Vermont Legislature SmartTranscripts:

[Mary E. Howard (Clerk)]: Okay, now we are live. We will be hearing two introductions by our esteemed chair. And the first one is H772, an act relating to residential rental agreements, eviction procedures, and the creation of the Positive Rental Payment Credit Burning Pilot Program.

[Marc Mihaly (Chair)]: The floor is yours. Thank you. Marc Mihaly, Director representing Plainfield, Caledonia and Marshfield. So, I guess it was during the summer that I started talking to our counterpart at the Senate, Allison Clarkson. It's pretty obvious that right now the status quo with respect to landlord tenant law isn't great. It's a rising rents, rising costs, combined with almost no housing availability has meant that people who are evicted very often are becoming homeless. And fairly landlords are just feeling like from the business model it's broken and that they don't want to be in it and they want to leave and certainly, most importantly, don't want to invest in expansion. And so the situation is one of these situations where the status quo is bad for everybody. Conversely, the other hand, a field that has been marked by really strong disagreements, very powerful disagreements between landlords and tenants, both unorganized and organized, And a lot of mutual unhappiness and distrust. And it is, you know, I guess in that kind of situation, is it unclear whether dissatisfaction with the status quo is sufficient to overcome resistance to compromise or not. We have complicated political situations, which everybody knows, so there's no sense of beating around Bush. There's four other bills, at least, on our wall having to do with landlord tenant issues. Saudia has a bill, Debbie has a bill, Chloe has a bill, in addition there are two other bills that deal with more certain specific issues, but, so what Alison and I decided to try was to see if we could produce a compromise build, and which is always a hazardous effort, And that's why, and we just decided to do it and we worked on it, we worked on it during the summer, we met with tenant advocates, we met with landlords, advocates and landlords, and we came up with the bill. I am not pretending by any means that this bill is perfect. It's compromised. It's very deliberately aimed at being compromised. So there's lots of things that either side would like that are not in this film. The theory behind the biliary simply is pretty simple, rather brutally simple, which is to give each side what it most wants, regardless of the fact that the other side really doesn't want what What the other side wants. What the other side wants. It really focuses on giving each side what it wants. So, I'll give you a couple of examples, but I'm not gonna take a lot of time on it because we'll have a walk through, guess, a couple of weeks or ten days when we take this off. And also things are connected with each other, so it's hard to tease it apart, but I'll give you a couple of examples with the understanding that we'll have a detailed walkthrough later. What tenants really want is an end to no cause eviction. Period. I mean that's not all we want, but that's a really, really important thing. So this bill ends no cause eviction. What landlords really want is a much simpler and faster eviction process and this does it. With cause. With cause. Tenants, landlords are very concerned, non profit and for profit, the problem of the drug dealing or violent tenant that is destroying property. The easiest way for them to deal with that is to have no cause eviction because then they can just get rid of a tenant who's violent. The problem they face is that if you take away no cause, which we have done in this film, is that they can't prove cause because they can't get other tenants who are fearing for their lives and safety to testify against the violent or drug dealing tenant and this is a very common problem. So this bill contains a provision, I'll go into the weeds just one minute as an example. It contains a provision that says that a landlord can file an affidavit under penalty of perjury alleging the facts that say that this person, let's say, is a drug dealer. And then there is very quickly, very quickly a show cause hearing, like within a week, in which if the tenant has to show up and under penalty of perjury state facts that would be contrary to that, in which case there's a hearing, but if the tenant does not show up or there are no facts, the tenant is quickly out. Is that a perfect substitute for no cause? No. There are things, one of the reasons landlord wants no cause is because it helps them deal with the tenant that makes them, particularly if it's the landlord, it's a woman, makes them just feel unsafe. They haven't done anything wrong, they're just creepy or they don't like them. Well, sorry, that's not a reason to keep no cause in this compromised bill, but on the other hand, we have left in the ability of the landlord to simply not renew a lease. In other words, if you sign a lease for twelve months, that's what you're signing. The landlord is not signing a lease for life, they're signing a lease for twelve months. So that's, I don't wanna go into all of the details, but that's just an example of the back and forth. Tenants very much would like to see what I would call rent control, that is a control over rents generally, and there are states that have that, although most don't. This bill does not contain rent control. But on the other hand, we have a big problem in Vermont that people, there have been a lot of situations where a building has been sold, the original landlord, you know, walks away with a very substantial gain and the new owner comes in and really jacks up the rent, that can't happen under this bill. In that situation, for twelve months after the sale, the rent increase is limited to CPI plus 3%. Tenants would like that kind of a provision across the board, it's not in this bill. I'm just giving you examples of things we didn't put in the bill and things we did. And frankly, you know, whether that's a fool's errand, as I keep like saying, it's just everybody's going to be so unhappy with it, it won't go anywhere, or whether people will live with something like the compromises, I don't know. I see it as a vehicle for this committee to work with all of the other, and when we do have a walkthrough, the walkthrough is gonna be on all of the landlord tenant bills. Just comparing, like Debbie has, for example, one more example, then I'll stop. I'm just trying to give you a flavor. Right now there are certain things in the process that take thirty days. We've limited it to fourteen days. Debbie has a bill where it's three days. I'm just trying to give, and you know, in California there's places where it's three days. So, we will, that's kind of an example. In sum, I'm humbly putting this out as a vehicle for people to discuss whether there is common ground. Finally, I will acknowledge a problem. I don't have an answer to this problem. When you have a situation where there are really bad actors on both sides, and there aren't. There are terrible landlords and there are just terrible tenants. When you have a situation with really bad actors on both sides, the tendency for each side is to want to address the bad actors. But you have to be careful because most people aren't bad actors. Most tenants are great tenants. Most landlords are fine, but if you aren't careful and you address the bad actors, you can hurt the good actors by going to be too extreme by doing something that doesn't make sense for the big myth. And so that's a real problem when you're trying to craft legislation where you have these extreme examples. So that's why we did it. Why I did it? It's in the Senate, it's here, it's not moving in the Senate. Senator Clarkson and I agreed that we would start it here. That's partly because, Senator, we have a similar situation with appeals, you know, the whole housing permit appeals process. We have both of us introduced bills to try to accelerate the appeals process and to make it harder to challenge housing and it's going to start in the Senate. There's just no way that she can do both appeals and landlord tenants who would just agree that that's the way we do it. So we're starting it here, we have a lot on our plate, I imagine ten days from now this will be on our plate. I'm happy

[Ashley Bartley (Vice Chair)]: to answer any questions. Yes? When we do the walkthrough of all this bill and all similar bills, will that be an opportunity for or will there be created in that process an opportunity for the other ideas that were not made, were not bills in this biennium to also be enunciated? Of

[Marc Mihaly (Chair)]: course. And I do think that, I'm hoping, I mean, actually a walkthrough of all five bills isn't gonna be that hard because I don't think you do it by saying, oh, walk through my walkthrough Debbie's bill, because what you do is issue by issue. What's the position here on trespass? What's the position on, you know, etcetera. So yeah, I think so. Thanks. And also, by the way, the bills that haven't been introduced will be introduced by their authors first, and we will ask both Saudia, whose bill was introduced but so long ago that it has escaped my memory, to not introduce it but to speak to it, and we'll ask Debbie, of course, to introduce her. Yes, Drew.

[Thomas "Tom" Charlton (Member)]: Of the common problems is that I have, as a landlord, you'd say, like, I have avenues to do this. It's just there's a thousand delay stall. I have, you know, every right to do this, this, and this, and it still takes six.

[Marc Mihaly (Chair)]: Does your bill address that part of it? Well Like, and fast Part of the in my request, Part of the bill was drafted by attorneys for landlords, with the idea of doing that, reducing that. It doesn't eliminate it. It reduces it. Reduces the delay a lot. There will be presented to the committee a table which looks at about like five or six states and shows how long, more or less, I mean, of course it's an average, how long the process takes in each state, and I would tell you, we are an outlier. But that's not the end of the process. I mean, it's easy to look at the list and say, oh my God, we're so pro tenant, it's not that simple, because some of the states that are much faster have very strong tenant protections that we don't have. But they that are not on our bill.

[Thomas "Tom" Charlton (Member)]: In your way. In your work on this, did you look at that, like, how Vermont is viewed nationally? Yes. It's not how

[Marc Mihaly (Chair)]: we're viewed nationally, just Well what's the situation in other states?

[Thomas "Tom" Charlton (Member)]: Yeah. For any type of rating, type of schedule, are we like, which side do we

[Marc Mihaly (Chair)]: see We're we're in terms of the length of eviction process, just that that narrow issue, we are one of the longest. This bill would move us to kind of the middle, a little maybe better than the middle. We are also one of the states, we are not one of the most protective of tenant states either. In what ways? Do

[Thomas "Tom" Charlton (Member)]: I

[Leonora Dodge (Member)]: know what? In what ways? Can you give any examples? Just curious.

[Ashley Bartley (Vice Chair)]: Yeah, I mean there are

[Marc Mihaly (Chair)]: states that will not allow anybody to raise a rent, more than a certain amount. There are states that require landlords, the federal government has, require landlords if they do not renew the lease to pay to relocate the tenant. Relocate tenant. I mean, there's a huge range. We are not amongst the most protected states.

[Ashley Bartley (Vice Chair)]: Yes. Do you know how many states there are in the country that don't require written license?

[Marc Mihaly (Chair)]: No, I don't know how many. I do know that more than one common, gee, I'm getting into the details, one of the provisions that a lot of tenant organizations want is a requirement of a written twelve month lease. And some bills, and I tend to think that if you require a twelve month lease, you would have to do it, say what has to be in the lease at some length, that's not in

[Thomas "Tom" Charlton (Member)]: this

[Mary E. Howard (Clerk)]: bill. According to Google, while all 50 states generally allow oral rental agreements, no state strictly requires a written lease for a tenancy to be legally binding.

[Marc Mihaly (Chair)]: There are, part of the problem is there's many situations where a month to month lease really makes sense, other situations where a week of lease makes sense, and we just didn't get into it. And partly, but I will tell you, there was nothing more that I don't want to pretend that there's a lot of science behind this. A lot of it was just a sense of what would fly. My feeling is that if a bill has to proceed, it has to proceed on a bipartisan basis or it won't succeed. It either won't get out of the house or it won't, it'll be vetoed.

[Unidentified Member]: Can I just make a comment? My daughter rented an apartment in the North End Of Boston for like fourteen years. She never had a lease, and she had the best landlord. Sometimes the And she moved, and then it was the opposite.

[Marc Mihaly (Chair)]: Yeah, I mean that's an example, know, you have to be careful. There's so many stories of good relationships that are on a handshake.

[Unidentified Member]: So, right now is it thirty days, sixty days, and then it can go to legal and go to court, and let's say that's true, how much time does it take from them to have somebody wed a sheriff?

[Marc Mihaly (Chair)]: I can only say one thing and the rest I can't remember, I'll stop in my head, but we will have a walk through that will tell you all of that. But my impression is, in Vermont, the time, from the time, you have to give a thirty day notice mostly, but it depends, but let's just say thirty days, from the time of the expiration of that notice, Notice of eviction. The notice of eviction, from the time of that moment to the time that a tenant is effectively evicted, is in Vermont, is approximately four months. It can be six. In certain circumstances where the tenant is aggressively represented and has lots of money and or has lots of money, it can be a lot longer, six months. It can be shorter. Part of the problem is that it's like anything else, tenant landlords who are generally, but not always by any means represented, If they are well represented, it's faster. If they are not, it can be really long.

[Unidentified Member]: Does this rent arrears orand behavior, Like, is there any difference between whether they're behind in their rent or if they're just an undesirable or they're wrecking things? Does that make sense?

[Mary E. Howard (Clerk)]: It's written out. Are you talking about currently right now? Yeah. I would say it's up to the discretion of the landlord because your landlord could very easily say, Hey, I heard you were in a car accident and you now have to pay to get your car fixed, and I accept that. I'll let you be late this time. So it's up to the discretion. Or you could have a landlord be like, You're a date late, you're done.

[Marc Mihaly (Chair)]: There is also a rental arrears program, which is run, actually run by a person who's sitting in this room, and it is, the bill contains an appropriation of a million dollars, which violates my promise as chair of the appropriations committee that I would never ask for 6 figures from her, but it is a program that is an administratively created program pursuant to a very quick little mention and it is one that is up for discussion as to what it will contain, but it helps people in that situation that the Vice Chair just mentioned, someone who has the ability over time to pay, but some event has happened that makes it difficult and I believe the landlord has, the tenant and the landlord have to agree to invoke the program.

[Unidentified Member]: I have a question for you.

[Mary E. Howard (Clerk)]: Is that the only appropriation in the bill?

[Marc Mihaly (Chair)]: Give me one moment now, Vice Chair. Thought there was

[Ashley Bartley (Vice Chair)]: 100,000 to CVOEO for a mine life. CVOEO, as I mentioned, one

[Marc Mihaly (Chair)]: of the things we wanted to do in this because I actually think it would make a difference for people in the middle who aren't the bad actors, is to have a serious, serious educational program for tenants and for landlords on their rights, their obligations and their remedies. And CVOEO already does this sort of and they have agreed to run such a program. And I believe that if they do, but it's not in the bill, they will be working to legal aid on that. There are so many landlords who are small landlords, who really don't know what they can do, what their rights are, what the penalties of the courts many test who don't know.

[Mary E. Howard (Clerk)]: Are there any more questions? Alright, we are now going to hear H-seven 75, an accolating to creating tools for housing production. And we are honored to have not one, but two sponsors here to talk about the bill.

[Ashley Bartley (Vice Chair)]: I

[Marc Mihaly (Chair)]: just want to say one more thing to our landlord tenant. One of the problems that we face in Vermont, and perhaps you've all seen this in other areas, is we're not like other states, in that we tend to be dominated by small entities, not large The landlords here generally are, there's a lot more small landlords who can't tolerate what some big outfit can, and we have to

[Ashley Bartley (Vice Chair)]: That depends on your town.

[Marc Mihaly (Chair)]: Yep, that's true. Absolutely, are towns and big landlords. And some of the biggest landlords are non profits.

[Thomas "Tom" Charlton (Member)]: And the Champlain Housing Trust is a very big one.

[Marc Mihaly (Chair)]: Tom and I started talking about this last year when we were working on CHIP. We just felt, you know, CHIP, remember CHIP guys? If it was divine with the idea that it would be simpler than tax increment was, and that it would work for rural Vermont, and we feel like yes, hopefully it will, but not for real rural Vermont and not for really small projects. That a project of five homes or 10 homes built by a small developer was never going to be able to navigate shift. And so we started talking back then with what I will call a rural, it's not called in the bill, a rural housing finance initiative. And we ended up with a bill with five key elements. And I'll run through them quickly and one of the most important ones Tom will take, as he's really been working hard on it. A portion of the bill provides for a pilot program run by, at this point, DHCD, I mean that's up for grabs, but DHCD in this draft of the bill. And this pilot program, anybody with a project of less than 16 or less units in a town of 5,000 people or less can apply for this program and if they are selected for this pilot program, they don't pay any additional property tax for seven years and then it goes up and in the tenth year they pay full property tax. And it's a three year program. It ends at the end, it's a pilot program, it expires in three years and it, the idea is to see whether or not there are project, let me back up, one of the biggest problems we have in Vermont, as you know, is that Vermonters by and large cannot afford to buy or rent new construction because it costs too much. They just can't pay the rents or the mortgage supporting the new construction. Well, what that means is that in places where in Vermont, where there's not a lot of capability to pay high rents, instruction has kind of slowed down because it's hard, developers can't make it work. So what do you do about that? Well, there's one answer is you make it easier for them to make it work. Well, how do you do that? Well, one way is you tell them that when they do their little spreadsheet, they don't have to include property taxes for seven years and then it just goes 25%, 50%, 75%. And the reason it's a pilot program is to allow JFO to say, here's what the maximum cost of this program will be to the education fund, period. You know, it just doesn't stretch way out into the future. And also, to find out whether anybody shows up. I mean, there are people, I mean, it's natural that the development community will always support something like this because why not? I mean, you know, it's good. But on the other hand that doesn't mean that they'll actually be able to make it work even with this kind of subsidy. I don't think the problem in Vermont outside of Chittenden County is, and maybe there, it's not but for, it's even with. So that's one piece. Another is, this is a little in the weeds, but compared to what you've been hearing in the last few days, you're used to the weeds by now. And live down. Yeah, you live in the weeds, yeah. One of the ways you can pay for improvements, whether it's a road leading in the development or a playground or something like that, or any cable, anything in the development, is to create a special assessment district. You draw a line around the development, you figure out what it's going to cost, and you may issue bonds, and the bonds pay for the thing, whatever it is, when you build the development. And the people who have to pay it off are the people who live in the, well the developer in the beginning and then let the house sold. The people in the development, you know, when they get their tax bill they'll get an extra line that says you owe an extra two fifteen bucks assessment for this and it has to be revealed to them before they buy the house. That's a very common financing device throughout The United States. It helps developers raise money in a simple way. The problem we have in Vermont is select boards can create these assessment districts, but they can't sell the bonds without a vote of the whole town. And that has been used to stop projects. Well, if the whole town was going to pay or if the whole town fell full faith in credit, stood behind the bond, that's understandable. But these assessment bonds, the bondholder can't look to the town, they look to the development and those assessments, and that's all they get. So they usually charge a little higher interest because it's riskier, but so this bill would provide no vote. If the full faith and credit of the town is not at stake, if the town is not backing the bonds, the only people who vote backing the bond is the developer or the development, there's no vote. It's just the town select board can create it. Which, by the way, is typical of most states.

[Leonora Dodge (Member)]: Can I ask, so this would not be a setting up a brand new development unless it was just the

[Ashley Bartley (Vice Chair)]: developers putting down Usually

[Marc Mihaly (Chair)]: in a brand new build? In other words,

[Leonora Dodge (Member)]: let's say I like boat, there are no people living there yet.

[Marc Mihaly (Chair)]: It's just the developer. Got it, okay. Yeah. But, by the way, I forgot to mention the tax, first thing I mentioned, where you don't pay any taxes, that only works small towns, small development, no chip. You can't do chip and that. It's for small projects, yes.

[Unidentified Member]: I'm confused, it's not in a town?

[Marc Mihaly (Chair)]: Yeah. Oh, then what would

[Leonora Dodge (Member)]: I was saying if it's a new development and what the chair is proposing is that in most places the whole town gets to vote even though on whether this small group of people can borrow money to build a small thing within the town boundary. And he's saying that doesn't make sense because the town, there could be just that knee jerk reaction, no, don't spend any money. Well, it's not going be money out of their pockets. Right. Or risk to them. So I was just curious, but when there's no people in the development to vote yes, then how does it ever get done? It's like

[Thomas "Tom" Charlton (Member)]: cosigning a loan with the kids. The town, it's the town's credit that's being considered, that's why the town votes on it. But if the town's credit is not part of the picture, it's just the developer in how that project bounces out, then it does it pretty much.

[Marc Mihaly (Chair)]: Right. The reason goes up at the end, in other words, like for seven years I think, there's no, it'll pay tax more than the original whatever, the parking lot or whatever. Yeah, no increment. But then it goes up 25, 50%, 75% and then a 100%. It's because by then people are living there and they're the ones paying it off and we just don't want property taxes to land on people Here, 10 all at once, so it kind of goes up. But otherwise, in the beginning, in this case, there's no vote. The reason there's no vote is because the only person who would vote in the beginning is the developer. Right. And the developer won't ask for it unless they want it. I mean, it's not like it can

[Leonora Dodge (Member)]: be imposed on them. And this is just for housing development, it's not for infrastructure or No, other implements, so it could

[Marc Mihaly (Chair)]: it's just for the, it's just infrastructure usually. Then, keep going, I don't know if you remember, but the treasurer has a program called 10% for Vermont. We have a lot of money in the state, it's just invested in very liquid ways, you know, it's got, I don't know, I really don't know how much, billions just floating around because we have money watching in and out of the Treasury all the time and it has to be pretty liquid because, you know, we need it when we need it. But it doesn't all have to be liquid and the treasurer has a program which we authorised in its legislation called Ten Percent from Lamont that allows the treasurer to take 10% of the money, the balance, and invest it in housing. And they do. They have a committee, they issue RFPs, they get proposals, they make very low interest loans, two, three, 4%, depending. This bill makes two changes to that. With treasurer's office, it's been very helpful. One is it's not 10% per month anymore, it's 12.5% per month, because the treasurer feels comfortable now that we can use a little more money. That's really something. The second is, you know, the treasurer has a lot of money out on loans now, to developments, and gets paid interest. The interest on that goes back into the general fund. In this bill it goes back to housing. And then, finally, and then before we get to the real kicker here, which is the, what's the word, off-site modular accelerator. You remember VHIP, the Vermont Housing Improvement VHIP gives up to 50 plus 20 more for accessibility to landlords to upgrade their units, so it's been very successful. One very little small thing about it is, it's a reimbursement program. The landlord who applies, they have to pay for the whole thing and then they get their money back up to $50 or 70 from the state, but they have to be able to front the money, okay. We worried that this wouldn't work too well for the small developer in rural areas and so it gives them the ability to advance the money at that time. So instead of asking a developer, the developer applies, they are approved for the programme, the work begins, but as the work is done, they can have the ability to pay for the work as it's done, and then instead of the usual process where the developer pays for it as it goes and then they reimburse the bill. Yes?

[Ashley Bartley (Vice Chair)]: My understanding and when I've asked it every time, I have received the same answer, is that BHIP is not to be used for developers. Well, it's the landlord.

[Marc Mihaly (Chair)]: The owner of yeah. The owner of the

[Ashley Bartley (Vice Chair)]: I'm sorry. Yeah. So this, like, VHIP is not being used in conjunction with those developers. No. VHIP is specifically only restricted to single residences. Is that

[Marc Mihaly (Chair)]: Well, no. No. It can be if you have a five unit building, you can rehab a five unit building.

[Ashley Bartley (Vice Chair)]: Well, single

[Leonora Dodge (Member)]: ownership. Well, I think it was just a slip

[Unidentified Member]: of the tongue. Well, I would be

[Ashley Bartley (Vice Chair)]: I want to because I just wanna verify that that is not that is not being used by developers. Yeah. And that the owner of the building is not a developer. That is a person who I think originally it was supposed to be a person who resided on premises. Right? I don't the

[Thomas "Tom" Charlton (Member)]: bill changes the program other than to provide money up front for if you're gonna pay someone to come in and rehab the unit, they're gonna ask for a deposit.

[Ashley Bartley (Vice Chair)]: Yeah, right, right, right. We agreed that that was an inequity.

[Marc Mihaly (Chair)]: It doesn't change anything. It's literally one line.

[Ashley Bartley (Vice Chair)]: Okay, thank you. So do

[Leonora Dodge (Member)]: we look at it as a 0% loan or just sort of being dispersed little by little?

[Ashley Bartley (Vice Chair)]: It's a 0% construction loan. In home improvement.

[Leonora Dodge (Member)]: And it's not for new construction, it's to improve a home that has a rental unit that has become unit Almost unattabitable. Or

[Ashley Bartley (Vice Chair)]: to make it accessible. Right. But just to clarify, we have not defined what accessibility is, so those grants are not actually being used for or reimbursements are being used. You mean it's mostly the $50 and not 20? Because we didn't have the study, because the study got cut, they haven't defined what accessibility actually is, so that is not a real program. So should we address that in this bill?

[Marc Mihaly (Chair)]: They are coming in to talk about the We'll have Sean Gilpin to talk about

[Ashley Bartley (Vice Chair)]: what's been done and any questions that we might have.

[Marc Mihaly (Chair)]: Then we have the housing accelerator.

[Thomas "Tom" Charlton (Member)]: Hammers and nails. Tom Charlton, representing Chittenden, just tuning into our program now. This, the off-site construction accelerator, that has been taken from the language of the governor's housing bill, is another committee. This is specific to the procuring bulk ordered off-site manufacturing housing. That is just to continue the distinctions and the vocabulary there are trailers, there are mobile homes, there are manufactured homes and off-site, off-site manufactured housing is modular or penalized. They're very much a lot of the same construction, in some cases as a stick built home, but you can build them faster, you can build them indoors, all winter long, it's easier to use equipment, so their workforce is much more diverse because you don't have to carry stacks of rafters up a ladder. The people we've had in last year, as you may recall, we talked about modular building, Huntington Homes, Mount Home Laminates, they both made the comment that the savings in using this type of construction is only realized when they're not having to retool for every single house they built. They build the same unit a number of times over, that's where the savings can be realized. What this section of the bill does is it enables Commerce and Community Development of the Department of Buildings, General Services, who does most of the procurement for the state, even collaboratively with treasurer's office. It enables them to pull together all, there's a lot of groups working on very similar concepts. This has been talked about both in the VHFA report that was given to us beginning of the last session, I'm sorry, I'll say construction, eight zero two Homes, Homes For All, that's something to me, let's build homes and everybody's having these conversations. This enables them to pull all of those groups and key players together, develop a pilot program and launch a pilot program. There are criteria in the bill as to defining what we want the program to do. My intention is to give them the latitude rather than me trying to micromanage what they know how to do, or us rather, is to give them some parameters and let them develop it as they determine it will best work. The intention of the accelerator is to be able to put together bulk, is bulk purchases in most small developments we're talking earlier in developed by developments of up to 16 units. They're not gonna hit the magic number for a bulk order and savings. So what we are asking these departments to do is coordinate among a variety of end customers the purchase of, let's say there's a, and I'm not saying this hypothetically, I don't know if this is how it will play out, let's say there is a pre permitted, pre engineered, pre beam printed model from August catalog for a duplex and Brandon wants two and somebody up in Milk Bucket Flats wants four and somebody down our end of the state wants three. Amongst a number of small developers, the state then puts together a bulk order that will have that reduction in price. Bolton places the order and this is where the treasurer's 2.5% comes in, you guarantee that order at the end, the end customer is not the state. The state is just assuring that purchase, they get delivered to wherever they say so. So we're asking them to coordinate this on behalf of small projects and pass the cost savings on to the small development so that that is another piece of how their project pencils out, making it possible and making it a little bit less expensive. There are two advantages to the modular homes right off the bat in small developments in particular. One is that they appreciate for customers or families that are looking to build some equity down the road, they do appreciate the same rate as a stick built on-site house. Are generally better insulated, they feel a little sturdier, and there are of course variations in quality. The second is that with a small develop, there is less of a need to utilize federal funding. One, it's not in the same availability that it once was. Also, talking contractors in particular, there are a lot of criteria made for accountability, reporting, and different standards of building standards that get very, very complicated and are expensive to administer at the contractor end. And which means this is part of what drives the per unit cost or some of the bigger developments up. The federal funding is still a benefit, but for $100 it's not a $100 benefit, it's more like $60 because you have to pay people who administer all this stuff. So the smaller developments have the additional advantage of being just by virtue of the fact they're simpler to manage, it's just another way that they can make that cost competitive for whatever families or people are looking to purchase.

[Marc Mihaly (Chair)]: I just clarify one thing, or emphasize it, as Tom said, it's not a program where the state buys these houses. The developer's gonna buy them, but if you're gonna ask Huntington Home to open up a whole new line, reduce 40 or something, the state stands behind it, so that, and the treasurer has been very helpful here and worked with us, they stand behind it so that Huntington feels like they can do that. And one of the things that emerged from our testimony last year is that off-site modular homes, if you don't have bulk ordering, they're not really much less expensive than just regular state filled homes, but bulk ordering has the capability of bringing that down, and that's what this subtitle did. And just finally, want to mention one thing, the way we're managing this, you know, we're launching this Friday in a joint, that's tomorrow. After lunch. After lunch, in a joint hearing with Congress, because we thought we would do it the same way that we did last year with GIF, where Congress hears it, commerce will take care of the tax stabilization and the special assessment, they do that stuff, they won't have possession of the bill, we'll keep possession of the bill, but they'll do the hearing and the writing and the rewriting and then just give to us their work. We'll do the 10% for Vermont, the off-site accelerator and the VHIP part.

[Mary E. Howard (Clerk)]: I was just curious, I know that we had heard

[Leonora Dodge (Member)]: that there were cost savings. Do we have a sense? Do we have a percentage? If right now every unit is half 1,000,000 or 600,000 for affordable housing, what would we be talking for? Person? Free paper? Actual figure is

[Thomas "Tom" Charlton (Member)]: going to depend on the model as much as anything else That will determine how many units, you know, where the sweet spot is, because there will be a certain number below, beyond which it's not going to change the price much. But they're going to have to look at the design and the criteria and materials, things that have to be worked out. For instance, you get two homes. This is criteria the department will have to look at and standardize, really. There may be options to order from multiple suppliers. There are several in the state, one development might want to use cross mod construction, another one might want to use panelized construction and do the finish locally. The volume, I think the largest plant is Huntington at the moment for volumetric, the big box on the flatbed truck. One additional, one you know that I feel strongly about, one additional advantage off-site manufactured homes is it does not run into certified payroll that is vacant, the prevailing wage, if it is built indoors in the plant, the reality wage applies once they get to site, and if they're only on-site one or two days, that's another, it's generally a little more safe. It's all just little bits and pieces that bring the eventual price down to the range.

[Marc Mihaly (Chair)]: I remember something about, it's the real world. It was not constructed by a set of ideas, It's just people, right? What that means is that there's no such thing as a definition. There's no legal definition of things. It's just what people say, what the words that they've invented. So we have in this committee said manufactured homes are, have been generally single wides and double wides like we saw at Fecto, okay? That's manufactured. Then you have on the other side Huntington Homes, which is essentially building like a house that looks just like a stick built house, but instead of building it out on the site, it's building it at the factory and bringing it, and we call those off-site modular homes, or volumetric homes. The problem of course is that as things change, the manufactured houses get bigger and they're two story versions and they look more and more like a regular house, and you know, it's, so you can't be too rigid with these definitions, they're just comments, they're just what's applied out there in the real world. But this accelerator contemplates, it's not an accelerator for single wides and double wides. It's for Modular. Modular homes, which are yeah. And what the savings will be, I think that some of the models that we saw in eight zero two Homes, you know, where those pilot programs going on, some of them are single story duplexes. They could be pretty cheap. Yeah. But they won't be $150,000. Yeah, they won't be. No, I mean, I don't know what they'll be, but they won't be half of what it costs, it'll be, but a substantial savings. I just don't know. We won't know until it happens.

[Ashley Bartley (Vice Chair)]: We have, Elizabeth had a question and Dana had a question. Did you take into consideration the possibility of requiring universal design for these sums?

[Thomas "Tom" Charlton (Member)]: I would defer to the answer given students, Chris Baughlin. Somebody was in here from Westfield Homes, eight zero two homes, and most of the designs, he pointed out one design on the slide, but most of them have at least one accessible unit.

[Ashley Bartley (Vice Chair)]: That's not what I'm asking for. I am asking whether you took into consideration requiring universal design for any, not a portion, but all of the designs, not just from eight zero two Homes, or from anybody who's going to get state money.

[Thomas "Tom" Charlton (Member)]: Think the department will have to issue a request from Moses, which will have all the specs in it that they expect companies to bid on. So basically they're about to bid.

[Ashley Bartley (Vice Chair)]: And do you think that they will do that on their own without being required?

[Marc Mihaly (Chair)]: You know, why don't we just say, no, I think we're I

[Ashley Bartley (Vice Chair)]: want you to say it out loud,

[Marc Mihaly (Chair)]: No, no, we did not go say I'm not saying we didn't

[Thomas "Tom" Charlton (Member)]: Not yet, I don't know, but I do realize, and one of the things in the modular construction is that it's often too straightforward, in which you cannot do

[Ashley Bartley (Vice Chair)]: But with universal design, as a builder, I think you know that it does not add money to the cost of building or to the cost of design.

[Marc Mihaly (Chair)]: There has been, in this bill, as it stands, there is not a requirement that in order to qualify for the accelerator, the unit has to have universal size, it's not an adult.

[Ashley Bartley (Vice Chair)]: It discussed at all?

[Marc Mihaly (Chair)]: No, not

[Thomas "Tom" Charlton (Member)]: yet. It's gonna come to work.

[Marc Mihaly (Chair)]: Thanks. One of the, but let's see, not quite. And one of the tensions is we're throughout this bill trying to allow as much flexibility as possible because one of the complaints about chips and certainly about other programs that they're so loaded up that small developers can't do it.

[Ashley Bartley (Vice Chair)]: Once again, it doesn't cost extra money.

[Marc Mihaly (Chair)]: Yeah. Right. But no, I'm just saying that in drafting, we tried to keep it general and allow a lot of flexibility. I'm not saying that we couldn't amend the bill and put that in. It's just not there now.

[Thomas "Tom" Charlton (Member)]: We're waiting on proposed language for the bill from a couple of the departments to make sure that it would be along the lines of something we would want to consider. We Didn't talk about it, I'd say no.

[Ashley Bartley (Vice Chair)]: My point is that you didn't think of it. Well that's why it comes to the debate for conversation.

[Unidentified Member]: I have two quick questions. What's the difference, is there a difference between modular and prefab?

[Thomas "Tom" Charlton (Member)]: Prefab apply, prefab is anything that's pre built, so that would apply to panelized homes the same way it would modular home, things are different.

[Unidentified Member]: And do you have, I know that

[Marc Mihaly (Chair)]: you said as far as a price, a ballpark of nothing? I'm just, the only ballpark is what I said. It's gonna be cheaper. Definitely cheap. It's gonna be cheaper. It's gonna be somewhat cheaper. My own view, personal view, is I would be surprised if it was more than that. I would be really pleased if it came in at $200,000 cheaper, I wouldn't be surprised. We

[Thomas "Tom" Charlton (Member)]: do have a comparable number. New York launched a program very similar to this in September. They're building cross mods, which are basically a beefed up manufactured home. These are 1,500 square feet. They have a steeper pitched roof, they have a porch, they have a one car garage, they have three bedrooms, two bathrooms, and they are about two fifty. Comparable homes right now, Stateville. Installed down or down? Not the land, because the land I even know is where the depends a lot, but that's installed and with the occupying as

[Marc Mihaly (Chair)]: a cabinet. But that's also, those cross built elements are built in a factory and filled up in Pennsylvania.

[Thomas "Tom" Charlton (Member)]: I think those are from Pennsylvania.

[Marc Mihaly (Chair)]: Those are from Pennsylvania, that's more like an elaborate manufacturer's home. Instead of being a double wide, it's a double wide plus a couple of single wide stuck on. So in a really rural location,

[Unidentified Member]: in a really rural location, what would a piece of land, I know there's probably variables, but as an average, what would a piece of land cost?

[Thomas "Tom" Charlton (Member)]: That's a wildly different thing.

[Leonora Dodge (Member)]: But that's not what the money's going towards.

[Thomas "Tom" Charlton (Member)]: Well, that's not, yeah, that would be a developer's question or, and I can think of some municipalities that have land for not gathering any taxes on, Okay. That they might want developed so they could have said, I don't think you can buy land for less than 3 to $5,000 an acre in Vermont and I don't think you would want

[Marc Mihaly (Chair)]: to build on that land. Mhmm.

[Thomas "Tom" Charlton (Member)]: It would in realtor speak, it would have a potential potential clearing of use because it will be a swamp on the side of the mountain, but I mean, it'll go up to $10,000

[Mary E. Howard (Clerk)]: What a special place. There.

[Thomas "Tom" Charlton (Member)]: You know, if it's easily developable and it's already pertinent, it already has road access and the power lines there, it's 15 acre, 20 acre.

[Unidentified Member]: Yeah, know what you were saying, Leonora, I was just trying to get an idea of what that actual cost would be for that, with the land, that wouldn't be $250,000

[Thomas "Tom" Charlton (Member)]: No, but with volumetric you can build a quad on a very similar piece of land and the amount of cost for the land per unit is restored.

[Marc Mihaly (Chair)]: It's the all of this, all of it is nibbling around the edge of the reality that the best solution is subsidy and we don't have as much cash as we need to subsidize. I mean, none of these is enforced, we only have any that is affordable to people who are low income at the moment is manufactured homes in home parks and then very often, as you heard, with down payment assistance. We

[Ashley Bartley (Vice Chair)]: talked briefly about this, but I just want ask the question on the record. And that is, so we have this ACCD catalog of infill of housing that doesn't include official designs that wouldn't require permitting. But did you give any thought to their part two, which is a catalog of housing that wouldn't require permitting? And would you consider, in this accelerator, prioritizing funding or purchase or ordering of those houses? Yes, and

[Thomas "Tom" Charlton (Member)]: I think that's where 802 picks up. The designs are not finalized yet because of building specs, but that's the start of four point the padlock. Sure.

[Marc Mihaly (Chair)]: Thanks. Yeah,

[Thomas "Tom" Charlton (Member)]: I think they're good design. So that's some manufacturers already have some models that are very economical. They may have, They may be able to say, yeah, have this model, we already have everything we need, we can do it for x amount of money. With a request for proposal, it would be very appropriate to use those. Guess we're done.

[Leonora Dodge (Member)]: What about the question? I just don't remember whether we determined or you determined in this, what happens when the house gets resold? I mean, we can't find a $250,000 house somewhere.

[Ashley Bartley (Vice Chair)]: Right? Regardless

[Leonora Dodge (Member)]: of what the land cost or whatever.

[Thomas "Tom" Charlton (Member)]: That would depend on what the financing stack for the developer looks like. In other words, if they work with the HFA or they work with one of the land trusts, then they may have

[Ashley Bartley (Vice Chair)]: A perpetual affordability. Something the

[Thomas "Tom" Charlton (Member)]: financers and the dealers put in work or facilitate, but more for the most. Certainly not.

[Marc Mihaly (Chair)]: Yeah.

[Ashley Bartley (Vice Chair)]: Financing stats, I recently really dove into learning all of that.

[Marc Mihaly (Chair)]: Interesting. Yeah, and just by the way, the co authors are E. D. Ramming, Michael Marcotte, two of them, our vice chair and our thanking them.

[Ashley Bartley (Vice Chair)]: Finance stock expert.

[Marc Mihaly (Chair)]: We

[Leonora Dodge (Member)]: can