Vermont Legislature SmartTranscripts:

[Chair Marc Mihaly]: Good afternoon, everyone. It is Wednesday, January 28. January was split by, and you are at the House General and Housing Committee. This morning, we went on a tour of EFFECTO Homes, graciously received by EFFECTO personnel. And we looked at some single wides, single wide with duplex and a double wide, and had a conversation. And now we have representatives of Facto Homes here, and we're also gonna hear from the Vermont League of Cities and Towns as well and have a committee discussion before the floor, which is at 03:30. So, would the effect of home's representatives, come and if you wanna all come at both come at the same time, just open up the chair and

[Dan Fecteau (Fecteau Homes)]: what?

[Rep. Gayle Pezzo (Member)]: No.

[Chair Marc Mihaly]: Okay. So what you should do is just tell us your names for the record, because we're live, and can take it away. Tell us what you think.

[Ashley Bartley (Fecteau Homes)]: Ashley Bartley, I'm the Finance and Marketing Coordinator with Crypto Homes.

[Dan Fecteau (Fecteau Homes)]: Dan Facto, primarily sales in division. That's Jim Facto, right there.

[Chair Marc Mihaly]: Jim, welcome.

[Jim Fecteau (Fecteau Homes)]: Please,

[Chair Marc Mihaly]: what I would suggest is talk to us about your business, the financing, how you do it. We haven't had someone in here who just like you, who is literally on the ground selling and arranging financing for these homes. And I'm sure we're not gonna wait till the end for questions. I'm sure there'll be questions right in the middle of your testimony, I'll just interrupt if I might. I don't intend to be rude, but it's just the way we got to do things.

[Dan Fecteau (Fecteau Homes)]: Yeah, so probably the easiest way to approach it is if someone comes in, we establish wants, needs, and ability. So we figure out what they're looking for, it makes, know, budgetarily if it makes sense, and then we could build you know a series of things anywhere from a used home at Park, a new home, replacing an old house with a newer used home on a piece of property that they have. There's a series of things that we have to go through to figure out where we're going to fall. The biggest thing is trying to figure out what they need and what they can afford.

[Chair Marc Mihaly]: Do you have, I know because we just saw them, you have new homes that have just been built, Yeah. Do you have, or model homes essentially, do you have used homes that you sell? We do. And they're on your lot there.

[Dan Fecteau (Fecteau Homes)]: That's correct, they went across from the mobile station next to Yeah. 370

[Chair Marc Mihaly]: Okay, go ahead. So yeah, as far

[Dan Fecteau (Fecteau Homes)]: as who the next thing is, once we've established, if they're comfortable, then the next thing is really financing and figuring out how do we pay for this. If it's not a cash deal, how do we move forward financially?

[Chair Marc Mihaly]: You know what, before we get into the finances, why don't you tell us a little bit about kind of what the price range is for these kinds of homes? And, I mean, know we saw a range, we saw a double wide, and we saw a very ascended, but give us a sense of what the price is, and then what's involved in getting them planted somewhere.

[Dan Fecteau (Fecteau Homes)]: Yeah, so I did a, I had done this about weeks ago for a tank here, and I did single wides, double wides, mods. Worked through the singles and doubles. What I did is I did the house typical options, I assumed site work, a slab, utility connections. In some cases, I'll give you the price with and without the wells in typical septic and bringing power in. What I came up with was for the single whites, for instance, let's say you a watch that didn't have water, sewer, and power. I'm sorry, okay, so if you figured on the water, sewer, and power with the house, not the land, but let's say you had to have all those things, signal wise would range anywhere from 175 to around 200. So square footage per square foot would be anywhere from 194 to two nineteen. If the water, storm power was on the property, prices would be anywhere from $1.36 to $1.57, with the square footage price being anywhere from $1.55 to $1.70. Double wides, same idea.

[Chair Marc Mihaly]: How much is that of the single wides, just how much of that is the price literally at your shop? The whole The whole thing itself?

[Dan Fecteau (Fecteau Homes)]: Is anywhere from, I mean, will vary of course, but typical anywhere from 101 to 117 of what we normally deal with.

[Chair Marc Mihaly]: Depending on finishes and Yep, factory, exactly. Size.

[Dan Fecteau (Fecteau Homes)]: And some series are more beneficial for per square foot cost or overall cost, just using a typical, and it shouldn't be extremes on either end.

[Chair Marc Mihaly]: And how many factories do you buy from?

[Dan Fecteau (Fecteau Homes)]: For the manufactured, we could get five, technically,

[Chair Marc Mihaly]: but the fifth one is so expensive. And you mentioned before, are all of those located in Pennsylvania?

[Dan Fecteau (Fecteau Homes)]: Pennsylvania, yeah. And then the double wides, for the homes themselves, typical, 135 to 177. I mean, you could get something 150 and 120, you could get well over 200, but the meat of it is that 135 to 177. With water, solar, and power added anywhere from $2.12, let's say, to $2.64, and if it already had water, solar, power anywhere from 172 to 2.86, and square footage pricing ranging anywhere from 125 to 200. So it just depends on what the scenario is, there's quite a few factors, but everything I have here is typically high to energy star and typical options. Again, you could be $15.20, $30 more theoretically, but in that given. So

[Chair Marc Mihaly]: the one we saw, the double wide we saw, just for those who didn't attend with us, we saw a double wide that had walls that were wallboard and pretty high end appliances, I would say. Yep. And you said that was priced around 185.

[Dan Fecteau (Fecteau Homes)]: That particular one's 105.

[Chair Marc Mihaly]: And that's just reflecting those, the high end

[Dan Fecteau (Fecteau Homes)]: appliances The

[Chair Marc Mihaly]: and the

[Dan Fecteau (Fecteau Homes)]: hickory cabinets, the bigger bathroom, sheetrock, and there's several options again. That particular one, if you were to stretch it out to a 76 foot, right now it's 56, you probably could get to 2 and a quarter with it if you were to maintain and add some options, but this is kind of the bulk

[Unidentified Committee Member]: of it.

[Chair Marc Mihaly]: Well, just one more question. By the way, please interrupt. I'm just on a roll up here with questions. Well, part of it is I want a chance to surface on the video and publicly some of what we discussed in the conference room in the morning. But I picked up a number of of of Oh, your brochures. Brochures, and these brochures, like the homestead series, etcetera, these are not double or single wide. These are what look like another form of manufactured home, and I guess is this Jim's deal, but do you sell these as well?

[Dan Fecteau (Fecteau Homes)]: Right, we handle the modulars as well. The modulars are gonna be your state built, local and state building code, whereas your HUD, which is the singles and doubles are going to be a HUD code. So they're federally man made.

[Chair Marc Mihaly]: Are they also though the pizzas of them made in factories in

[Dan Fecteau (Fecteau Homes)]: Yes, different, with a different code, correct.

[Chair Marc Mihaly]: But they're assembled on-site? Yes. They they come as boxes, parts of homes, and they're assembled on sites. Okay. Thank you. I'm sorry to interrupt. Okay. Oh, one more thing. About sort of what do you consider to be your sales per year in terms of number of units?

[Dan Fecteau (Fecteau Homes)]: Oh, I think last year we were eighty

[Ashley Bartley (Fecteau Homes)]: seventy six, I don't how.

[Rep. Elizabeth Burrows (Member)]: Okay, yeah. Because of things

[Ashley Bartley (Fecteau Homes)]: end of year falling, how things panned out, but 76 for calendar year 2025 for both manufactured and modular. Gayle,

[Samantha Sheehan (Vermont League of Cities and Towns)]: since

[Rep. Gayle Pezzo (Member)]: we're asking questions now, how long from the time that you order it from PA, and you have somebody interested in purchasing, so from the time you order it until it gets to the real estate that they're putting it on?

[Dan Fecteau (Fecteau Homes)]: It all set up? Depending on the product, some series, and drywall takes longer, some factory do longer. Best case scenario, the Atlantics are gonna be, from the point when we order it, three to four weeks it's offline, it takes a week or so to get here and another. So that would be seven, eight weeks completion. Some are gonna be three, three and a half months. So it depends on the factory and a series of things, but that'd be the good timeline if they're anywhere.

[Rep. Gayle Pezzo (Member)]: Once it's here, how long does it take till the foundation is cured?

[Dan Fecteau (Fecteau Homes)]: We would do that while the So that would be in that timeline.

[Chair Marc Mihaly]: You do the foundation?

[Dan Fecteau (Fecteau Homes)]: We do foundations, yeah, the slabs and even the other modules as well, we do depending on where it is, but we do offer that service. Yes.

[Chair Marc Mihaly]: Do they when you're so the delay is, like, three and a half months is because the factory itself?

[Dan Fecteau (Fecteau Homes)]: Yeah, on the extreme exactly, pertaining to the factory, like for instance, just as an example, Eagle River got to a point I think this year where the drywall series, which is usually about a month, month and a half longer, was fifteen, sixteen weeks, I think at one point. So what happens, their factories are set up to make money, so the drywall slows them down, so they only incorporate so many drywall homes, so the more drywalls accumulate, the more that gets shot out, and sometimes that'll help out for the VOG, the non drywalls.

[Chair Marc Mihaly]: These factories, do you have any idea how many they make a year?

[Ashley Bartley (Fecteau Homes)]: We don't get access to that information. We can see how many floors are coming into the state for all retailers in the state, but we don't get broken down to how many each retailer is doing. I don't even know that they would tell us if we asked how many they're doing because a lot of them are nationwide. Actually, one of our builders recently partnered with towers, the veteran.

[Dan Fecteau (Fecteau Homes)]: They don't really

[Ashley Bartley (Fecteau Homes)]: share the specifics in terms of how many nationwide only because they serve such a broad area.

[Dan Fecteau (Fecteau Homes)]: We know it varies depending on the factories. Mean, yes, depending the small couple, 300, they could get up to 800 to a thousand, I mean, on some of the busier factories.

[Chair Marc Mihaly]: So these are very big places?

[Dan Fecteau (Fecteau Homes)]: Very large scale, yeah.

[Chair Marc Mihaly]: And do they are they like assembly sites where they're assembling, like, stuff that comes from other places?

[Ashley Bartley (Fecteau Homes)]: Yeah. It's like a production line essentially, so, like, each line has a different part of the whole process, right, so it starts with the frame and then they they put the floor on and build the walls up, and then from there it goes to the fixtures and things like that and the finish work. So it's about as assembly line as you can get with housing.

[Rep. Emilie Krasnow (Ranking Member)]: Can I ask generally what your sales have been like in terms of how many, what the trends have been over the recent years?

[Ashley Bartley (Fecteau Homes)]: Recently we've noticed, I mean, to five, ten years ago, there's definitely specific to the drywall. We are seeing more and more of a demand for drywall manufactured products for single wides and double wides because customers that historically would have been modular customers in terms of the access to financing, placement on their own land, all of the above are kind of skewing more towards a manufactured product like a double wide or a higher end single wide because of the overall cost for the home infrastructure, but also ongoing maintenance costs specific to like the property taxes and insurance costs, which is something everyone across the country is kind of dealing with in housing in terms of how quickly those costs are increasing year over year. We used to see consistently about 25 to 35% of our sales were modular in the last couple of years that dropped down to about 10 to 15%, which is a significant drop. But on the flip side of that, it's not that those sales just aren't coming, it's that they're skewing towards a different type of product than they typically would have because of how much it costs to appear.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Have to a

[Dan Fecteau (Fecteau Homes)]: good start. Just here, no one can

[Ashley Bartley (Fecteau Homes)]: will. This year is looking a little more solid, but I think it's people just realizing pricing is not going to come down, interest rates aren't really going to fluctuate enough to make a difference in terms of that monthly payment. So get into something while you know what things are going to look like in terms of that payment.

[Rep. Elizabeth Burrows (Member)]: Elizabeth? Thanks. When you say it's a drop from 25% to 30%, when was that?

[Ashley Bartley (Fecteau Homes)]: As recent as Well, 2022 is a little bit wonky because the market as a whole kind of took a spike with people coming into the state post COVID. We saw real estate as a whole, just specific to manufactured housing, but you saw a similar trend post COVID that you saw after nineeleven in terms of people making a mass exodus from these more densely populated areas to more rural communities. So 2022, specifically statewide, there was a bump in the real estate market as a whole. Not counting that kind of anomaly, if you will, at the market. These are numbers going back to honestly 2018, 2019, and prior to that. So then again, last five, six years or so is when we really started

[Rep. Emilie Krasnow (Ranking Member)]: to see that shift. Thanks.

[Chair Marc Mihaly]: Yes?

[Rep. Emilie Krasnow (Ranking Member)]: Did you see anything shift with floods? Like, have you seen anything?

[Ashley Bartley (Fecteau Homes)]: Yes, well, yes, so many. So in terms of the financing specifically, anything that is in a flood zone, banks will not touch, or if they do, there's PMI attached to it just makes it a little more inaccessible for people. At the end of the day, the rate and term only matters so much to people. They're really looking at that monthly payment and what can they make work within their comfort range for that monthly payment. So the floods, yes, 100% because on the insurance side of things, this bump up those costs. But the flip side of it is the rezoning of flood areas really eliminated a lot of accessible lots specific in mobile home parks that just banks won't touch where people don't want to put houses on because they're now in a floodplain.

[Chair Marc Mihaly]: Yes, Tom.

[Rep. Thomas "Tom" Charlton (Member)]: I have a question.

[Unidentified Committee Member]: So you have a young family or a couple and they are approaching this with the understanding they're buying a starter home with the intention of building some equity so that ten years down the road or so, they have they can roll over their investment slightly larger. But how well do the manufactured homes versus the modular units that you carry, do they appreciate, depreciate, is it a contingent option? I know there's a wide number of areas. How would you advise them?

[Ashley Bartley (Fecteau Homes)]: It really depends on their overall scenario because everyone's situation is different in terms of the land piece of it. Manufactured phones, single wide and double wide, industry standard is they depreciate in value once cited in line with the market. So right now, of the benefits of our market values being frankly inflated in our state, not just here, but nationwide again, is market values are up right now. So that's kind of helping offset some of that natural depreciation that's affiliated with manufactured home placement. Modular flow industry kind of typical, modulars typically appreciate in value in line with the market. Manufactured homes depreciate in value in line with the market.

[Samantha Sheehan (Vermont League of Cities and Towns)]: So

[Ashley Bartley (Fecteau Homes)]: again, market values being up right now, manufactured home values are up accordingly. So

[Chair Marc Mihaly]: manufactured homes, aka single wides, double wides, etcetera, they depreciate.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Yes, yeah.

[Chair Marc Mihaly]: But modulars sort of appreciate along with the market.

[Ashley Bartley (Fecteau Homes)]: And that's because of the building code, because the manufactured homes are built to the HUD code, modular homes are built, like Dan said, to the state and local zoning. So Colchester's local zoning in terms of roof loads, NOAA, that kind of thing is different than Berry's local zoning. So a modular home conforms to the BOCA code, which is site specific to where it's located. So if you have a stick built home on a lot next door, a modular home, those theoretically are going to be built to the same code. There's not a lot of regulation around it built.

[Rep. Gayle Pezzo (Member)]: Yeah, there's not a lot of regulation, period. Right, no there is with many Yes, of

[Chair Marc Mihaly]: but I mean HUD, but that's HUD, but state is building code. Right. Right. Yes. Speaking

[Rep. Saudia LaMont (Member)]: of the code and regulation, I just want like, how long does, is there like you talk about materials and alternatives to housing structures. What is the typical lifespan? Like how is there do are the materials used? I mean, I know you use dry you said people are transitioning to drywall now. And so like what is the lifespan of a manufactured home?

[Ashley Bartley (Fecteau Homes)]: I mean, in theory, like thirty years at least. A lot of it comes down to maintenance and upkeep, honestly. We have seen We take trades for

[Dan Fecteau (Fecteau Homes)]: forty, fifty years old and are

[Ashley Bartley (Fecteau Homes)]: still fine. In impeccable shape because they've been well maintained. They've had one or two owners and they're like, we've taken in trades from the early 2000s that are junk because they were not well maintained. They were not taken care of. People didn't shovel roofs, that kind of thing. A lot of the life of a home just part of that gray area in terms of access to financing and term, is it's hard to put a finite number on that because a lot of it comes down to care and maintenance and there's not a standard kind of financing industry.

[Dan Fecteau (Fecteau Homes)]: You take care of it, replace the windows that is needed.

[Jim Fecteau (Fecteau Homes)]: Can I just say something?

[Dan Fecteau (Fecteau Homes)]: Yeah. Can you hear me?

[Chair Marc Mihaly]: Jim, why don't you just identify yourself for the record?

[Jim Fecteau (Fecteau Homes)]: Jim facto. I I'm sorry to be joining you here. I'm on vacation. So no.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Need the future. I don't you?

[Rep. Gayle Pezzo (Member)]: So your brother's doing double work.

[Dan Fecteau (Fecteau Homes)]: That's right.

[Jim Fecteau (Fecteau Homes)]: Yeah. Exactly. They're they're doing they're doing fine. I I think I should probably just keep driving. We

[Chair Marc Mihaly]: don't know. We don't wanna know where you are.

[Jim Fecteau (Fecteau Homes)]: That's good because

[Dan Fecteau (Fecteau Homes)]: I don't know.

[Jim Fecteau (Fecteau Homes)]: In terms of the appreciation and all that stuff, I think it's important to say that if the roof is good for twenty or thirty years on a manufactured home, it can be replaced. The windows can be replaced, know, to the same extent that a house that was built sixty years ago can be improved. So it's not like they're just throwaways after after twenty years.

[Rep. Saudia LaMont (Member)]: Thank you. And similar, would and really, I was trying to compare that to that the the construction of the modulars and stick built. I'm just trying to think of materials. Because we talk when we talk about housing and the big picture, talking about developing, building materials, costs, construction, labor, all the different things, not outside of manufactured homes. So I'm just trying to compare and see what that picture looks like when we talk about manufactured homes. What does the life of that look like?

[Jim Fecteau (Fecteau Homes)]: Yeah. I mean, the shingles, the the sheathing on the roof, the shingles, the wall studs are two by six, which is standard construction for stick built. Vinyl siding is standard construction for stick built. And then you move inside the fixtures, the flooring. If you add drywall, toilet sinks, I mean, it's all it's all stuff that you would find in a builder grade new construction.

[Rep. Saudia LaMont (Member)]: Thank you.

[Chair Marc Mihaly]: Go ahead. We interrupted you a lot, but please proceed.

[Rep. Gayle Pezzo (Member)]: Probably still well. Got to

[Chair Marc Mihaly]: the point where somebody had come in to buy the house, and they picked one and ordered it. Yeah.

[Ashley Bartley (Fecteau Homes)]: We help kind of align because financing, especially new construction, regardless of the type of home. Taking on a mortgage loan can be daunting, especially with the real estate market as is new construction is a whole another level. So part of why we offer the resources and support through the process that we do is to try and streamline it and make it as we stressful as possible as we can for the home buyer because realistically new construction is never not stressful. So if we can minimize that, so part of my role specifically is helping to facilitate on the financing side of things. So we sit down and run numbers, do debt to income analysis, that kind of thing to determine based on your needs for financing, what lender that we know will finance this type of product will work best for your needs. In the last, again, five, six, seven years, the access to local lending specific to mobile homes or manufactured homes and parks has become a lot harder to obtain. They used to have a dozen banks, both locally and nationally, that would finance on manufactured homes, specifically in mobile home parks, whether it was a registered mobile home park or privately leased land. And now we have two local lenders that have accessible rates and terms. So there are other lenders who will finance them, but the interest rate is double digits sometimes, which again, just does not make it accessible and affordable for people for that monthly payment. So in terms of accessible affordable financing for the average customer that we're seeing specific to manufactured homes, there's really only a couple locally that we can work with that makes sense for the consumer in terms of that monthly payment. We can certainly direct people towards higher interest rate programs, but at the end of the day, it's not just about selling houses, it's about getting people into homes that they can not just sustain in, but thrive in both physically and financially.

[Jim Fecteau (Fecteau Homes)]: I think it's important to note that Champlain housing has been a big, I mean, a huge help in terms of getting a down payment because mobile homes, typically the banks will require 20% down. That yeah. I think they have to come up with the $2,500 or something and the Champlain housing gets them the equity. And I think we looked at the numbers from last year and we would have lost a million to a million and a half worth of sales that wouldn't have happened without the Champlain housing buyer subsidy there or buyer grant. I think that's something that needs to continue if you all have any influence on that.

[Dan Fecteau (Fecteau Homes)]: Here we go.

[Ashley Bartley (Fecteau Homes)]: Yeah, absolutely. That's the Champlain Housing down payment assistance program, which I don't know if everyone's familiar with, but it's really kind of integral for a lot of people being able to access new or new work, well, new housing, right? So replacing existing homes or completely new construction.

[Rep. Gayle Pezzo (Member)]: Yes. So I think we need to take that into consideration really strongly. Because when I spoke to them and I gave a hypothetical situation, if there was a new development with 30 new homes, would you be able to provide that down payment? And he said, we don't have

[Chair Marc Mihaly]: the money This for is CHT. Yes, yep. So, do you take us through the steps? Let's say you find somebody, what do you guys issue? Do you guys issue a bill of sale? Do you issue a warranty deed? What do you issue?

[Ashley Bartley (Fecteau Homes)]: So historically, this year, and a little bit of last year has been a little bit different specific to one lender, which I'm sure you're all familiar with. Prior to that though, is a bill of sale in terms of that transfer of ownership, which is part of why the manufactured homes are classified as personal property versus real property. It's a bill of sale for the transaction transfer of ownership. Eastrise, who I think is a big proponent of this reclassification of manufactured homes from personal property to real property, is the only lender so far that does a warranty deed and that's so that they can access more financing options on the secondary market to be able to extend more loans in house for them in terms of manufactured housing specific. Everyone else is still bill of sales. So it's really, what we file is really dictated by the lender involved and what they want to see filed. If it's Eastrise and they're requesting a TV file, we file a deed. If it's Fremont Credit Union is another big one, that's a mobile home bill of sale that's being filed. New Hampshire, just as an example, which I'm sure this has come up in these conversations, everything over there is real property. So everything that's being filed on that side of the river is a warranty deed. At the end of the day, in terms of our side of things, it does not matter what we're filing to transfer ownership.

[Samantha Sheehan (Vermont League of Cities and Towns)]: And frankly, if it makes

[Ashley Bartley (Fecteau Homes)]: it a little more accessible and palatable for people on that financing side, whether it's a deed or a bill of sale, it does not fundamentally matter on our side of

[Chair Marc Mihaly]: You'll issue the deed, a warranty deed, whatever you

[Ashley Bartley (Fecteau Homes)]: want, or

[Chair Marc Mihaly]: a bill of sale, because you don't have problems with the warranty deed because you you owned it. Do you buy the thing from the factory, or are you just an intermediate? Who owns it when you sell it?

[Samantha Sheehan (Vermont League of Cities and Towns)]: We do technically.

[Chair Marc Mihaly]: Yeah, you do technically, okay. Yes.

[Rep. Gayle Pezzo (Member)]: Also I want to mention with New Hampshire, they're trying to get licensed in Vermont to be able to lend with New Hampshire Funding Institute, think it's called. Yeah, the one we talked to, yeah. Kathy Paradox, but she's retiring, but she said that it's in the works.

[Rep. Saudia LaMont (Member)]: Yeah, I just want to talk about someone coming in. Who are you seeing? Have you spoken about the demographic yet? Who we're seeing? Who are the homeowners? What does this landscape look like right now, as you all are helping support gate

[Dan Fecteau (Fecteau Homes)]: We home deal anywhere from first entry level buyers, someone who's just starting, people that are downsizing, people that are stepping up. Mean the only people that we do not deal with would be a market where people are looking for something that's well out of what we offer. Comes in with 12 different angles on the roof, I mean we disagree and that's not what we do. But I mean, we deal with a of a lot of different people, as long as it fits within our, it's not that avoiding the answer, you know what I'm saying is we deal with anywhere from A to Z, except for the ones that are at the high end stuff is just not our-

[Ashley Bartley (Fecteau Homes)]: Whatever they want. You meet

[Rep. Gayle Pezzo (Member)]: them where they are.

[Dan Fecteau (Fecteau Homes)]: That's it. I love that. It doesn't fit into what we do and it's, we stay in our lane. I

[Ashley Bartley (Fecteau Homes)]: will say in terms of demographics and how they change as the real estate trends have kind of shifted in the state again in the last five, six, seven years or so, we used to see a lot more of the first time home buyers accessing this with the intent to get a single wide manufactured home and upgrade down the road with a modular stick built wherever the case We may do not see nearly as much as we used to in that case. What we're seeing a lot of for first time home buyers is people that have family that have access to land to subdivide and give to them. And that's really the only time we're seeing first time home buyers now coming through that door. Most are older. Most are older. Definitely our demographic in terms of our average customer, if you will, is skewing older, but look at the demographics of our state, that's kind of in line with the aging population that is Vermont as a whole. So we definitely use the full gambit in terms of if they're of age to take on a mortgage and financially sound to take on a mortgage, literally from an 18 year old up to in their 90s before we sold someone. It doesn't matter where they come from, how old they are, if they can afford to make it work and it makes sense for them at the end of the day, we're not gonna tell them no. But in terms of the general shift in that demographic and who's actually purchasing and able to purchase homes, because it's not a matter of lack of want in the market, it's a matter of being able to access the market and the financing available. When you do that, is there any insight into the type of work fields that folks have or is it all over? It's a wide gamut. It's a wide gamut, honestly. I don't know that we skew more professional or blue collar or anything. We have from plumbers, electricians, entry level people starting out to doctors with private practices. So it's again, that kind of full gambit in terms of occupation. The

[Jim Fecteau (Fecteau Homes)]: other thing is in terms of the first time home buyer, if we looked at our, we keep the list of available property to build on in the area and there just are no building lots available. If somebody is a new home buyer, they don't own land, they don't have access to land through family or whatever. There just isn't any property to build a new house.

[Ashley Bartley (Fecteau Homes)]: And the lots that are available, it's not like there's non existent lots out there. The lots that are available on the market either cost so much that again, it prices people out or the infrastructure piece in terms of bringing utilities onto that property prices people out of what they can realistically more comfortably afford.

[Dan Fecteau (Fecteau Homes)]: So

[Chair Marc Mihaly]: you issue, Gayle and Jennifer, go ahead

[Rep. Emilie Krasnow (Ranking Member)]: questions too.

[Rep. Gayle Pezzo (Member)]: So you're saying that you're seeing the wide gamut, have you seen, as far as people that are downsizing and retired that want to go into a smaller module mobile home, are you seeing more of that for new because from my experience with the three in Colchester, we're seeing downsizing retired or young families with one or two children. And almost nothing

[Ashley Bartley (Fecteau Homes)]: in In the beginning, it's that crux of the missing middle, which we use that in a a lot of different ways. That's exactly on point is it's younger families just trying to figure out how to keep a foothold in the state that they've grown up in or that they wanna raise their children in, but they can't because the housing market is so crazy expensive to access. Or older people who are selling an existing home that's two story that they raise their family in and now they don't want to have to maintain it. They don't want to deal with the plus to take overhead of the home itself. And they're downsizing into something, specifically the white Westbury specifically, they want to go into something like that, that feels more private, but it's not all of the It's upkeep. Yes. Yeah. That comes with, you know, private land ownership.

[Dan Fecteau (Fecteau Homes)]: Great question, Joe.

[Rep. Joseph Parsons (Member)]: I was just curious if there's any

[Unidentified Committee Member]: raise it.

[Rep. Joseph Parsons (Member)]: Is there anything

[Rep. Thomas "Tom" Charlton (Member)]: that kind

[Rep. Joseph Parsons (Member)]: of jumps out at you as far as when it's time to cite places and somebody says, well, I'm gonna put it here? Is there anything that jumps out of you whether it's and I don't need to call out municipalities structures or which park it is. Is there anything that they're doing where you're like, oh, we gotta deal with this park or we gotta deal with that town. We gotta is there anything that in that realm that's happening where you think like, oh, this could be a challenge?

[Samantha Sheehan (Vermont League of Cities and Towns)]: I don't think

[Chair Marc Mihaly]: for

[Ashley Bartley (Fecteau Homes)]: me, I mean, they'll develop, but also we kind of dealing with the headaches and the nuances of local zoning and state zoning kind of comes to the territory and the hats that we wear. So

[Dan Fecteau (Fecteau Homes)]: Yeah, sometimes I'm more or even more. I mean, far as I'm just thinking

[Rep. Joseph Parsons (Member)]: of little things. Working in the trades, there's certain things you show up to a job site and you just go, well, this is going to

[Chair Marc Mihaly]: be a great job. That should be fun.

[Ashley Bartley (Fecteau Homes)]: So usually if we've done our job right, we've sussed out those headaches, but we're getting there.

[Dan Fecteau (Fecteau Homes)]: Sometimes we don't take the job.

[Ashley Bartley (Fecteau Homes)]: And some of them are

[Rep. Emilie Krasnow (Ranking Member)]: How to avoid a hit.

[Chair Marc Mihaly]: Some of them are simple,

[Dan Fecteau (Fecteau Homes)]: just the little tiny thing. It's not gonna stop you from doing a thing, you're just like, do

[Unidentified Committee Member]: they put people through this? Why do they

[Samantha Sheehan (Vermont League of Cities and Towns)]: And that's a hard, not

[Ashley Bartley (Fecteau Homes)]: a hard question, but it's a broad question, right? Each town is different, and each town has different requirements specific to mobile home parks. I think it's the local municipalities interpretation of broader zoning, I think is really kind of what becomes most confusing and a bigger frustration than some of the other aspects of this. Again, on the consumer side of things, the amount of times that we talk to local zoning, to knock anyone, like there are wonderful people in town offices across the state, but like anywhere else, sometimes people are better suited for other jobs And that's vague. I'm trying to be diplomatic. So interpretation in terms of that graying lane switch, where it's open to interpretation instead of just a direct statute or legislation or something that's implemented. Leaving that may shall wording in zoning specifically is, I think would eliminate some of the gray areas that often leads town zoning who's been in his seat for twenty years vacating because of retirement and someone new coming in, and that new person is interpreting those zoning regulations in a different way than has been for the last Yes. Few

[Dan Fecteau (Fecteau Homes)]: Okay, thanks.

[Chair Marc Mihaly]: Is there, so in financing, you're just responsive to the bank, do people, is this, you charge us, do you charge a sales tax regardless of whether you're issuing a warranty deed?

[Ashley Bartley (Fecteau Homes)]: We have to, whether it's a warranty or a vulnerable bill of sale, and that's on manufactured and modular.

[Chair Marc Mihaly]: Is is that wrapped into the price of the house or a separate list?

[Ashley Bartley (Fecteau Homes)]: We include it, but that's our protocol and how we do business essentially. I do know other retailers in the industry line item it, but it's just easier. You get into breaking down of further taxes, people get a little confused in the total number, especially when you're talking sales tax and talking about property. So we've just found it easier to just build it into the cost of the home and it's one less line item that we're

[Dan Fecteau (Fecteau Homes)]: It's not negotiable. Yeah. That's awful.

[Chair Marc Mihaly]: So the sales tax is considerable on a home.

[Ashley Bartley (Fecteau Homes)]: Yeah. I mean, a few thousand at least on a single wife. Yeah.

[Dan Fecteau (Fecteau Homes)]: Typically, they they work at that 6060% or 60%. Yeah. It it works out to three three three and change. So, yeah, it could be be quite a bit.

[Chair Marc Mihaly]: And that's not wrapped into the financing?

[Ashley Bartley (Fecteau Homes)]: It is, because it's built into the loan, that's another part of the reason, or into the house cost, that's another part of the reason we built it into the house cost, because it's

[Samantha Sheehan (Vermont League of Cities and Towns)]: more We

[Ashley Bartley (Fecteau Homes)]: have a Yeah.

[Chair Marc Mihaly]: Are there anything, is there anything else before we move on to our next witness that you should tell us?

[Rep. Emilie Krasnow (Ranking Member)]: Can

[Dan Fecteau (Fecteau Homes)]: I ask?

[Chair Marc Mihaly]: Yes, please, any last questions?

[Rep. Emilie Krasnow (Ranking Member)]: Did you get a chance to look at the language in the bill, is there anything in there that you wanted to point out, and if not yet, that's fine.

[Dan Fecteau (Fecteau Homes)]: Not yet, our attorney looked at it, the one that handles our company's transactions, he's going to look back through it, he seemed his initial thoughts were pretty much just it cleared up language. That was his initial thought, which I think was obviously that's kind

[Rep. Gayle Pezzo (Member)]: of the

[Dan Fecteau (Fecteau Homes)]: opportunity be done. But we've also sent it out to Laura Gorski to take a look and then look, Brian's gonna revisit it. If anything else comes up, I certainly forward it.

[Ashley Bartley (Fecteau Homes)]: Yeah, I think on our end from the retailer standpoint or from also kind consumer realizing that we're not consumers in this regard, I think it just makes sense having that reclassified as real property versus personal property because it's just making, it's allowing more avenues for financing to be accessible on a larger market, not just for the homeowner, but for the lending institutions that are going to be loaning to the homeowners. If they can sell these products on a secondary market and not have to charge an 11% interest rate on a twenty year note to justify carrying that as an in house portfolio loan, it just makes it more accessible as a whole to people trying to obtain mortgages for manufactured houses.

[Rep. Emilie Krasnow (Ranking Member)]: Have one last question just on that, on the financing. Do you see, If we get pushed back from the banks who say, no, no, we can't possibly. Do you see any possibility of a compromise of homes built after x or homes built to x specifications or you know, if you buy some kind of homeowners insurance or you buy, you know, like is yes.

[Dan Fecteau (Fecteau Homes)]: Yeah, as long as it's not, As long as you don't create another industry app, you know what I mean? Because sometimes you could say, hey, wanna do a checklist of the next thing that creates another expense of 1,000, 1,500, dollars 2,000. Not And saying maliciously, but the guy looking at it sees a paycheck and getting a bunch of work out of it. You don't wanna create a snowball in that respect, but if it meets certain criteria, I mean, could see a compromise there. I think that would make sense. As to that- I'm just curious. Yeah, you just can't create another.

[Ashley Bartley (Fecteau Homes)]: And I'd be hesitant to, I mean, I'm not saying you should have do things a certain way, but in terms of like a finite date, in terms of like, this is when this is being implemented and moving forward, that then eliminates that option and access for financing to people who are already in mobile homes or looking to purchase Exactly, pre owned mobile yeah. Because again, a lot of the times, especially specific to mobile home parks, a lot of these homeowners are not new homeowners. They're replacing existing homes. And a lot of times they don't want to get into cost of new, a 30 note. So that pre owned market is a lot of times, again, now just because of the cost of everything, a little bit more affordable for people, but more restrictive on the financing side. So I think if you're putting a date as far as moving forward, you're then leaving this whole like, years and years and years of homeowners who no longer can potentially buy in because their homes are classified as personal property and not real property.

[Rep. Emilie Krasnow (Ranking Member)]: Great. Thank you.

[Chair Marc Mihaly]: How about insurance?

[Ashley Bartley (Fecteau Homes)]: I hate insurance.

[Samantha Sheehan (Vermont League of Cities and Towns)]: That's actually

[Ashley Bartley (Fecteau Homes)]: one of the misconception of deeds. Deed insurance? That's really based on the lender and what they want to see. That's not anything that we, I mean, if people do get out of PMI, great, because it just saves them money in the long run, but sometimes there are jobs that you have to have the PMI attached to in order for it to make it saleable for the bank.

[Dan Fecteau (Fecteau Homes)]: So, it gets them into it with 10%,

[Chair Marc Mihaly]: that's That's usually a requirement. That's anyway a requirement of it, even with stick build, if you're going to go to 10%. Now, how about homeowners insurance? Is there a similar problem of a faucity of insurers?

[Ashley Bartley (Fecteau Homes)]: There's definitely we get a lot of calls from people not even looking for housing, but looking to see who we refer for insurers because they are looking either their current insurer is dropping them because of the age of the home or XYZ reason, specifically on the manufactured side of things. We typically refer to, there's a couple of different insurance companies locally, State Farm, Noel Johnson. We really don't have any issue on that side, but it's because again, we have access to the resources and we know this is a company that can insure this home, it isn't going to be a headache or uphill battle for you to get that insurance. Do

[Rep. Gayle Pezzo (Member)]: you think there's that watering tree because it's new homes? Because my experience, we've sold 100 homes, counting the new ones, not even counting the new ones you put in there. And finding homeowners insurance, it's not that it's too much money. It's finding someone that will provide the homeowners insurance. Foremost is probably the one,

[Ashley Bartley (Fecteau Homes)]: the main one. And circling back to the flood question earlier, we see a lot of insurers pulled out of insuring manufactured homes and parks throughout the state because a lot of them were in floodplains. So they kind of went belly up, not belly up, but upside down in that regard because of the things that were coming through. But we, again, knew definitely is harder on the existing and pre owned side for insurance for sure.

[Rep. Emilie Krasnow (Ranking Member)]: Great. Last question, I swear.

[Ashley Bartley (Fecteau Homes)]: No swearing. Do you happen

[Rep. Emilie Krasnow (Ranking Member)]: to know? No swearing, no cursing, no oathing. I was just wondering if you do a lot of sales for ag warfarers? More in recent years.

[Dan Fecteau (Fecteau Homes)]: Yeah, we did three Three last year. Yeah, and mostly up in Sheldon Franklin. Yeah, we've been working with some programs for CHT. They were doing the zero energy ready houses with the, and we're doing the electric furnaces, and they're doing that, having to coordinate the solar with it. It's been a pretty cool process. We did three of them last year. Well, we're going into this year too. So yeah, we've been fortunate.

[Ashley Bartley (Fecteau Homes)]: So that's not really something we used to see up until recently.

[Dan Fecteau (Fecteau Homes)]: Well used to be used homes because they get them and you know they get something that you know they overhead keep their overhead lower not only. And now they're really gearing towards you know they're doing the drywall throughout the they're building them so they're, if they get abused a bit, it's still going take them easy to refurbish.

[Chair Marc Mihaly]: Well, thank you so much for coming and taking time away from your business.

[Dan Fecteau (Fecteau Homes)]: Appreciate it. And

[Chair Marc Mihaly]: look forward to any comments you have on the legislation.

[Dan Fecteau (Fecteau Homes)]: Thank you.

[Chair Marc Mihaly]: Our next next witness next week. Your

[Rep. Gayle Pezzo (Member)]: vacation. Thank you.

[Ashley Bartley (Fecteau Homes)]: Thank you. You.

[Chair Marc Mihaly]: Jim, thank you. Enjoy your vacation. Our our next witness is Dan Riddlehuber, who's president of Tri Park. Dan, welcome to the committee. You wanna just say your name for the record and then tell us about what you wanna tell us about Tri Park.

[Dan Riddlehuber (Tri-Park Development Consultant)]: Absolutely, I will start by saying I'll correct the record and say I am not the president of Tri Park, I am Tri Park's development consultant. I have been working on Tri Park's behalf since 2021 on the funding and implementation of numerous grant funded infrastructure projects. I understand that you received testimony from their attorney, Sandy Schreiber, yesterday afternoon. And I see you know, have worked closely with him on all of these projects and sort of see many of those expert points to him. I understand that I'm here to share the experiences I had navigating their corporate structure in the context of applying for receiving and using grants and the tax consequences therein.

[Chair Marc Mihaly]: Yeah. The issue one of the issues that we're facing well, two things. One is yesterday, we heard testimony just for you. We heard testimony on how expensive infrastructure replacement is and how expensive it is per house compared to spreading it over a whole community, because towns don't pay for the infrastructure. And the other thing we heard was that there's a provision in our bill that essentially requires that homes be classified manufactured homes be classified that look excuse me. LHCs be classified as nonprofits in order to in part, in order to facilitate grants. And so we were curious whether that was true, that it would help. And so you're the person that we look to.

[Dan Riddlehuber (Tri-Park Development Consultant)]: Okay. Good, I'm glad that's your question because that's sort of what I've prepared my notes for here. I've got them here on my other screen and I'll get into them. But a little bit of background on what I understand about how LEC's file taxes because this is the grant situation is not what are they eligible for. I think the state has a lot of leeway in determining what state grants, what what types of entities are gonna be eligible for. I think you guys are on and on that. The the back the the larger challenge is that regardless of what we in the state of Vermont and how we categorize different corporate types, the IRS sees things a certain way. And limited equity cooperatives in the eyes of the IRS are for profit entities. And the way that they file their taxes is generally utilizing IRS Form eleven twenty H, which is as a homeowners association. That's a great way for them to file taxes in years in which they do not receive grants. There are two critical tests. There are several critical tests, but there are two relevant tests that enable a mobile home cooperative to file their taxes this way. One is an income test that says that greater than 60% of their gross income needs to come directly from members. And the other is an expense test. So 90% of their expenses have to be in the service of constructing improvements owned there and by the association. The challenge with grants is that receiving grants of almost any size and certainly of the scale needed to construct infrastructure improvements basically pushes any scale of mobile home park that exists in Vermont out of compliance with that test. And by having met those two tests, the income and expense test, the the net operating income of the entire cooperative is no longer subject to taxes. So the the co op gets to skip its taxes, and it it defaults to the individual homeowners. The co op doesn't pay taxes. But if you fail those income and expense tests, you're no longer eligible to file your taxes that way, and you file your taxes as if you're a in any other corporate entity type.

[Chair Marc Mihaly]: Pay corporate taxes.

[Dan Riddlehuber (Tri-Park Development Consultant)]: And pay corporate taxes. So I pulled just a couple of numbers for scale for reference for you all. If you go to the ACCD registry and you see the average size median size of a mobile home park in Vermont, I'd bet the coops are a little bigger. I don't have that. But it's about 30 units. And the median lot rent for 2024 was about $415 Annualized, that puts their rent from members at about a $150,000, if I've done my math right. And so they would fail their income test at the level of a $100,000 grant. So if they receive a $100,000 grant, they're now at that, they've now failed their 60% or greater income test and can no longer file taxes that way.

[Dan Fecteau (Fecteau Homes)]: And

[Chair Marc Mihaly]: would have to pay

[Dan Riddlehuber (Tri-Park Development Consultant)]: Income tax on all of their net operating income, grants and others.

[Unidentified Committee Member]: So let's say they've crossed over that threshold because of a grant, they're now in corporate tax territory, how much of that grant is taxable and can the cost of the construction be written off against that income?

[Dan Riddlehuber (Tri-Park Development Consultant)]: Much of it can. You run into the issue of timing, was what Tri Park weighed as a risk as it developed its project. It was, you know, when would we receive the the grant sources of revenue, and when would we book the expenses that capital, you know, depreciable expenses? And so much of that income could be offset. In Tri Park's case, there's roughly $350,000 delta between their income and their eligible expenses for that tax form. Now that doesn't include, you know, reserves. It doesn't include various other expenses they're setting aside funds for in those expenses. So they would sort of have been forced to skinny their budget otherwise. There are some exemptions to including federal or including in grant income for the purposes of corporate income tax calculations, and it's called the general welfare exclusion. And as an example of this, SNAP benefits, lead paint programs, asbestos remediation, you can think about things like that. And the reason that those are generally excluded is because they are beneficiary payments to the ultimate beneficiary of that source of funds. Whereas when the money goes to a corporate entity, it's often treated very differently because it's not being received by the actual beneficiary in.

[Chair Marc Mihaly]: So does this mean that it does not, for purposes of at least federal income taxes, This problem cannot be addressed at a state by state legislation.

[Dan Riddlehuber (Tri-Park Development Consultant)]: For for the I don't believe so for the purposes of federal income tax.

[Chair Marc Mihaly]: How about for purposes of state taxes? Taxes? Does the state have the same test? Does the state Is current law the same for the state?

[Dan Riddlehuber (Tri-Park Development Consultant)]: Not as well educated in that area, but yes, Tri Park does pay state income tax. And so I would imagine that if there was a similar expense and income test that they would would be able to meet that as well and and, you know, not have a state income tax as well.

[Chair Marc Mihaly]: Unless, of course, they have grants that kick him out of that plans. But we don't know what the state provision is.

[Dan Riddlehuber (Tri-Park Development Consultant)]: I will give you one example that you could read read on. The Agency of Natural Resources had a ARPA source grant program, not a grant program, called the Healthy Homes Mobile Home Communities Program. And they received comments on this same area. They were funding water and wastewater infrastructure projects among other things. And they came to appreciate that giving these funds as grants would trigger taxes for these receiving entities. And so they reviewed the situation, and I wouldn't say they gave tax advice, but they published a memo in April 2023 wherein they redefined the program from a grant agreement to a beneficiary payments program. And they carried that under the auspices of the general welfare exclusion as quote necessary to shelter in place during the pandemic. I'm not sure how repeatable that would be, but the general welfare exclusion. You know, if we can find ways to write grant programs for things like water, wastewater, storm water improvements, you know, anything that we can with a straight face, you know, convince the IRS is a social welfare benefit program. I think cooperatives could stand to exclude those expense those income dollars from their expense tests, income and expense tests.

[Chair Marc Mihaly]: Again, I mean, short of rewriting state law, state income tax law, which we couldn't do, of course, this just whatever it is stands and subject to whatever maneuvering you can do. Got it. Are there questions? Do you have more to tell us, Dan?

[Dan Riddlehuber (Tri-Park Development Consultant)]: That's my big goal for you. Ultimately, Tri Park ended up partnering with two other nonprofits, a c three and a c six, and they reassigned six different grants that they won and worked with the project's attorneys to establish a somewhat cumbersome project structure wherein the grants were assigned to the nonprofits who then constructed the improvements and assigned the completed or assigning the completed improvements to the co op who's leasing them, it's a bit of a mess, but the dollars went to the nonprofits.

[Chair Marc Mihaly]: Thank you, yes.

[Rep. Gayle Pezzo (Member)]: Dan, do you feel that the money saved from not having to the tax on the grants and all the cumbersome problem, oops, that you had to jump. Do you think it was worth it as far as dollars?

[Dan Riddlehuber (Tri-Park Development Consultant)]: Oh, absolutely. Yes. Tri Park was looking at an almost 7 figure tax liability.

[Rep. Gayle Pezzo (Member)]: It's not an unusual thing that's done either in the cooperatives. It's not funded. It's not. Yeah. You find a way like they did so that you won't have to pay those

[Chair Marc Mihaly]: astronomical tax figures. Right, thank you very much. Any last questions of Dan? Dan, thank you so much for taking time away from your day and talking to us.

[Dan Riddlehuber (Tri-Park Development Consultant)]: You're very welcome. Good luck with your legislation.

[Rep. Elizabeth Burrows (Member)]: Thanks. Thank you. I heard I misheard him

[Chair Marc Mihaly]: say Alright. Our next witness Good luck, is dear. Going to be Samantha Sheehan, who's the University Policy and Advocates Specialist at BLCT.

[Rep. Elizabeth Burrows (Member)]: Was going to say, Committee.

[Chair Marc Mihaly]: New to the Committee.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Oh, after? Okay, great.

[Chair Marc Mihaly]: You don't want to come sit next to her, do you?

[Rep. Elizabeth Burrows (Member)]: Well, it's quite up there. It's crowded.

[Rep. Emilie Krasnow (Ranking Member)]: He only

[Chair Marc Mihaly]: wants to be in the

[Samantha Sheehan (Vermont League of Cities and Towns)]: country.

[Chair Marc Mihaly]: Betty? Yes.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Okay. For the record, I'm Samantha Sheehan, the municipal policy and advocacy specialist for the Vermont League of Cities and Towns. We're happy to talk today about H-seven 57. We may have greater input to share on sections one and two, have a lot of time with the material, and would like to share the bill with the listers, VALA, Vermont Association of Listers and Assessors, and hear if they have any particular ideas, comments, concerns. I don't have any right now. So I'm going to jump right into discussing section three, which pertains to municipal land use regulation through zoning and allowing anywhere where year round residential development is legal and local zoning to also allow the use of these housing types that you're discussing today and in this bill, which are mobile manufactured and prefabricated. So this will be hopefully super quick. So first, we'd like to say that many communities of Vermont, many towns, towns in Vermont already have a substantial amount of their local housing inventory are these types of homes now. Vermonters live in these types of homes. So statewide, know from the BHFA needs assessment, 7% of units of housing that are owned by the occupant. So 7% of all owned homes are mobile homes. 4% of all rented homes statewide are mobile homes. So these are already a really important way that Vermonters are finding affordable and available places to live. Please remember that in many cases, as I really liked hearing from the Can you say the name of that company? Back up. Thank you. Talking about a sort of shift in market towards people interested in using these housing types to subdivide owned land and establish multi generation or multifamily living. And that happens a lot in rural communities. Manufactured housing types represent a type of rural infill housing that we see a lot for landed manufactured and mobile homes, as opposed to the homes that happen in co ops and parks. So that said, find VLCT generally does not ask for preemptions to local zoning in the legislation that you work on in the building, but we find this one to be consistent with how many communities are making changes to their local regulations already in order to enable more housing development and to improve access to available and affordable housing. I said maybe two weeks ago, and I'll remind you again, we also would like an expedited path to adoption so that if local zoning requires amendment as a result of this change to state law, that the legislative body of the town can make that change, comply with the change in state law without having to go through a full zoning amendment adoption process, which takes months, a lot of volunteer time, and distracts from the town and the town officials' capacity to tackle other exciting types of housing policy that they may be working on or may have grants to work on.

[Chair Marc Mihaly]: Do you know I remember last year in our bill, we started with that. Do you remember where it fell out? I don't

[Samantha Sheehan (Vermont League of Cities and Towns)]: I'm pretty sure it was Senate Natural Resources. Or rather, Senate Natural Resources did not take Yeah. It was in there, and then they didn't take custody of the bill, but they raised concerns. I don't know who testified against it. We don't know. It was wild. Don't know. Someone testified at some point against that provision and it came out in the Senate and it didn't come back. So we're asking, we've supported them, we've supported them. Please.

[Chair Marc Mihaly]: So that language, did it provide that they

[Samantha Sheehan (Vermont League of Cities and Towns)]: could adopt the change without a public hearing.

[Chair Marc Mihaly]: So

[Samantha Sheehan (Vermont League of Cities and Towns)]: it would have to have a public select board meeting. So there would be a warrant action, there would be discussion in public by the legislative body, so they select for the city council, and then they could adopt the change. But right now, to amend your zoning, you have to have two public hearings. They have fifteen day notices. If you make any changes, you have to have another public hearing. So, four to twelve weeks to adopt a amendment.

[Chair Marc Mihaly]: We would have to provide that changes made to conform to this section could be made without a public hearing, yeah. That language was for any to confirm I know. Any Right. I'm not sure how far we went astray from the mobile phone, but I get it.

[Dan Fecteau (Fecteau Homes)]: Okay.

[Chair Marc Mihaly]: Is there any questions on this issue? Sorry, I have I have one more. Just on this.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Oh, just on the hearing Okay.

[Chair Marc Mihaly]: Any? Okay, go ahead. Okay. Lastly,

[Samantha Sheehan (Vermont League of Cities and Towns)]: if you'll enter TV, I would like to remind you that over 100 Vermont municipalities, many who have substantial inventory of these housing types that Vermonters live in and who may benefit from more of this housing type being used do not have municipal zoning. This change will not have an impact in those communities because the regulation and effect there is Act two fifty. So in communities wishing to see more mobile home parks, more co ops and manufactured living communities, and to see more Vermonters able to bring manufactured housing types onto the properties that they own and have already invested septic and wastewater and dragways and gardens in. In order to see a proliferation of this type of housing type used as rural infill, Act two fifty would also have to receive this direction to the district commissions, commissions, especially in new parks where you're putting up 10 or more units or where they're being built more than 800 feet away from the road, which after July 1, they will be triggered by the Brook Fool.

[Rep. Elizabeth Burrows (Member)]: That's helpful.

[Chair Marc Mihaly]: Would the 2,000 feet apply to go to parks?

[Samantha Sheehan (Vermont League of Cities and Towns)]: Yeah, because it would be impervious driveway or road. Josh is going to talk about impervious next when I'm done, but

[Rep. Elizabeth Burrows (Member)]: yeah,

[Samantha Sheehan (Vermont League of Cities and Towns)]: it definitely could. There's a lot of driveway and a park that could equal 2,000 feet.

[Dan Fecteau (Fecteau Homes)]: Right.

[Rep. Emilie Krasnow (Ranking Member)]: Any questions? Yes. So this is that whole debate of can you count them as individual properties even though they're in a

[Samantha Sheehan (Vermont League of Cities and Towns)]: They are counted because it's a unit.

[Rep. Emilie Krasnow (Ranking Member)]: Right. But what you're saying is the so you're saying the impervious surface.

[Samantha Sheehan (Vermont League of Cities and Towns)]: The road rule Yeah. So there's a trigger that has always been in place that the five five ten. So if you're building more than so if you're building 10 or more of these housing types, you would trigger Act two fifty under how it's been for a long time. Now, the road rule from Act 181 takes effect in July, although we're asking for a suspension till the year after. That is 800 feet from a road, any development, 800 feet from an existing road or it's called a transportation facility, so public or private road, or 2,000 feet of new road and driveway together. So it could be a thousand feet of road and a thousand feet of driveway. It could be 10 driveways. It could be one really long driveway. It could be a switchbacks driveway, but it's the linear feet of, so it's 800 off of a road or 2,000 new broken driveway.

[Chair Marc Mihaly]: Okay, any questions? So, I I'll tell you, you have been so clear that no one is asking questions. I

[Samantha Sheehan (Vermont League of Cities and Towns)]: think manufacturer sponsored fun. Hancock's 16% manufacturing. I thought, yeah, I'm curious, I'd like to sometimes, maybe someone knows, oh you guys probably. Who is the, like, where's the highest,

[Rep. Elizabeth Burrows (Member)]: can't speak.

[Rep. Thomas "Tom" Charlton (Member)]: St. George.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Oh. Oh yeah, have a friend that lives on there.

[Ashley Bartley (Fecteau Homes)]: It's what?

[Samantha Sheehan (Vermont League of Cities and Towns)]: St. George. St. George.

[Rep. Gayle Pezzo (Member)]: Yeah, didn't know St.

[Rep. Emilie Krasnow (Ranking Member)]: George. Memorable. Most Most manufactured.

[Rep. Thomas "Tom" Charlton (Member)]: Yeah. I didn't let her finish, but I knew what she was asking.

[Samantha Sheehan (Vermont League of Cities and Towns)]: You made my mind.

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: Josh? For the director, Josh Stanford, director of inter government relations at Vermont League of Cities and Towns. Before I jump to Section four on three acre, I just wanted to emphasize one thing Samantha said about the zoning preemptions and making it easier to implement them. I serve on my town's planning commission and we've been in for two years. We all know that the Home Act and the Act from last year was all in place, but our regulations are not up to date. We've had quorum issues, select board that have kept, everyone knows you have to comply with these rules, but it's literally taken two years to get them. That's what sometimes leads to this confusion you've heard about where a zoning administrator is told in state statute to follow your town's zoning laws. The state says there are new zoning laws, but in order to change those in your town, you have to go through a very lengthy process that requires notices, objections, quorum and sometimes that doesn't align with the goal. So that's the importance of this.

[Chair Marc Mihaly]: I just do have a question about that. I'm not including charter cities in this question. Have you ever had a situation where the legislature has simply said it's the law and it's deemed to be part of every town's zoning code, and the town doesn't have to do anything?

[Samantha Sheehan (Vermont League of Cities and Towns)]: Well, is what happens. Sorry, I'll So, come if local zoning is non compliant, If the zoning bylaw or ordinance, so those are the documents, right, if those that have been adopted by the legislative body are non conforming with state requirements? What is in effect? So one of the Home Act preemptions is everywhere you allow a single family home, you have to allow a duplex. Even in Randolph, they haven't gotten the opportunity to hold that hearing and to adopt that change.

[Unidentified Committee Member]: But it

[Chair Marc Mihaly]: is law.

[Samantha Sheehan (Vermont League of Cities and Towns)]: But law. And it so if you go to the zoning administrator and apply for a duplex conversion, adaptive reuse permit, you'll get it. Also, known sort of fun fact, once the town warns it, it is in effect. The town upgrades out

[Chair Marc Mihaly]: Is only what state mandated, or is that that's just general? Yeah,

[Samantha Sheehan (Vermont League of Cities and Towns)]: it's just generally because builders and property owners need to know what's happening while they're waiting for their DRV hearing or they've submitted their application. So then that causes sometimes confusion. But yeah, that's just like a little fun fact about these. So we have these statutorily required processes where they're quite long and many communities like Randolph don't have a zoning, they don't have a planning director. So they're also applying for municipal planning grants. So they're competing against their neighboring towns to be awarded the grant. Then they're awarded the grant. Then they're waiting for their RPC planner planner to have the time to come to their meeting. And so we're literally holding up the trains from leaving the station, trying to get money from the state to adopt the zoning change that the state has required to be adopted and has already been law.

[Chair Marc Mihaly]: Let rephrase my question then. Would it make sense instead of allowing the select board to adopt the zone change without a hearing to simply say that anytime they repub it's the law, and anytime they republish the code, it's done without any action. Why do you need action at all by the local select board?

[Samantha Sheehan (Vermont League of Cities and Towns)]: It should be done. There's no prob select boards meet twice a week at least, and they take many actions which are worn

[Chair Marc Mihaly]: You meet every every other week, yes.

[Rep. Gayle Pezzo (Member)]: Twice a month.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Twice a month. Yeah.

[Chair Marc Mihaly]: My wife is on it, so I Yeah,

[Ashley Bartley (Fecteau Homes)]: I know. So,

[Samantha Sheehan (Vermont League of Cities and Towns)]: allowing it to be done by an action of the municipal legislative body is expeditious.

[Chair Marc Mihaly]: Yeah.

[Samantha Sheehan (Vermont League of Cities and Towns)]: And it provides, like, still protects the public process. It helps people learn, hear, ask questions, speak in a positive or negative way about the change. It's warned in the paper, it's on the radio, all the things, right? So it's good. We like public process, just maybe not having to wait for a grant when we could be using that grant for flood hazard bylaw modernization I or

[Rep. Elizabeth Burrows (Member)]: would counter with the possibility that local planning commissions or zoning commissions don't necessarily pay attention to what the state law updates are or federal law updates are. And I can give an example of an individual who asked me to put forward a bill this year because his local zoning planning RPC no, not RPC. VRB. Design Review Board? Design Review Board turned down his plan to add an accessibility ramp onto his house so that his wife could get inside his house. Even though that is required by the ADA. Yeah. He had to take his ERV to court And so even though it is federal

[Chair Marc Mihaly]: law we can do about that.

[Rep. Elizabeth Burrows (Member)]: No. No. No. No. No. I am just saying Yeah. That maybe that is in place.

[Chair Marc Mihaly]: Yeah. And it's good it's good to do what you're saying is It's good to

[Rep. Elizabeth Burrows (Member)]: It's good. Require the town to adopt the same thing. Right. Like Okay. Multiple Yeah. Multiple Either way, there's is not a bad thing.

[Chair Marc Mihaly]: Got it. I I understand. Thank you. Josh, go ahead.

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: Three acre section four, we're supportive of that. We think there's many neighborhoods around the state that are being impacted by the three acre rule. It's a good start to add mobile home communities to some exemption or process that makes more sense. There's at least two bills that are trying to tackle the three acre impacts on housing this year. Know the Senate three zero three is a good example of maybe where we can have a more universal application of this same idea. Is there a House bill? That's a Senate bill. There

[Dan Riddlehuber (Tri-Park Development Consultant)]: is a house bill. I've got

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: to find the number. I need to review how extensive it is. Six thirty two?

[Rep. Elizabeth Burrows (Member)]: Gale's on.

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: 632. We have definitely heard lot of concern from municipalities with the same issue because unlike a mobile home park where you have one common owner, the mobile home park owner, whether it's a for profit, nonprofit or cooperative, there's one person that Department of Environmental Conservation to say, you must implement this, you must have a permit for this. In other situations, there isn't a common owner. Their individual homes on one, two, three, four acres, and the way they've calculated the impervious surface because of each of their separate driveways and roofs, all of the 34 or 50 homes, whatever it is add up to more than three acres. So they're saying you need to implement this stormwater, but there's no one person to do it. So they're trying to ask the municipalities to take over that responsibility. Of course, the municipalities have great concerns about that, have liability concerns. Whose front yard are they taking over to implement the three acre? What liability of maintaining that and disputes with the different property owners? We don't believe it's a acceptable way to achieve this common goal, which is reduce phosphorus and clean up the lake when the three acre is the most expensive per ton of phosphorus way to clean up the lake and has shown very little improvement to date and isn't measured by anyone. Whether these improvements are actually reducing the phosphorus, this is all built on a model. And with the increased cost of housing this could add per homeowner, it really is concerning and it's clouded title on some of these properties. So that's the bigger picture here that if these individual homeowners don't install a licensed engineered stormwater fix for rain coming off their roof, they could have a cloudy title. And so that's raising a lot of concerns within municipalities. So we support any effort to try to tackle this problem. Do you have it? Oh, go ahead.

[Rep. Elizabeth Burrows (Member)]: Can you reframe that statement and not have it be addressing phosphorus, but instead be addressing flood zones? Do you not think that impervious cover, whether it's ground cover or otherwise, has an impact on the designated flood zones?

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: Oh, I believe it does. And we believe that possibly you can achieve greater benefit and fix flooding scenarios that are affecting homeowners, municipalities. If you actually put this effort towards the places we know are flooding and eroding and washing away. Some of the examples I've seen in some of these communities, Richmond has been in the headlines. It's a very forested property where a watershed engineers have toured it and they're seeing no evidence of flooding or erosion. Yet maybe the state is asking those homeowners to invest millions of dollars when just down the road, right next to the Inusky River, there is actual flooding and erosion and washing away of a town road that the town would love those resources put towards that effort to sort of actually reduce the flood impacts and direct erosion as an example. I don't know if I answered your question.

[Rep. Elizabeth Burrows (Member)]: No. Actually, let me rephrase. Can you tell our committee more about the impacts of impervious ground cover, impervious cover in general, on the FEMA flood zone designations of, for example, twenty year floods, one hundred year floods, and therefore, subsequently, the impact on the cost of insurance?

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: I I don't think I can address that because these three acre sites that I'm aware of, none of them ran a flood zone. They're, like, far removed from any flood or flood plain area, in fact. Clearly runoff, unchecked runoff off of impervious surfaces add speed and velocity to the drainage, which could add to floodwaters in the river. And part of these solutions are meant to slow those down. But this, three acre rule is not an attempt to sort of remove that water or to repair a flood plain or a flood impacted zone or a so I'm not sure I I can answer that question. If you've got I'm sure there's engineers from DC that can give you a model of x feet of impervious surface adds x to flooding, but that's not me that could answer that.

[Chair Marc Mihaly]: Do you have any plans to testify in favor of S three zero three or eight six thirty two?

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: We hope so. We certainly tried to engage on the three acre reform last session, we did successfully. And there is a study committee that is looking into it at the direction, I think that came out of Senate Natural Resources. There's a working group. There's a couple of municipal folks on that. Most of that committee is to direct possibly a creation of stormwater utilities and regional stormwater utilities as the entity that could take on these three acre permits, I still think it doesn't address the fundamental question, which three zero three is trying to do. And I believe six ninety is trying to do that these three acre remedies taken in whole with current estimates is over a billion dollars and yet will result in 0% cleanup of phosphorus in the lake. And so if there's the top 10% of these sites that are creating a lot of phosphorus and could Funds could be directed to those to actually see improvements. Let let's prioritize and put money towards the projects that actually will reduce the most phosphorus, I think is the goal. And find out if it is from a mobile home park, if it is from that forested neighborhood in Richmond, but that work hasn't been done. It feels like people share the goal of cleaning up the lake, but don't wanna throw money that they don't have at not solving the problem. And so it's asking DC to open up that permit and do some more research and let's put our efforts to the sites that have the most contamination in the lake, because we don't have the sort of resources and, might not be able to have a sort of scattered approach and and need to have a little bit more focus, think is would be our ask. Do you know

[Chair Marc Mihaly]: whether ANR has taken a position on either 03/2003 or 08/06/1932?

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: I have not heard yet. Whether they are, we have chatted with folks in the past, Maynard, and they understand is a challenge. They extended the deadline to meet these three already. They already missed the date. There's been very few projects constructed despite lots of ARPA money. I know the mobile home communities was offered some ARPA money to try to address this. Schools were offered some money to try to address this. There's lots of municipal sites on this list, low income housing projects on this list. There's potential real impact and cost on these sites. I think the ask is evaluate and let's prioritize on fixing the ones that contribute the most phosphorus to the lake. And let's be real about that because a billion dollars scattered across 700 individual properties, which are thousands of acres, and in some cases because you're in a neighborhood of 50 homes all on one to five acres, their only impervious contribution is their roof. And they might be on a forested five acre property. Or the driveway. Or the driveway. When engineer looks at it, they're not seeing any evidence of erosion. The water filters off into the forested property around it when there are real problems down the road, watch outs from repeated floods, erosion that's clearly visible to everyone, and maybe we should be focusing on those areas with some measurement first.

[Chair Marc Mihaly]: So what I'm hearing in some is that your testimony, both of you differ are supportive of the bill Yes. That we are asking ourselves whether if three zero three and six thirty two are real, whether it's really worth our having this section, which would be subsumed by those bills, but we haven't made any decisions about that. One of the problems that we face generally in this committee is that the reason housing is important is because it impacts so many aspects of life. So guess what? It is relevant to many committees. Yes. And we just don't want a pathway that has got so many committees that it will never make it out

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: of here before crossover. We recognize that challenge. I think that's, as Samantha brought up, that real concern from us that when you're dealing with housing issues, we could talk about local land use. The local land use is not the whole story for housing constraints, there's state land use, and that is a different committee, a different process, that we can't separate ourselves from that though.

[Dan Fecteau (Fecteau Homes)]: No, and

[Chair Marc Mihaly]: I don't think you should.

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: We're just one piece with the municipal land use and in almost half the towns, there is no municipal land use, it's the states. Great,

[Chair Marc Mihaly]: do you want to add, go ahead.

[Rep. Gayle Pezzo (Member)]: And just to be a little bit more granular, what this bill, because this is a very emotional issue, is specific to the manufactured homes, Yes. LEDs. It doesn't say that, But it will. But it will.

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: Yes, yes.

[Rep. Gayle Pezzo (Member)]: And so that really narrows it down because it's not affordable, dollars 125,000 for an impact fee or 45,000 for a much smaller park that they have to come up within one year.

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: I completely agree.

[Rep. Gayle Pezzo (Member)]: And we're not adding to the lake.

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: We know that the clean water money, we had a huge bump and it's all gone now. So this cost is increasing, the permit isn't being reformed. Where is it gonna come from? If I may, I would comment just on the concern you heard earlier about the grants, just as a point of information you might want to look into as former role being involved in housing and funding of all types. That problem, not the exact one, but it's similar exists in low income housing tax credit financing deals. And the HCV, you might wanna ask them others, they structure a lot of their grants is deferred loans to not have that tax consequence. And so if there's flexibility among the grantors, think that should be asked, why not pursue that same solution? Well, and also while you're here, I cannot resist asking you another question.

[Chair Marc Mihaly]: You might want to sit down.

[Samantha Sheehan (Vermont League of Cities and Towns)]: See. Maybe I don't know. We can

[Dan Fecteau (Fecteau Homes)]: come up with that.

[Chair Marc Mihaly]: As you may have heard, I don't know what you heard, but we heard a good bit of testimony on the problem that for a lot of these parks, regardless of their organizational type, their infrastructure is aging, and they need to upgrade their infrastructure. And the problem is that the cost of upgrades can be north of $50,000 per unit, partly because it's spread out over so few units, and that this problem is caused, not caused, that the solution is made more difficult in part because towns don't want to either pay for the infrastructure improvements, I'm not talking about the infrastructure from the street to the home. I'm talking about the infrastructure in the street, inside the mobile home park, inside the manufactured home community. They either, towns don't want anything to do with it, don't want to take it on, of course, as municipal matter, or even, although this wasn't the case at Tri Park in Brattleboro, or even after the grant and after it's approved, they don't want to accept it. And it struck us, just from a fairness point of view, that although it's understandable why communities that don't have a lot of resources don't want to do this, it would seem to us a little problematic that the mobile home, the manufactured home community pays the same taxes as everybody else, but it's not getting the benefit. And I'm wondering whether or not some sort of adjustment some sort of adjustment whereby mobile home communities had an option which supports attention of either helping or receiving less taxes would make sense.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Sorry, can say the last part again? You're wondering, would it make sense for mobile

[Chair Marc Mihaly]: Well, we assume that I'm assuming, I'll speak for myself. I am assuming that there's no sense in our talking about legislation which would require municipalities to take on the cost of in street infrastructure work, like for mobile home parks inside mobile inside manufactured home communities just like they do on all their other streets.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Like on land or inside a transportation facility, Roto Dragwood, Culbert, that is by the co op or the park owner.

[Chair Marc Mihaly]: Right. I assume that we're not asking that, but what about saying, well, if you don't wanna do that to a municipality, then you receive proportionately less taxes because you are not providing the services to those homeowners that you provide to other homeowners.

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: Two two comments about that. One, the services that municipalities provide to other homeowners such as those water sewer connections, there's user fees that then presumably the park is collecting as part of their lot rent. The other is this is not just to parks. Wait. There's also water and piracy.

[Chair Marc Mihaly]: Wait. Have to help Let's me out say we have a street. Okay? It runs along the it's in the community. Okay, and then it gets to the point where it's at the gates of manufactured home community and continues. Then it's time to dig up the sewer and replace it with a new sewer, or dig up the sewer waterline and replace it with a new waterline. Are you saying that is when that's done, does the municipality charge the adjacent homeowners who are not in a mobile home community, but do they charge them a user fee, or do they just have to absorb that as part of

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: I mean, that's just very specific, so there's lots of different ways, there's sure there's fire districts, water districts, homeowners association, condo associations that all operate the same way. This isn't- Or

[Samantha Sheehan (Vermont League of Cities and Towns)]: actually don't all operate the same way, operate a variety of ways and through different relationships with the municipality. Same with student housing, colleges, hospitals, military installations. So results may vary, both in the goal of the private property owner, which may be a co op, and in the goals of the municipality and their own long term investment strategy for the infrastructure in question. So it's really hard to say, we cannot answer a specific hypothetical because it depends who owns the property, who owns the piece of infrastructure, what is the current governing relationship between the public entity, if it's a water resources department, a fire district, a private utility provider, what is the legal and ownership of the entity in question that is sharing this resource for sewer, water, potable water management, How have they paid and paid for the upkeep of that infrastructure over time in the past, etcetera? So all of these situations will be really different and will be governed by different processes and authorities. And the revenue setting authority of the municipality will be different depending on what that situation is. Like, can the municipality, if it's a neighborhood, which is an HOA, the municipality may create an assessment district. If it is a mobile home park owned by a corporation where many people live in different housing units, then the municipality may not because there's one brand list spam and one corporate owner to be assessed, right? So that revenue setting authority tool is not available in that situation. Same thing with a student housing type or housing authority type situation. If there's one housing authority that owns all the land and all the infrastructure, you're not setting up a special assessment district to pay for upgrades there in the way you could in a 90 unit residential neighborhood development that has all joined together in an HOA for that purpose. I've just got into quite a rabbit hole with that. What I wanted to say was

[Chair Marc Mihaly]: Actually, no, it's just very instructive.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Yeah, but what I wanted to say was the municipality or may want to acquire infrastructure that was built for a private purpose and create public infrastructure from that. It happens all the time. It's happened in Vermont for hundreds of years. In many ways, that's how societies are built. Like a farmer builds a bridge across a river so they can farm there, and then they build a road farther up the hill so they can farm up there, and then their family and their farm workers built houses, and then you fast forward fifty or one hundred years, and those pieces of infrastructure are now public and those houses are lived in by different people, and that's a new part of town. And so that may happen in these types of situations where you have a homeowners association developer or you have a single mobile home park owner that builds this sort of subterranean infrastructure and then over time that ownership and subdivision changes and the municipality wants to acquire that and turn it into public infrastructure. One thing that gets in the way there's two things that commonly get in the way of that.

[Chair Marc Mihaly]: Of which?

[Samantha Sheehan (Vermont League of Cities and Towns)]: Of sort of taking public infrastructure that's going on to

[Chair Marc Mihaly]: Private land.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Private land, whether that's owned by a co op, owned by an HOA, or owned by a person or thing. And that's municipal liability. We don't have a monetary cap for municipal liability. And so if you're the legislative body of the town, you're the three person select board in Colchester, and you have a mobile home or manufactured home community there asking you to do this, to take over the sewer line that runs under 50 people's houses, that's creating a significant liability to everyone who is a taxpayer in the town because there's no monetary cap. So if one of those people that lives in one of those units causes a catastrophic failure of that sewer line, all the taxpayers in the town are sort of on the hook for that. So that creates, there's things that we want town government to do, there's things that town governments want to do, and then there's things that they can do. And sometimes those three things don't line up. So there are many situations for years and years of history, from hundreds of towns across the state, where a municipal government has acquired private infrastructure and turned it into public infrastructure, and that has worked really well for everyone. Sometimes the ownership, the financing, and oftentimes the liability create a problem to do that, even if it's sort of in the desire of the town.

[Chair Marc Mihaly]: Well, one thing that's clear to me from, thank you very much for that substantial answer.

[Samantha Sheehan (Vermont League of Cities and Towns)]: We've talked about it many times on Meenal Cellular, really, I'm surprised, not yet here.

[Chair Marc Mihaly]: One of the things that's clear to me is that if we were to tackle this issue, you would be involved.

[Dan Fecteau (Fecteau Homes)]: I hope so.

[Chair Marc Mihaly]: Maybe even on a study committee, but it is true from our perspective, now I'm speaking for myself. From our perspective, mobile home, excuse me, manufactured homeowners in a manufactured home community are citizens of a town. Yes. They vote in the town.

[Samantha Sheehan (Vermont League of Cities and Towns)]: And if the state

[Chair Marc Mihaly]: And they pay taxes in the town. And right now, we have a problem with aging infrastructure across a lot of these communities, which simply can't be tackled unless the cost is spread in a way that it isn't spread now, and we have to find, and if there's a lot of history and a lot of complexity, maybe it's time to cut through the history and complexity and come up with some sort of solution.

[Samantha Sheehan (Vermont League of Cities and Towns)]: If I could just say one thing, So if a mobile home or manufactured home community relies on a community scale septic, so an underground system that is not part of a super resource and then that system fails, legality of that, I mean, that would be awful and expensive and difficult to fix, that would be a problem for a lot of people. The relationship from the local government, the municipality and corporate, to that failed system is the same as if there's a single homeowner with a single owned property with a single family septic. The ability of the town to come on, the same types of complications exist if the town were to go onto private property and replace a private septic tank for one family has four, or three.

[Chair Marc Mihaly]: Right, so that's an area where in fact we treat them equally. Right. In other words, what she's saying is, septic, when it comes there is no difference between a mobile and manufactured home and a single family residence. In either case, if their septic system fails, it's their own problem, not

[Rep. Emilie Krasnow (Ranking Member)]: the town's They're not on town water. Well,

[Chair Marc Mihaly]: but if it's I think what I would say is I would love to get to that kind of uniformity with respect to sewer water.

[Samantha Sheehan (Vermont League of Cities and Towns)]: But again, this is like if you think, if you pull into Gifford or UVMMC or even some of the sort of outpatient, like there are very large institutions that own a lot of space and a lot of public infrastructure is there. And so hopefully that infrastructure was built and paid for and the access of the town officials on to the property to maintain it. Hopefully there's really strong governing contracts and financing and relationships. Hopefully there's a voluntary fee schedule where that has been the hospital or the college or UVM has been providing funds to all of the community for the upkeep of that infrastructure over a long time. In some cases, problem was foresawed. The college or the hospital and the municipality saw, well, someday this line is going to fail, and we need to know whose job it is to fix it. And we need to know who owns the line. And we need to know how we're going to pay for fixing this line when there's a freeze and it blows up and there's water squirting out of the ground. And that was managed then. When you're trying to unravel those strings, that legal relationship isn't intact already, it can be

[Chair Marc Mihaly]: Actually, I think the difference, drawing a line, there is a huge range of arrangements all the way from an apartment building, right? I mean, require towns to deal with the sewer line inside the apartment building, and then there's the university that's got a bunch of different buildings with people, and there's commercial buildings like a hospital, etcetera. Drawing the line between those and something that in every single way looks just like a residential neighborhood, except it's got a different legal form, I think we could draw that line. The question, that would not be the hardest thing about this.

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: I think what's what's interesting from our perspective is there's been a lot of authority granted for fire districts, water districts, cooperatives to create a subset of what a municipality does. They are their own municipality for this particular purpose, because we didn't like that the municipality wouldn't do this or they would do this. And so this body granted the authority for new municipalities to form, to solve their problems, water, sewer, infrastructure, whatever it was, fiber, wastewater districts. Now, they're their own municipality. Now, their municipality has a shortfall, has an infrastructure problem. Now, the ask is, wait a second, we want to join back up and have you take over what we decided we wanted to do on our own. And I can give you an exact example of Randolph Center where I live, they formed a water district, fire district. It even has Vermont State College on. That is

[Dan Riddlehuber (Tri-Park Development Consultant)]: not part of the town.

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: And that system has major problems. And all the board that created it are long gone. No one has the records and there's possibly a massive deficit. And so now there's a petition to the town, Hey, take it over. I know what's going to happen. Obviously, town is very hesitant. They don't know what they're getting into. And the other voters in town, they've voted to only fund the village wastewater in Water District thirty, forty years ago, but never voted to

[Dan Riddlehuber (Tri-Park Development Consultant)]: take on the one up

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: the hill that was privately financed and sourced. And now they're being asked to say, hey, it's crumbling, take it over. And that's what you're dealing with in these situations. And that's just gonna be a hard

[Chair Marc Mihaly]: I I fully understand. I understand the complexity. Yeah. I just would like to avoid a situation where the rather arcane complexity Yes. That you describe of Vermont is used as a device for frustrating any change. Yeah. Okay. I thank the committee for indulging me in this long detour, but I couldn't resist. I apologize.

[Samantha Sheehan (Vermont League of Cities and Towns)]: We have the municipal liability bill. It's in house judiciary.

[Chair Marc Mihaly]: You mean They cap on it.

[Samantha Sheehan (Vermont League of Cities and Towns)]: Yeah. To put a cap on it. We think it would help move conversations like this forward in many different committees across the building. Storm water utilities, both purchasing on-site It's

[Chair Marc Mihaly]: in house shooter,

[Josh Stanford (VLCT Director of Intergovernmental Relations)]: who introduced last year, hasn't had any testimony. We would welcome your encouragement that this is an essential for communities working together and for infrastructure and joining up with things because we need some sustainability on our liability that we have when we take

[Chair Marc Mihaly]: on new projects. Okay, last question, what you got?

[Rep. Gayle Pezzo (Member)]: So it's a comment. So one of the reasons that I didn't put any of this in my bill is because it's an octopus all by itself, and I don't mention this that often, but that's one of the reasons why Westbury became an incorporated village, is to try to manage. And we haven't been successful with being able to take over the water and the roads because codes, it has to do with codes, it has to do with, I mean, there's just so much to this. I think it's a bill all by itself.

[Chair Marc Mihaly]: Well, I thank you both of you for really, really thank you very much for your expertise, and we appreciate your testimony. And gentlemen of the committee, before we go offline, so tomorrow, we're done for the day, house floor. Tomorrow, we start at nine a. For mental health advocacy day, and then we are taking on a series of new bills, which are going to be introduced through lunch, and then other things in the afternoon, which I'll get to, but we have a full day that goes all the way to the house floor at 03:30. No rest for the

[Rep. Gayle Pezzo (Member)]: And again. For the wicked.