution, we should be okay. If there is not, I can't tell you what will happen to the Home Block Grant. But the fact that it was looked upon so poorly on the House side is a big problem. And when you think about how much we spend on housing, just $6,000,000 adds a lot of capacity. The National Housing Trust Fund is not on the federal budget. It is funded from the profits of Fannie Mae and Freddie Mac. The law requires that those organizations stay profitable for certain number of quarters in a row. So should they have a bad quarter, funding will stop. The administration, lots of people wanna take them out of receivership and privatize them. And I just can't speak to what will happen at that point. But I would say that this has been a steady funding source for many years, it may go away. The other thing you need to know, and Alex may speak to this in terms of the community development block grant, is these programs have all state minimums. They had the same all state minimum in 1991 when the home block grant came into law. So our purchasing power from its federal assistance has gone down. Senator Clarkson, I'm gonna disagree with you about one thing, which is we've been here before in the 1980s when the federal government eliminated the Section eight New Construction and Substantial Rehab Program, and that meant an 80% reduction in resources available for housing. So we've faced this before. That was exactly why the legislature created the Housing and Conservation Board. And a piece of my message to you is, at least until Congress and the president take a different view of this, the state is gonna need to step up more again, I think. Did

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: I say we

[Gus Seelig, Executive Director, Vermont Housing & Conservation Board]: You said this was the worst time ever.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: I did. Don't think I said it. In

[Gus Seelig, Executive Director, Vermont Housing & Conservation Board]: terms of the abandonment of the feds, and I'm just saying in terms of housing, they've abandoned us before.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: I've been in the legislature.

[Marc Mihaly, Chair, House Committee on General and Housing]: That's right.

[Gus Seelig, Executive Director, Vermont Housing & Conservation Board]: That's true.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Since I've been here. Since

[Marc Mihaly, Chair, House Committee on General and Housing]: I'm older than you.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: That's not my mind. Let's be the stabboard.

[Marc Mihaly, Chair, House Committee on General and Housing]: Yeah. Okay. Do have to move along here. Okay. You wanna allow unless you're Jenny's seating all her time to you.

[Gus Seelig, Executive Director, Vermont Housing & Conservation Board]: Jenny's just helping me here. She's very important, because otherwise we just would cry. Our congressional delegation has been very effective at getting congressionally directed spending for housing, And that's been really vital, but that only happens in years that there's a budget that passes. It doesn't happen just by way of continuing resolution. The delegation is seeking $12,000,000 directly for BHCB. They're also, it's not up there seeking another $5,000,000 for the mobile home initiative that they funded in 'twenty four, and the shared equity initiative as well. So if there's a budget, there's a good chance that some of those dollars will come. If there's a continuing resolution, not this year, that's why there wasn't any in '25, it's because we passed a CR and not a budget. New policy requirements, I can't speak to how this will impact us, but this is new language in our agreements around the immigration issue. And fundamentally, if a household has somebody of mixed status in it, we're now obligated to check on that, check on whether the status is legal or not. And if they're not here legally, then those federally funded units can't go to that person. So that's gonna be a big change. We don't know what the system is gonna be. The FERC asks of us how much burden will fall on us at the state level, or how much that burden will fall on individual providers to document. And that probably will have an impact. It affects the CDBG program, as I understand it as well. There are 14 rental units, rental developments around the state that are under construction right now. One home ownership development and two mobile home community developments all underway. We were concerned in September that with the shutdown, maybe the checks would stop flowing. So the good news is that the portals at HUD have stayed open. The Fed's so far are continuing to honor those commitments, but they are from prior years. We also, and a shout out to Alex's team, got HUD to sign the grant agreements for HOME and the National Housing Trust Fund for fiscal year twenty six, the current year that we're in right now. So we're in good shape that way, but that could change. And just flash through, this is housing for people with no actual disabilities under construction in Randolph, one of four projects, The long awaited Putney project that had two and a half years and two trips to the Supreme Court is under construction. We broke ground on our third development up at Cambrian Rise. It's going to have 40 more apartments. Just took this wreck of a building in partnership with the Central Vermont Refugee Action Network and rehabilitated it for four new American families that opened this summer. And in the 5th District in St. Albans, thirty three Homes to Elderly opened a few weeks ago, completely occupied. We are 150 of the two seventy units built in the TIFF District there. So thank you for the CHIP program. We hope we can do more of this, but I think speaks to the importance of the partnership, not just to do infrastructure, but the need for public funding that then is also helping generate private investment in those circumstances. So with that, I'm happy to answer any questions you have, but I'll go back to what I said a few moments ago. I think Kathleen's given you a great deal of wisdom here. I prefer to come in here and say, we need one time money for production, and we do, but we can't move the most vulnerable manners out of motels and shelters and the woods without rental assistance for the most part.

[Marc Mihaly, Chair, House Committee on General and Housing]: Committee, questions? Either committee? Gus, thank you very much. Jenny, it's pleasure having you here. Next is Maura. Chad, the child is here.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Oh, is she here by a unit?

[Marc Mihaly, Chair, House Committee on General and Housing]: Hello. Are a little short on time, just letting you know. Good, I am going be very fast. And of course we're focusing on the feds and the impact of what's happening at the federal level.

[Maura Collins, Executive Director, Vermont Housing Finance Agency]: Hi everyone, good to see you all, so many people. I'm Maura Collins, I'm the executive director of the Vermont Housing Finance Agency, and I'm here with some good news. So, there's a lot that's been happening and I appreciate all my colleagues, laying out the status of everything. One thing that passed in HR one was an increase to the federal housing tax credits. Some of you who hear me testify regularly will remember that there are two types of tax credits. And both of the types of tax credits have been affected. So there are 9% tax credits and there are 4% tax credits. And we would need far too much time for me to explain the nuances and differences there. But as you can imagine from the numbers four and nine, nine is about twice as valuable as four. And so Vermont gets in every state, it gets a limited allocated pot of 9% tax credits. And these are very valuable to housing developments in the state. And this is where we see some of our most mission rich community development projects in the state use these very valuable 9% credits. And in HR one, there was a 12% increase to those tax credits. So that's why I say I have good news. That is in effect next calendar year. And so we will be awarding those. And there's not been other changes to what's eligible, what can be done, all that. It's just more money to go around. The bad news is you also remember from previous testimony I've given that every year the cost of housing is increasing and we know that, that has continued. And so a 12% increase has not kept up with inflation and the ever increasing costs. And so I'm often asked how many more projects will this mean we can do? And I will conservatively say maybe one. And so that could mean some more housing for Vermont. But if you take a long enough view backwards and you say, well, what's the change from the past? If I were to look at last year to this year, I would say, well, there's a 12% increase. We'll be able to award that much more, housing. On the other hand, if you were to ask me to look back five years and watch the trend line here, I can tell you that we've had other, it was 12.5%, another 12.5% increases in the past that we had for four years, that then went away, then costs increased. And so now the fact that we're up 12% is good news that we are grateful for. And a lot of that support of why we got that increase was because a bipartisan Congress was really rallied around this program. In HR1, there were a lot of winners and losers. And the Low Income Housing Tax Credit program is often seen as a winner by many people, many parties. Everyone can appreciate the very low incomes that this program can serve and also can appreciate that the structure of the program works really well to bring in private dollars, private equity, when organizations like our state's housing developers can sell those tax credits and investors will invest in them. There's a lot of benefit that happens. So there was another change that happened as well. This one gets really weedy, really quick. And so I will jump to the last page of the book and tell you that this next thing I'm going to explain, I don't think will have a tremendous impact for Vermont. But what happened was affects the 4% tax credit program. The 4% tax credit program is an automatic credit. It's not an allocation from the Feds. It is something that developers have a right to these tax credits if they do certain things. First thing, most importantly, is they have to agree to abide by the program rules, which is to house lower income people and abide by all the tax credit rules. They also have to decide to finance more than half of the property with tax exempt bonds. And these committees have heard me talk about how VHFA awards and allocates tax exempt bonds. So half of a project's development has to use that source to build their building. And if they do that, they can automatically get some of these 4% tax credits. There are many states in the country. Most states in the country are what we call cap constrained. There's not enough of those tax exempt bonds to meet all of the state's needs. Housing is by far nationally the biggest user of these tax exempt bonds, But these can be used for other things like economic development, health care and investment in infrastructure and other worthy uses. And so because more and more states were cap constrained and they needed to use up so much of these tax exempt bonds to pay for half of a housing development in order to trigger these credits to happen, there was a lot of advocacy that we should lower that bar. Maybe not half the project get funded, but they decide only a quarter of the housing has to be funded with these tax exempt bonds in order to trigger the 4% tax credits. So that means a lot of states can spread the tax exempt bond awards around to more developments, more developments will be eligible for 4% tax credits.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: With less money.

[Maura Collins, Executive Director, Vermont Housing Finance Agency]: Not with less money. They just have to, I mean, it's still going to cost $10,000,000 to build a building. It used to be they had to get at least 5,000,000 of it had to be tax exempt financed. Now only 2,500,000 of it has to be tax exempt financed. Now they still have to finance that building. It's not lowering the cost or anything else. But more projects could, be awarded these, tax credits as a result of that lowering of the bar. Vermont, we've talked about, has not been hitting its cap. We have authority left. We, you all have been making major investments in housing so that you could make this 4% tax credit program work more often. And it's been a great resource that we've been able to use more and more. And so I do anticipate that there are housing developments that may not finance half of it with tax exempt bonds and instead use just 25% and find other sources instead. But I don't anticipate that there will be more projects receiving and using 4% tax credits because as of what I'm hearing from developers today, it still is a limited pool of developers who know how to work with tax credits, who are savvy enough to follow these IRS rules, who are interested in jumping through all the hoops of housing folks in the way that the tax credits require. And so I'm not sure that Vermont is going to see a big market change as a result of this. I do think that projects will take advantage of it for the financial reasons that a developer could explain to you why they choose to how, where they get their debt from. That's a project based decision based on the numbers of that deal. But I'm not anticipating a major market shift as a result of that second issue. The first one, do you think we will see more housing be built as a result as long as we can contain costs? And for those of us who go back a few years, we may still be talking about the same number of units, though. We know that with costs increasing, the number of apartments that we could fund in 2020 with a fictitious $10,000,000 is about half as much now because costs have risen so much.

[Marc Mihaly, Chair, House Committee on General and Housing]: Thank you. Quickly, because we're kind of out of time here, the tax credit program, will it continue to function during the shutdown?

[Maura Collins, Executive Director, Vermont Housing Finance Agency]: Absolutely. VHFA does not receive appropriations or anything like that. So our agency has not been directly impacted by the shutdown. I'm very concerned. We are a mortgage lender, those bonds I talked about. We have a lot of mortgages out there on properties. If the section eight program is not funded, they cannot pay their loans to VHFA nor Freddie and Fannie and all the other investors. So So I'm not saying this in a self interested way. I'm just explaining the economics are that it's very concerning to think that there could be any kind of disruption in those rental assistance payments Right. Because we wanna keep those people housed, and those projects need to keep paying their bills or else else their investors get nervous. And we could start to see foundational cracks in a program and a system that for thirty some odd years has been very steady and gotten a lot of support. So it really could undermine the support for this important bedrock program.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Maybe those investors will influence what's happening in Washington.

[Maura Collins, Executive Director, Vermont Housing Finance Agency]: Biggest investor in affordable housing is Fannie Mae and Freddie Mac, which currently is controlled by the federal government. And so it is a virtuous cycle that if the Section eight funding could flow to those properties, the federal government will benefit because their own bills will be paid more.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Correct. And just a quick thing that you talk about enabling smaller developers to navigate and access these four percents through. That is something we could do to help encourage more take up on those and figure out who could help them navigate that more successfully. That clearly is an area for us to improve on. So I would be happy in January or whenever to come

[Maura Collins, Executive Director, Vermont Housing Finance Agency]: and give a testimony about technical assistance programs that we've set up two different ones to call new and emerging developers, some in partnership with the Department of Housing and other pots of money that we've been able to raise as an independent agency that is probably the right avenue and first step and foray into affordable housing development. And it would be down the road that we would probably after we see some experience in a growing portfolio, we'd get more comfortable with awarding them tax credits. It is not a Vermont based decision to make that program so complicated. But I wanna caution that in every state in the country, it would be very unusual for a new and emerging developer to be a tax credit developer without a lot of mentorship and handholding and an evidence of experience in robust housing development before they're going to jump into that deep end of tax credit housing. So we are trying to build the shallow end, the ramp, so that people can grow our confidence in them and their confidence in themselves and their ability to do this. But that's something we could talk about in the session. Yeah,

[Marc Mihaly, Chair, House Committee on General and Housing]: would appreciate that. Thank you very much, Mara.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: Thank you.

[Marc Mihaly, Chair, House Committee on General and Housing]: Alex, you're next. Alex Cho, Commissioner of the Department of Housing and Community Development.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: A new dad. Excellent. Are you

[Marc Mihaly, Chair, House Committee on General and Housing]: not going to join me from Larry joining us? If I could.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: Right.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: All right.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: Like Jenny and Gus.

[Alex Farrell, Commissioner, Vermont Department of Housing and Community Development]: Thank you, Mr. Chair and Madam Chair. Yep, Alex Farrell, Commissioner of the Department of Housing and Community Development joined today by Nate Formalari, Deputy Commissioner of the Department. I can be fairly brief as well because I think the headline today is really the focus on Housing Choice Vouchers and Project Based Vouchers Section program. Also just can't help myself. I also have to heap on some praise for Kathleen Burke. I'm here to be on the board of VSHA and I've seen her up close. She's incredibly knowledgeable about the Section eight program and how to be creative. We have a huge asset in Kathleen. So, you know, just to state that this group of folks coordinates constantly, both formally and informally. You know, the various housing entities, we do keep each other posted. We consider the impacts of various federal actions on each other's programs and on our own programs. So I'll start by talking about VHIP. I think beyond what you heard from Kathleen, there's really no news on on VHIP whereas unit production is gonna continue as it always would. The impacts will be largely on folks coming through the coordinated entry process that rely on those vouchers to get into those units to pay their rent. That's a consideration. At this time we haven't seen any issues with occupancy, but it's something that we're going to have to monitor because it's likely going forward that we could see issues there. Right now, there's nothing to point to or no issue to to look at.

[Marc Mihaly, Chair, House Committee on General and Housing]: But we we have renters. You can use section eight vouchers. Some right? Some do.

[Alex Farrell, Commissioner, Vermont Department of Housing and Community Development]: Some do. Some Mostly it'd be the coordinated entry.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Yeah, not so what it's a lower percent, it's not that big a percent.

[Marc Mihaly, Chair, House Committee on General and Housing]: Terms of how

[Alex Farrell, Commissioner, Vermont Department of Housing and Community Development]: many are coordinated entry tenants?

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: How many use vouchers?

[Alex Farrell, Commissioner, Vermont Department of Housing and Community Development]: I don't know the exact percent, but most who use the coordinated entry, so most of our five year units which is a pretty good percent of the portfolio right now, many of them if not all of them would use these vouchers. Of the rest of the portfolio, some of them but a pretty small percent would use these vouchers, But it's not exclusive. So that's VHIP. I'm going to hand it off to Deputy Commissioner Formalari to talk about Vermont Community Development Program, which is CDBG as well as CDBG Doctor. I'll just make passing mention that all of our programs through the Department of Interior National Park Service or Historic Preservation Programs are uninterrupted. We are able to make draws. I mention that because occasionally those sources do come in to projects and some of the developers would tell you that there are ways that they use those credits and those. Gus touched on something that I do want to reaffirm and just remind this group of, which is that our small state minimum, which is how we get our allocation on CDBG has largely remained unchanged for thirty plus years. So a pot of roughly $8,000,000 which once was substantial and could bring on a lot of units and get a lot of projects gaps closed is now a relatively small pot of funding in the landscape here. So we've had to get very creative. Deputy Commissioner Pormulari and I along with that team have been trying to stay proactive in getting creative How best can we utilize that source of funding to affect the most number of units and the broadest number of projects? Where can we be impactful recognizing that things like BABA Build America Buy America also again diminishes the impact of that funding source. Why don't I pass it off to Nate now?

[Nate Formalarie, Deputy Commissioner, Vermont Department of Housing and Community Development]: Yeah, sure. Think the headline for what I'm going to say today is that we're in good shape in terms of where we're at with HUD and our grant agreements and our ability to draw funds. That's kind of the overarching headline. So on CDBG, on that program, we have our grant agreements in place, as Gus mentioned. And the next board meeting where things would be awarded for housing projects would be in June. So there's a lot of runway until we're going to be tapping those funds. As far as existing projects that have CDBG funding, if they're coming in for allocations, the systems are open and we're able to draw down funds for that. On the CDBG Doctor, as a refresher, that's a $67,000,000 allocation from HUD relating to the twenty twenty three flooding event. We've got $67,000,000 from HUD on that. Dollars 54,000,000 needs to go to Washington and Lemoyle County, dollars 13,000,000 to Orleans, Caledonia, Rockland, Windsor and Windom. I want to heap some praise on our staff. That funding came in right at the administration transition. We didn't know what was going to happen back in January and February, as we all remember. And the team jumped on it. We got our action plan together by spring. We got it approved by mid summer, and we had our grant agreement in place on those funds by August. And we already have our applications in as of September 30, and they're being scored now. So just huge praise to the team. We really had to keep our foot on the gas. We didn't know the shutdown was coming, but we just felt we had to move quickly because we didn't want to risk those funds. So those applications are being scored now. We're hopeful that by the end of the year, calendar year, we'll have some news on where those funds are going to be going. That's the real high level stuff I'm having Who to scores them? What? It's internal. So some of our team members

[Marc Mihaly, Chair, House Committee on General and Housing]: So it's not Washington? No. It's us. No. Yes. So once they're scored, it goes to

[Nate Formalarie, Deputy Commissioner, Vermont Department of Housing and Community Development]: the community development board and the staff gives recommendations on what should be funded. And then the board weighs in and ultimately it will be secretary Kerley and the governor. Right.

[Marc Mihaly, Chair, House Committee on General and Housing]: Okay, so it's all in. Internal.

[Alex Farrell, Commissioner, Vermont Department of Housing and Community Development]: Because our action plan was approved, everything is now on the state.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Okay. And nothing is being that Office of Budget Management is not giving it to us, is their choosing to not do with so much else.

[Nate Formalarie, Deputy Commissioner, Vermont Department of Housing and Community Development]: The funds are in our federal

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: account, which is great.

[Marc Mihaly, Chair, House Committee on General and Housing]: It is my impression and my right that the VIT program relies on the non profit providers to administer it, and they, if there's a Section eight collapse, I mean we'll hear more about this in a few minutes, I assume if there were a real Section eight problem, they would begin to lose staff and they would begin to lose the ability to administer that program.

[Alex Farrell, Commissioner, Vermont Department of Housing and Community Development]: That's right. Yeah. Our five home ownership centers, and what I'll say is I think, you know, a large part there's a lot of crossover between our scattered sites program, which is an aspect of our CDBG that we've chosen to invest more in. There's some good crossover between the work that the staff at the home ownership centers do on that, the scattered sites investments and with VHIP. So those two things support each other, but more broadly, yeah, I mean, the Section eight program helps maintain the income for the portfolios of those entities.

[Marc Mihaly, Chair, House Committee on General and Housing]: Right. Questions? Committee? That is great. Gentlemen, thank you so much. Our last witness I will point out that is not

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: our DHIP ask for the year.

[Alex Farrell, Commissioner, Vermont Department of Housing and Community Development]: No, absolutely not. We'll be back.

[Marc Mihaly, Chair, House Committee on General and Housing]: Actually, wait a minute Alex, don't go. Am I right that there is some large program out there I heard about, federally funded program that has to do with health and has an element of allowing health reconstruction of units for health workers. Oh, right.

[Alex Farrell, Commissioner, Vermont Department of Housing and Community Development]: What you're referring to is Is this real? Well, application has not yet been submitted, but there's sort of two pieces to this. So this is the Rural Health Transformation Program. It's a federal program through USDA. An application will be submitted. This AHS is in the lead, but we are working on the application with them. Details of that I probably can't get in front of the administration on, but just to say we are looking at ways that beyond the initial $100,000,000 that will be coming to the state, there's an opportunity for substantial funding beyond that. We are trying to find a creative way to build into the application funding that could support housing, largely to support workforce growth in the healthcare industry.

[Marc Mihaly, Chair, House Committee on General and Housing]: Healthcare, which

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: would be fabulous.

[Marc Mihaly, Chair, House Committee on General and Housing]: Thank you. Have more to tell.

[Kathleen Burke, Executive Director, Vermont State Housing Authority]: You said USDA? Yes. So

[Alex Farrell, Commissioner, Vermont Department of Housing and Community Development]: I'm happy to chat in more detail at a later date once that application's public.

[Marc Mihaly, Chair, House Committee on General and Housing]: What do you think the timing is on that? Do have any ideas?

[Alex Farrell, Commissioner, Vermont Department of Housing and Community Development]: Well, want to say this month the application's due.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Okay. Who's it due to?

[Miles McGerman, Constituent Services Representative for U.S. Senator Peter Welch]: I believe it's USDA.

[Marc Mihaly, Chair, House Committee on General and Housing]: If there is a USDA to receive this. Okay. Thank you very much. Thanks. Last witness in this group is Kevin Loso, who is the executive director of Rutland Housing Authority. Kevin?

[Kevin Loso, Executive Director, Rutland Housing Authority]: Good morning, and thank you so much for your time. I mean, sorry I couldn't, be with you in person, but, things are a little crazy as you could imagine. Again, I'm Kevin Losa. I'm the executive director of the Rutland Housing Authority, one of seven local housing authorities that administer the section eight program, as well as, what used to be public housing units. We have nearly 2,300 units across the straight across the state. We house primarily, people at or below 30% of area median income. So this is a very deep subsidy program that serves some of Vermont's most at risk individuals and families. Earlier, rental assistance demonstration project was mentioned. Rent the RAD program has been around for about ten years, and indeed, almost all of Vermont's local public housing authorities have converted from the old public housing program to the RAD program. And what that means is that, those nearly 3,000 units are dependent on section eight project based subsidy. So that's an added complexity, that we're dealing with. Certainly, if we're left with the decision of either, filling our units or issuing housing choice vouchers out in the community or project basing additional vouchers, to other organizations, we have an obligation to to keep those, units full. Just to follow-up on what a couple of other folks said, on a local level, we currently project base 38 vouchers, within properties at Cornerstone and in the Hickory Street housing development here in Rutland. In addition, we have 18 vouchers which are, slated to to roll out, both of which would be in Cornerstone, properties. Currently, we do not have the funding to to fulfill that initial contract. With Cornerstone, we are working diligently to make certain that at a minimum, the, the Maple Village project in West Rottland will receive their 10 vouchers in order to make that project cash flow. Finally, I wanna talk about transitional housing, a component of, again, what was discussed earlier. We are unable to transition people out of housing into permanently affordable housing, because we simply don't have the section eight vouchers to do that. We have a property called the Rutland Area Bridge Housing that consists of eight units. We're fortunate to have partnerships with two organizations that, support a total of five of those units. But the, the three units, which primarily come off of, the coordinated entry list, between the fact that there's no medium term rental assistance available, for those units, which puts us in an immediate, concern around sustainability. And then that's aggravated by the fact that we couldn't we could not possibly, convert those units just to, either section eight housing choice voucher or section eight project based vouchers because, again, we don't have the subsidy that would enable us to issue those, new vouchers. I too wanna to thank, Kathleen Burke for the extraordinary job that she did in putting together her testimony. That include, her numbers included the, housing choice voucher programs, housing choice vouchers that are administered on the local level, and I I thank her for representing, the other seven of us. So, again, I want to be mindful of, the time constraints. What I'd like to do is, provide some additional written, testimony. We'll plan to do that after the fact. So I'm happy to try to answer any questions.

[Marc Mihaly, Chair, House Committee on General and Housing]: Kevin, thank you very much. And do please do submit written testimony.

[Kevin Loso, Executive Director, Rutland Housing Authority]: I will. Thank you.

[Marc Mihaly, Chair, House Committee on General and Housing]: Valuable because we are time limited and I appreciate We'll your

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: look forward to seeing you later this month at Maple Street or Maple. The Maple.

[Kevin Loso, Executive Director, Rutland Housing Authority]: Maple Village.

[Senator Alison Clarkson, Senate Economic Development, Housing and General Affairs]: Maple Village.

[Kevin Loso, Executive Director, Rutland Housing Authority]: Likewise. We

[Marc Mihaly, Chair, House Committee on General and Housing]: have a break. I'd like to take a break, and instead of the fifteen minutes on the agenda, I'd like to encourage people to please return by 11:15, maybe let's say 11:17. No, let's give you something else. Okay, and