Vermont Legislature SmartTranscripts:

[Mary E. Howard (Clerk)]: Good

[Marc Mihaly (Chair)]: afternoon everyone, welcome back to Housing and Commerce. What do I say, housing in general, or general and housing there. It's still 02/12/2026, and we are live! Alright, we're continuing our discussion of '8 72 and other housing, 886? '6 8, 772, 440, etcetera. What I want to there's many issues, but we're working our way through them, and what I would like to deal with now, I would like to deal with application fees, okay? Current law basically prohibits education fees, correct counsel?

[Cameron Wood (Office of Legislative Counsel)]: Yes sir. I'm just trying to get to the section.

[Marc Mihaly (Chair)]: Seven seventy two explicitly allows, one, there were ambiguities that we were asked to clarify. Here it is. Take a look. You're in law.

[Cameron Wood (Office of Legislative Counsel)]: So it's a landlord or landlord's agent. Back up for the record, Cameron Wood, Office of Legislative Counsel. This is section 4456A residential rental application. You can see that the landlord shall not charge, this is in section A, shall not charge an application fee to any individual in order to apply to enter into a rental or residential dwelling. It doesn't apply to a commercial or non residential dwelling. Okay.

[Marc Mihaly (Chair)]: One of the questions that was asked was, what about credit checks? Perfectly, I thought, legitimate question. And what seven seventy two does is says that a landlord can charge for a credit check unless the tenant provides, you know, pays for the credit check and has it, gives it to the landlord. Unfortunately, I put the word nominal fee, which I wish to withdraw. Don't think, nominal means nothing. I mean, it just doesn't have a meaning. So I would just say fee for a credit check-in or whatever it costs it costs.

[Mary E. Howard (Clerk)]: Credit worthiness and background. What? Credit worthiness and background.

[Marc Mihaly (Chair)]: Not background, credit worthiness.

[Cameron Wood (Office of Legislative Counsel)]: So the current language in July defines what an application fee is and it includes a background check, so it would exclude Oh, wait. Sure. Yeah. It would exclude charging for a background check, but it does say you can charge for a credit check.

[Marc Mihaly (Chair)]: We're just starting, and we're Do

[Mary E. Howard (Clerk)]: you have an opposition to a background check, because typically they do help, they chop up, and they do both?

[Marc Mihaly (Chair)]: I'll tell you everything I know. I do not have strong feelings about this. I do feel like, on the one hand, I was specifically asked by a number of landlords to clarify that a credit check is essential, okay? And it's not that much money, I mean, it's not that.

[Deborah "Debbie" Dolgin (Member)]: 65 balance. What? 65. Yeah, but I

[Marc Mihaly (Chair)]: was also told, and I think we heard it, that there's a tendency to try to get around this section by a lot of what were called junk fees. What are they, like what?

[Ashley Bartley (Vice Chair)]: Yeah, junk fees.

[Marc Mihaly (Chair)]: Like for what?

[Ashley Bartley (Vice Chair)]: Oh, you're asking me? Well,

[Deborah "Debbie" Dolgin (Member)]: what do they call

[Ashley Bartley (Vice Chair)]: Like, what's the adult term for them?

[Deborah "Debbie" Dolgin (Member)]: What are they? Anyway,

[Marc Mihaly (Chair)]: I don't have strong feelings about this. I don't know how much a background check costs.

[Deborah "Debbie" Dolgin (Member)]: $65. No. Credit check

[Marc Mihaly (Chair)]: for both.

[Mary E. Howard (Clerk)]: They usually they'll combine most people. I mean, I'm sure there's some places that might do just a credit, but they probably charge the same thing.

[Cameron Wood (Office of Legislative Counsel)]: Sure. Having talked about this issue before when it was raised, part of it was a fairness issue because if I'm taking 15 applicants, just like we talked about before, you can pile on all the costs you want to a landlord. It's just gonna go in part of their equation for how much rent costs. Well, in this situation where you can charge the person the exact cost for a background in a credit check, that person pays for it and not everybody else applying or that's gonna be living in the building. So we get dispersed amongst everyone else. It's just the person applying for it pays that fee.

[Marc Mihaly (Chair)]: This is important because just to genericize this, it's not enough to be in favor of something or opposed to something because it's going to be passed on to everybody, that's social, that's called socializing Some a costs should be socialized, but others not, and what Joe is saying, not this one. Correct. So, what's the will of this group? Shall we put in the next draft of $7.72, background and credit check, or credit check and background? Take out nominal, just whatever the cost is?

[Cameron Wood (Office of Legislative Counsel)]: Yeah. I I would tie it to the actual cost of because I'm guessing everyone doesn't use the exact same company to do it. Something like Right. Remember $8 a month.

[Ashley Bartley (Vice Chair)]: CHT testified one year about that. They use a different a big company.

[Cameron Wood (Office of Legislative Counsel)]: So if you can if a tenant wants to say, like, show me the fact that it costs $90 and you

[Deborah "Debbie" Dolgin (Member)]: Mhmm.

[Cameron Wood (Office of Legislative Counsel)]: Cost $90,

[Deborah "Debbie" Dolgin (Member)]: I'll pick up.

[Marc Mihaly (Chair)]: Counsel, do you feel you have your instructions on this issue?

[Deborah "Debbie" Dolgin (Member)]: Debbie? Well, I mean, really doesn't apply to the stuff we do, there's no application fee. So you might have 20 people apply for a place, but it doesn't mean that you're gonna be doing checks on every single one of them. You might say, person's have at them or whatever, know, the case may be and then you might go on and do your checking. But I believe actual costs I go with that.

[Marc Mihaly (Chair)]: Correct.

[Cameron Wood (Office of Legislative Counsel)]: Okay. So what do we do?

[Marc Mihaly (Chair)]: $7.70 Bluetooth plus background check.

[Cameron Wood (Office of Legislative Counsel)]: Credit check and background check,

[Marc Mihaly (Chair)]: you can charge no nominal fee. Take out the nominal fee to just the actual cost. Then we have, this is a little stickier here, and again, I've received some real, I've looked at a number of the letters I've gotten. Abitability, okay?

[Deborah "Debbie" Dolgin (Member)]: Yeah.

[Marc Mihaly (Chair)]: Current law, and I'm waiting for counsel to. Very long. It says the landlord has to provide a habitable place, and I think it defines that as having heat and water, is that right?

[Cameron Wood (Office of Legislative Counsel)]: Those are the two things that are specified in the statutory section, but you have the Division of Fire Safety that have implemented their residential dwelling unit rules for Right, fire Okay.

[Deborah "Debbie" Dolgin (Member)]: I have a question.

[Marc Mihaly (Chair)]: Yeah.

[Ashley Bartley (Vice Chair)]: I had a friend who was living in an apartment that didn't have like a working oven or things like that. Is that specified in any way or of the responsibility of the landlord for habitability or is it just heat and water? It what says

[Marc Mihaly (Chair)]: what's it say? It says no rental agreement can

[Cameron Wood (Office of Legislative Counsel)]: This is just a statutory section,

[Marc Mihaly (Chair)]: I can pull up the rules. Any such waiver, yeah, of it's the implied warranty and habitability.

[Ashley Bartley (Vice Chair)]: I don't think we need to change that.

[Marc Mihaly (Chair)]: No, I'm not proposing However, to change seven seventy two adds a defense to ejectment where there are major code defects, and they are listed. Other states do this. Hi, Saudia. Can you hear? She's probably still connecting. Seven seventy two does what a number of states do, which is they allow a defense to object that action to be a serious code violation. The concern I had when this was drafted is I didn't want it to be just any violation, because I know from my own experience that you can have the most trivial kinds of problems. You know, your step is a half inch, one step is a half inch bigger than everything else, or whatever, and I didn't want that to apply, so what we did is that we actually went into regulations that the Vermont State Housing Authority uses, and it lists really serious violations, and I put that in July. Can you call that up? Yes. And there's a problem with that, that I want, I have received further, we've received further comments, and I want to lay the whole thing in front of you guys to discuss. Let's see where oh, this is the On

[Cameron Wood (Office of Legislative Counsel)]: page 10 of seven seventy two, it's going to be on page 15 of that side by side, the other side of the bridge, that would be the gray side by side.

[Deborah "Debbie" Dolgin (Member)]: And I'm going to pull it

[Cameron Wood (Office of Legislative Counsel)]: up while I'm screening. Did you read more notes?

[Mary E. Howard (Clerk)]: Yeah. I can't read it. Don't do that.

[Marc Mihaly (Chair)]: Okay, so So there are two issues before you. One is what do you think of the The intention of the list is the kind of stuff where just common sense tells you this is not a good thing. You know? You really can't have this in a unit. However, here's the problem that was various people mentioned about this list. A number of landlords have testified or told us that the first time they hear about these problems is during eviction. Know, tenants don't inform them. And of course, we're not aiming at the landlord who is We don't want to include This is a classic case of not wanting to overcompensate. We want to give an eviction defense when we have a landlord who is really doing a bad job of providing a So, capital to we want and also, we don't want the tenant just sort of coming up with some minor code violation during eviction and using it as an eviction defense and causing a much lengthier proceeding. So, the simplest proposal that I got was that it has to be in the form of an actual code violation, what's the word, you know, a ticket that there has, what is it?

[Ashley Bartley (Vice Chair)]: A citation?

[Marc Mihaly (Chair)]: A citation that has been uncorrected prior to the eviction. Mhmm.

[Mary E. Howard (Clerk)]: Right. Prior to eviction or prior to isn't this the person the renter wouldn't be paying their rent because these things are also not

[Marc Mihaly (Chair)]: That might be. But I'm saying that, remember, this is only this whole section only deals with after an eviction notice, eviction case has been filed. It's not changing the warranty of habitability, it's not changing the habitability section, All it deals with is, it's an affirmative defense in the case of an eviction For not paying not paying rent. For there, I think it should say that it has to be an uncured citation, where the citation occurred as of the date of the eviction.

[Mary E. Howard (Clerk)]: That landlord's got to know that there's problems.

[Marc Mihaly (Chair)]: Yeah. Because what I heard from landlords counsel is that if there's an eviction notice, you know Not eviction, excuse me. If there's I keep forgetting the word, a citation. No, from the From, you know. Right, yeah, yeah.

[Cameron Wood (Office of Legislative Counsel)]: Right.

[Deborah "Debbie" Dolgin (Member)]: So what are we

[Marc Mihaly (Chair)]: From asking how people feel about it.

[Ashley Bartley (Vice Chair)]: So the only change is

[Cameron Wood (Office of Legislative Counsel)]: I would add that there has to be an unresolved citation.

[Marc Mihaly (Chair)]: An uncured or unresolved citation. Yeah. I don't know. Yeah.

[Cameron Wood (Office of Legislative Counsel)]: I mean, that makes sense knowing Makes sense. That would be frustrating to show up and be like, well, this is the first time I've heard about that. So Apparently, that's rather common. While you're reading I can comment and looking at the rules at least as far as I can tell at this point. For habitability.

[Ashley Bartley (Vice Chair)]: Oh yes, six.

[Marc Mihaly (Chair)]: Division of Fire Safety except

[Cameron Wood (Office of Legislative Counsel)]: that every dwelling unit shall contain within the unit space to store, prepare, and serve foods in a sanitary manner, including the presence of a kitchen sink. It doesn't say that there shall be a right.

[Ashley Bartley (Vice Chair)]: Right, because you could have

[Mary E. Howard (Clerk)]: a hot plate too, people have those.

[Cameron Wood (Office of Legislative Counsel)]: So that is what it says, particularly it's sanitation and kitchen facilities. That's good.

[Marc Mihaly (Chair)]: Mr. Chair, you have a question?

[Mary E. Howard (Clerk)]: Thank you. Yes. Are we trying to, that's the existing law?

[Marc Mihaly (Chair)]: No, think that's seven seventy two.

[Mary E. Howard (Clerk)]: Okay, so we attempting

[Emilie Krasnow (Ranking Member)]: Underlining means it's proposed. Right.

[Marc Mihaly (Chair)]: Yeah, I'm just trying to see where everybody is on this.

[Ashley Bartley (Vice Chair)]: I think it's good. I think it's good.

[Marc Mihaly (Chair)]: With the change that it

[Mary E. Howard (Clerk)]: Yes. The citation.

[Marc Mihaly (Chair)]: Okay.

[Mary E. Howard (Clerk)]: But I just have a question about the content.

[Cameron Wood (Office of Legislative Counsel)]: Yeah. Are we gonna change the there

[Mary E. Howard (Clerk)]: something What? Is there something that can say, as an example, if there's mold, one sentence that covers something that would be hazard hazardous? If somebody It says?

[Marc Mihaly (Chair)]: I thought there was a catchall.

[Emilie Krasnow (Ranking Member)]: Involves all these things. Yeah.

[Ashley Bartley (Vice Chair)]: Yeah. Mold would be a health and safety code violation.

[Cameron Wood (Office of Legislative Counsel)]: Yeah. It's also if you dig in. I bet 45% of our homes have mold if you really technically

[Mary E. Howard (Clerk)]: think it's that's why we like black mold. Yeah. They could be a new

[Deborah "Debbie" Dolgin (Member)]: the finishes. Yeah. Shades require a band. It's like a exhaust fan in the bathroom. Yeah. Smoke Oh, well, yeah, smoke detectors are just the only ones people talk about mold.

[Mary E. Howard (Clerk)]: So that health and safety color is what's like breadboard's being, dangerous or mold or whatever.

[Cameron Wood (Office of Legislative Counsel)]: One question on this list.

[Marc Mihaly (Chair)]: H. How on

[Cameron Wood (Office of Legislative Counsel)]: earth do you regulate that? Like fixtures, like you built in a built in cabinet? By the time you might have to roll something out of the way. In my understanding, your fire safety code requires certain egress from dwelling rooms within But it would just have to be that the landlord didn't put it there. That's how I agree. So there is a section here that says that, so right here too, the tenant cannot use this if it is their deliberate or negligent.

[Marc Mihaly (Chair)]: Okay, so if I put a question away,

[Cameron Wood (Office of Legislative Counsel)]: Okay, right. If the tenant builds every day or There

[Marc Mihaly (Chair)]: you go.

[Cameron Wood (Office of Legislative Counsel)]: So that's

[Marc Mihaly (Chair)]: a very

[Emilie Krasnow (Ranking Member)]: think you have to your dog

[Marc Mihaly (Chair)]: to stay there. And to a sub paragraph of one just where it says, Serious health and code safety violation that exists as of the time.

[Cameron Wood (Office of Legislative Counsel)]: Yeah, okay. Thank you for that.

[Marc Mihaly (Chair)]: Any other questions on this section that people can think of right now? I'm going to raise a couple of other issues that I don't think are difficult. There's a $1,000,000 appropriation for the down payment assistance. The Vermont State Housing Authority down payment assistance program, remember that one was funded with a $2,500,000 one and is pretty much out of money. Kathleen Burrows to this. So, we're proposing a $1,000,000 appropriation. Whether that's there or not, I don't know. In other words, whether we'll get

[Deborah "Debbie" Dolgin (Member)]: the Whether one night

[Ashley Bartley (Vice Chair)]: we'll get it.

[Marc Mihaly (Chair)]: Whether we'll get it or not, but I'm proposing that we ask Yes, sure. That program is often, as I understand it, am I right counsel, that's a program that's initiated by landlords. Is that the program? I think the landlord and the teacher have to want it. It's not like yeah.

[Cameron Wood (Office of Legislative Counsel)]: I think it can be initiated by either, but they both have to sign on

[Marc Mihaly (Chair)]: to it. They both have to sign.

[Cameron Wood (Office of Legislative Counsel)]: Think it's started out, like, one

[Marc Mihaly (Chair)]: way or the other. Yeah. And I also included in seven seventy two a landlord and tenant education program that talks about rights, responsibilities, and remedies. The reason I did this is that, well, first of all, I'm looking for anything that prevents eviction notices at all, and CBOEO did agree, they do already an education program very much like this, they do programs for landlords and tenants, and this asks for $200,000 to do it. They tried, by the way, to get a grant, a federal grant, and they got it, but it was conditioned on their assert, making all kinds of assertions that you can imagine that they were, and so they didn't feel they could do that, but it's a different program anyway. So this is just to try to educate people on the theory that both small landlords and tenants would benefit from this. Yes? I just want to make a comment.

[Deborah "Debbie" Dolgin (Member)]: Yes. That spades reality up in Port Aire Valley, he actually goes into the schools, and teaches a class on how to make a lease, how to be a good tenant, what a good landlord looks like. No charge. Excellent.

[Emilie Krasnow (Ranking Member)]: What is that?

[Marc Mihaly (Chair)]: That's a realtor, the realtor agent that does that. One I want to mention, CBOEO also testified, I can't remember who it was, I think it was them, They testified that they would like to see an appropriation for cap agencies to have rental advice, rental advisors, rental, remember? I'm just bringing this up, I gotta get language to put in front of you, and I think they asked for $600,000 for each of them to have a tenant, educator, ombudsman, etc.

[Ashley Bartley (Vice Chair)]: A full time person for each cap, for rental advisor, almost a million dollars?

[Marc Mihaly (Chair)]: It was $600,000 Is

[Mary E. Howard (Clerk)]: this community action or CVOEO?

[Marc Mihaly (Chair)]: It was community action. The CBOEO may have I'm sorry, I don't remember who advocated for it. I think it may have been CBOEO, but it would be for each of the CAP agencies.

[Deborah "Debbie" Dolgin (Member)]: Okay.

[Marc Mihaly (Chair)]: And I have had a number of people My first reaction was, what a great idea. Anything that keeps people out of the courts, out of an eviction situation is great. Everybody should like it. But my first reaction was, Yeah, like, where are we going to come to the $600,000 And what I was told was, Put it in there and see. And so, I think, you know, just see, if it's a good idea, put it in there, if it's a good idea. I want to just get a temperature check, I will try to find language, the theory being that something like this, both tenants and landlords should like, it works to keep people current on their lease, educate them on financial literacy, help people understand what, you know, help. I assume part of the role of these people is to do what legal aid attorneys otherwise do at best, but in a much more, what do you call it, an environment that's less confrontational. One of the things that you heard testimony about was, I keep forgetting the term, Restorative justice. And restorative justice is incredibly efficient, I mean, for whatever it costs, it saves so much more, but that's after, you're talking about when it's already way down the road, This would be earlier. So I kinda like it. And I'm just asking at this point, is it okay with people if I get language and find out more? And

[Cameron Wood (Office of Legislative Counsel)]: I mean, you can certainly do that. Yes.

[Ashley Bartley (Vice Chair)]: Yeah. And I I think let

[Mary E. Howard (Clerk)]: me know oh, go ahead. Let me

[Ashley Bartley (Vice Chair)]: know how the committee feels about this. I think, yes, certainly get language. But I'd like to, at some point, we keep separate, like separately adding in the different fiscal parts to see what whole thing looks like before we rank and agree to what fiscal, I know that there's some people who are really fiscally minded in here, so I want to be cognizant that we look at those things as a package so that seeing like ranking what might be more efficient of fund, right, Joe, like something like that. Right, Prioritizing the fiscal ask in the bill. If it were up to Emilie Krasnow, I'd load it up with everything anyone asked for because I am sure it'd be effective, but I am also realizing that in these lean times,

[Mary E. Howard (Clerk)]: it can't be acting Right. Like

[Marc Mihaly (Chair)]: At the moment, right now, it's all on the last page. But that's not in there. What it is at the moment is a 100,000 to the state treasurer to implement the positive rental payment credit wording.

[Cameron Wood (Office of Legislative Counsel)]: I think we could use that money elsewhere. K.

[Marc Mihaly (Chair)]: 1,200,000.0 for the Department of Housing Community for for 1,000,000 for the Rental Arriers Assistance Fund, which counsel is the wrong name, apparently. Kathleen sent us an email I forwarded to you that changes the title, and then 200,000 for the other reports.

[Ashley Bartley (Vice Chair)]: That's it?

[Marc Mihaly (Chair)]: That's it.

[Ashley Bartley (Vice Chair)]: So how much is that, almost a million?

[Marc Mihaly (Chair)]: No, it's 0.3 Total. Yeah. I

[Cameron Wood (Office of Legislative Counsel)]: may have misspoke when I said that. I don't think it's necessarily best to put it elsewhere. I think it's best to have an honest credit report. K. As opposed to, as I read it, a only positives. I thought that it's not

[Marc Mihaly (Chair)]: This was a Actually, this is not What he's referring to is My memory is that there was a credit reporting program, And in the Senate

[Emilie Krasnow (Ranking Member)]: It's not just a credit reporting, it's about credit It's building your credit history.

[Marc Mihaly (Chair)]: Building your credit history.

[Emilie Krasnow (Ranking Member)]: It's on you to build it.

[Marc Mihaly (Chair)]: Just to throw out what happened, what happened was, the way it's designed is, if you pay, it's reported. Positive. Positive. If you don't pay, it's not reported, but you're out of the program. That went to the Senate, and in the Senate, a couple of members of the Senate Committee on everything, you know, our sister committee, were really worried about the fact that it bilateral. They wanted both the positive and the negative reported. Okay? But then it was pointed out that the negative was you're kicked out of the program and they were okay with that. Yes. So it came out, and then it got lost in our housing bill, literally lost, because remember, they had the House bill, we had the Senate bill, We made the senate bill the vehicle and somehow in there, it just got lost.

[Ashley Bartley (Vice Chair)]: And they want us to act.

[Marc Mihaly (Chair)]: Yeah. Well

[Mary E. Howard (Clerk)]: You think?

[Marc Mihaly (Chair)]: So I put it back in. I I'm just I'm not telling you it's No. No.

[Cameron Wood (Office of Legislative Counsel)]: I I am a thousand percent on board with getting rent included as a positive Yeah. On there. But I'm also a realist who's like, once you're out of this program, the credit reporting You're out. Doesn't work that way.

[Marc Mihaly (Chair)]: Yeah. Right.

[Cameron Wood (Office of Legislative Counsel)]: They don't not report the bad stuff and kick you out of credit reporting because you missed a payment.

[Marc Mihaly (Chair)]: I am under the impression, does somebody know that ordinarily, payment doesn't make it into credit? That's the reason it has to be funded is that you have to do you have to pay the credit agencies to do it?

[Deborah "Debbie" Dolgin (Member)]: I don't know what.

[Marc Mihaly (Chair)]: I don't know. Okay. I'm sorry. I don't know.

[Deborah "Debbie" Dolgin (Member)]: Let's find a little more.

[Ashley Bartley (Vice Chair)]: Let's find a little more about this one, but it's not like a no.

[Marc Mihaly (Chair)]: Yeah. No, no, no. I understand. So

[Emilie Krasnow (Ranking Member)]: my understanding was that, like, some of the trusts already the housing authorities are trying to implement this or do implement this. Like, I know Yeah. Chris Donnie just is that so we're talking about that, but

[Marc Mihaly (Chair)]: Doing that statewide statewide, statewide, of treasurer's office, yeah?

[Cameron Wood (Office of Legislative Counsel)]: So a few years ago, General Assembly asked the state treasurer to do a report into this to try to expand on it. So they came back with the report recommending this kind of program. And it would be basically at least landlords Oh, Okay. No less than 100 tenants to try to do the findings so they could come back to you with results and possible mechanisms to then make it a state requirement.

[Emilie Krasnow (Ranking Member)]: I bet the lenders would love that, too.

[Cameron Wood (Office of Legislative Counsel)]: Think it's a good thing for everybody to

[Ashley Bartley (Vice Chair)]: think No, like it.

[Marc Mihaly (Chair)]: Okay, so then, there's another issue or question. The issue is confidentiality of eviction records. And this issue was taken up by the judiciary committee, and they worked out at great length a bill. Bill had input, lots of people's input, but for reasons that I don't know, and I will find out. It was never taken up. I don't think the committee even got through it. I think it just didn't get through it. The issue The approach of that is that the eviction remains confidential until judgment. If there's judgment, then the confidentiality is lifted. So, if someone is successfully evicted, public, the agencies can pick it up, etcetera. Here are the criticisms that I've heard on both sides. One criticism on the landlord side is I wanna know right away. I don't want to know only if the eviction was successful, just want to know if one was filed. The tenant side is exactly. The problem is that there are lots of situations where tenants have two we've heard two things. One is, there's lots of situations where there's a property manager, it's a big property manager, and if your rent is a day late, they file a notice and notice, and then if it's uncured, an eviction, and then you cure it and it goes away and everything's fine, but that's on your record. And if a landlord is faced, well, no, before I get to that. Another was, we had one person in here testifying that, remember we had a tenant describing a situation where there never was even an eviction action filed. It was, what was it, a late payment or

[Cameron Wood (Office of Legislative Counsel)]: Somebody, an organization was covering their rent and

[Marc Mihaly (Chair)]: FAA said, no. Yeah, and all of a sudden it was on their record. And they're pointing out that in a tough market, if the landlord has got two different or more tenants, they're just not going to consider tenants who have an eviction reported. So this bill says it's gotta be a serious eviction where it actually happens. And that's I've now said everything I know about this issue.

[Cameron Wood (Office of Legislative Counsel)]: Yes. Not just to your all, I did not include any of that language or sections side by side because it was you're already in two pages on the side.

[Deborah "Debbie" Dolgin (Member)]: We're ready.

[Marc Mihaly (Chair)]: Yeah. It's a page There's quite a few sections. Quite a few sections. A long part of the bill because it was worth all the quirks and issues were worked out. What page is it on? It's Yeah, several pages of the bill.

[Cameron Wood (Office of Legislative Counsel)]: It's on page 18 and goes through page the bottom of page 22. Mr. Chair, you have a question.

[Deborah "Debbie" Dolgin (Member)]: I was just going to point out that that first notice when you do a termination notice for whatever reason, that's not reported in the court. It's reported once you file for

[Marc Mihaly (Chair)]: your complaint. Right. The assertion, and I'm not sure what to do about the assertion that sometimes credit, very early notices are just don't know enough to address that problem.

[Cameron Wood (Office of Legislative Counsel)]: But

[Marc Mihaly (Chair)]: this is, just to be clear, this is taken from the effort that judiciary put in, and it really goes through every wrinkle about how you maintain confidentiality and all of that, and then the confidentiality is lifted. So, I wanted to know, at the moment, that's fully in the draft, how do you go about leaving that in the draft?

[Ashley Bartley (Vice Chair)]: Why don't you like it?

[Deborah "Debbie" Dolgin (Member)]: Probably because it's court record, and I mean you can find out that things got worked out and that's a positive, I see that as a positive thing. But, is there a but? Yeah, I'm not saying a but.

[Mary E. Howard (Clerk)]: Yes. I think it's solid. One of the things, I don't know than anybody else, I paid a lot rent, it doesn't come out of the bank automatically until the fourth, so I didn't even know that it could be one day late, and if for some reason, and I was in the hospital for three days right around rent time, what if I didn't use automatic withdrawal? Then my lot ramp would be late, no fault of my own, situations happen. So it would be different if it goes to court and I'm found liable, then yes, it should be on my record.

[Marc Mihaly (Chair)]: Well, I mean, Debbie's made the point that there is a certain value to, from her perspective as a landlord, to knowing that a problem was resolved positively. The only thing I can say there is that I think a tenant can explain that to a landlord, how do people feel about, I mean, I can see Joe very carefully reading through this and it's rather long. I'm gonna, because we have other things to talk about, I'm gonna suggest that in the current draft, we leave it in subject to people spending the time to read it and think about it.

[Emilie Krasnow (Ranking Member)]: Fair?

[Cameron Wood (Office of Legislative Counsel)]: I have at least a minimum recommendation, but I'm happy to take that to the judiciary team if you feel that it is more appropriate than them.

[Marc Mihaly (Chair)]: Oh, I think you should talk to the judiciary team about it. Not not my team, the judiciary committee. Oh, the judiciary committee at the moment may go with a flyby depending on our discussions with judge Saudia.

[Cameron Wood (Office of Legislative Counsel)]: So just briefly, and I'm not gonna walk through the whole section of your time, as

[Marc Mihaly (Chair)]: you said. Okay, no, no, happy answer

[Cameron Wood (Office of Legislative Counsel)]: questions if people have them, but I will just comment, one of the things here doesn't fully make sense to me. This is, so the record becomes confidential at the time it's filed. And then if there is a finding that, so under this 4,873, if the court in an objectment case issues a final judgment after the hearing in favor of the landlord because the objectments were nonpayment of limits, line 17 moving down, or breach of the rental agreement, the court shall remove the confidentiality of the object record after thirty days unless the court orders continued confidentiality pursuant to subsection B. So it's confidential. Landlord wins. It's because of nonpayment or breach of terms, criminal activity, whatever. It loses its confidential status unless it continues to be confidential because of b, which is the court shall order on lines one moving down. Court orders the ejecting record will remain confidential if the parties so stipulate or upon the tenant showing a good cause within six months. Showing that the defendant meets any of the following conditions is deemed good cause. A, the person is a victim of abuse. Okay, makes sense? The defendant is a person with a disability as that term is defined. Okay, that makes sense. Not from a policy perspective, from a legal perspective, that makes sense. C, the defendant is a member of a protected class. A protected class includes sex and gender identity. So in theory, the way I read that is everyone. I think that's overbroad. So that's my own opinion.

[Marc Mihaly (Chair)]: I take that. I'm okay with taking that out. I mean, it's just too broad exception. I mean, it's just like Unless there's some reason, they'd have to show that there's a they'd have to convince the judge that there's a reason that relates that it would they should do it. I mean, I just don't wanna make it automatic. This

[Cameron Wood (Office of Legislative Counsel)]: is saying that it would automatically be good cause if you're one of these, and that's what I'm saying. You're a victim of abuse. I can understand the concept of putting that there. You have a disability, like I can understand the rationale behind doing that but just saying you're a member of a protected class, again, discrimination based on sex is a protected class. So it just doesn't fit to me. It doesn't make sense.

[Marc Mihaly (Chair)]: And this doesn't even have to say it's discrimination. It's just you're a member of that class. I think that's overbrought.

[Cameron Wood (Office of Legislative Counsel)]: And for those following along, I'm talking about just this section here.

[Marc Mihaly (Chair)]: I will leave

[Ashley Bartley (Vice Chair)]: Where did that come from?

[Marc Mihaly (Chair)]: I don't know.

[Ashley Bartley (Vice Chair)]: Cameron, do you remember where that came from? The bill

[Cameron Wood (Office of Legislative Counsel)]: or It came from the sponsor. I'm not gonna share anything. I'll see one or two.

[Ashley Bartley (Vice Chair)]: Oh, the sponsor.

[Marc Mihaly (Chair)]: That's from your

[Cameron Wood (Office of Legislative Counsel)]: bill.

[Marc Mihaly (Chair)]: Yeah. It's just this is all seven separate. This is non existing law. Right, right.

[Deborah "Debbie" Dolgin (Member)]: I didn't know if it

[Ashley Bartley (Vice Chair)]: was from one of the other classes.

[Marc Mihaly (Chair)]: No, no. It's just

[Ashley Bartley (Vice Chair)]: This was in your bill. Is. It's mostly yours.

[Marc Mihaly (Chair)]: Yeah. What I did was I just took the stuff that was from a pro from judiciary and legal aid and got some work on it and put it in here. Yeah?

[Cameron Wood (Office of Legislative Counsel)]: Got it.

[Marc Mihaly (Chair)]: Just

[Deborah "Debbie" Dolgin (Member)]: trying to understand this. So that when you go over to Torthouse and they have posted, like, what what's going on today kind of thing. Are you saying anything that would be

[Marc Mihaly (Chair)]: the addition process, like, they they wouldn't show? Except the except the parties. The parties can see it. I don't know how that what what does it say?

[Deborah "Debbie" Dolgin (Member)]: Well, can go to the courthouse and

[Marc Mihaly (Chair)]: they put

[Deborah "Debbie" Dolgin (Member)]: a sheet of The the

[Cameron Wood (Office of Legislative Counsel)]: text edition

[Deborah "Debbie" Dolgin (Member)]: It's also online. The hearings. Yeah, so it just wouldn't show up there?

[Cameron Wood (Office of Legislative Counsel)]: Yeah, the definition says in this draft language that a confidential record does not limit public access to court hearings. So since all of Jackman court hearings shall remain open to the public, names of the parties shall not be listed on the court calendar. I don't know how those two things would match up.

[Marc Mihaly (Chair)]: If you're saying you can't

[Cameron Wood (Office of Legislative Counsel)]: list it on the calendar, but it's open to the public.

[Ashley Bartley (Vice Chair)]: I'd like a judiciary interpretation of that. Yeah, because it's my understanding, because I'm a sleuth that I look online and I look at court things just to see what's up. If anybody

[Mary E. Howard (Clerk)]: see, would say it.

[Ashley Bartley (Vice Chair)]: Like, what's up. Yeah. So I'm struggling to understand, like, how this it seems kind of like it would and wouldn't show up.

[Cameron Wood (Office of Legislative Counsel)]: I don't know

[Mary E. Howard (Clerk)]: how to Right.

[Deborah "Debbie" Dolgin (Member)]: We should figure that out.

[Marc Mihaly (Chair)]: Yeah. We should figure that out. Has the judiciary team looked at this in your office?

[Cameron Wood (Office of Legislative Counsel)]: They have. Yes.

[Marc Mihaly (Chair)]: Could you try to at least get a little clarity as to how this functions in a normal courthouse? Is that fair? You and I

[Cameron Wood (Office of Legislative Counsel)]: can talk about it, yes. Unless you want me to be open here.

[Ashley Bartley (Vice Chair)]: We should talk about it, or you could talk about it. Let me talk about

[Marc Mihaly (Chair)]: it with you, and I think we wanna try to get I know. I I think these are very legitimate questions, and let's find out how it works. I don't wanna run over to judiciary. If they're willing to do a flyby, let them

[Mary E. Howard (Clerk)]: I

[Marc Mihaly (Chair)]: don't want to go there just for this. We can just get a better sense of

[Ashley Bartley (Vice Chair)]: how can work out in a different way. So you can meet with the lead sponsor.

[Marc Mihaly (Chair)]: Wait a minute here, education, right to purchase, there was one other

[Cameron Wood (Office of Legislative Counsel)]: You wanted to talk about security deposits? We

[Marc Mihaly (Chair)]: security talked deposits. I think let me just check. There was something another easy one before we got to something really

[Ashley Bartley (Vice Chair)]: These are the easy ones?

[Marc Mihaly (Chair)]: Yeah. These are the easy ones. Trespass.

[Ashley Bartley (Vice Chair)]: Oh yeah, I'm very interested in this subject.

[Marc Mihaly (Chair)]: Okay, I am going to introduce this subject by describing situations And I would like help from those who are in the middle. There are different situations. It's not one problem. It's several problems. You care about it, but you're leaving.

[Mary E. Howard (Clerk)]: I know I'm asking you a question. Okay. Well, I should ask

[Ashley Bartley (Vice Chair)]: the body. Did Rutland, Nashville, Rutland in here?

[Marc Mihaly (Chair)]: No, it's not coming here. All that I said was don't bother. Okay. Just if we want it, we'll just take the language.

[Ashley Bartley (Vice Chair)]: Because I like that

[Marc Mihaly (Chair)]: language too. Okay. I'm gonna describe the situation. Sorry. Situation one. Each of these situations occurs. It's these are real problems. A tenant is causing is is undertaking activity which is a danger or to the health and safety of other tenants or the landlord, etc. We all know what those could be. The tenant is successfully removed, whether they just leave or whether they are evicted, they are removed. They turn around and come back and they have someone in another unit and they go in the other unit. Okay? And that's one situation. You with me? So you look puzzled, Mary. Right?

[Deborah "Debbie" Dolgin (Member)]: No. I'm listening. Okay.

[Marc Mihaly (Chair)]: And to put a a gloss on it, we have a situation which is apparently, not infrequent, where the tenant who is evicted is a drug dealer. The drug dealer goes out, and when the drug dealer finds another tenant and basically forces them, either because the other tenant, because of violence or because the other tenant is an addict, and they Prey. They prey

[Deborah "Debbie" Dolgin (Member)]: on them.

[Marc Mihaly (Chair)]: Yeah. And there they are all over again. That's situation one. Situation two is which Ian's bill is about, is a situation where the drug dealer, to use that example, but it doesn't have to be that, was never a tenant. They're just out there in the world, same scene, they have some tenant inside, either as a buddy, or more often than not, is not a buddy, but is intimidated or preyed upon, and they go into their unit, but they were never a tenant.

[Emilie Krasnow (Ranking Member)]: Okay. So, we're talking about page 17 Okay, right now, section 30

[Marc Mihaly (Chair)]: so now having laid out these two situations,

[Deborah "Debbie" Dolgin (Member)]: on page 17 of

[Marc Mihaly (Chair)]: seven seventy two, we There's an unlawful trespass law, and I'm just going to characterize this quickly now, and then let counsel take us through it. We added that if a person enters or remains on any land subject to an order against trespass, regardless of whether they have the consent of the person in lawful possession, the land or place, that unlawful respite action will lie. Whether this covers the second section, the second problem, or not, I don't know, but Ian introduced it. There is a case, the Dixon case, I think, in which I've tried to read the case. It's a weird fact situation. But basically, it seems to stand for the court's view that under current law, you couldn't deal with the second problem. Right. If they've in other words, it's one thing under for a landlord having successfully ejected someone to say, oh, you can't just come back. But it's another thing if they're just some outside person coming in and forcing their way in. The Dixon case said you can't do it. The landlord can't issue a trespass.

[Emilie Krasnow (Ranking Member)]: Against the guest. Right.

[Marc Mihaly (Chair)]: Against the guest.

[Ashley Bartley (Vice Chair)]: We can have the state's attorney or if you want testimony or folks just like it, but I this is the thing that happened.

[Marc Mihaly (Chair)]: And then Ian introduced the bill that says, no. You can't. We're overruling Dixon, and we're saying you can. And we have the language from Ian's bill which addresses the second situation. I am now giving you the non lawyers despite the fact that I'm a recovering lawyer. I'm giving you the non lawyers perspective, and I now ask counsel to please correct me or take us through this. And we could we have the option of having this language, we have the option of no language, we have the option of this language, plus Ian Goodnow's language.

[Cameron Wood (Office of Legislative Counsel)]: So, unfortunately, I had material about this issue when I displaced it. It's in my office, it's just not with I think, Mr. Fair, that you described the issue, if you will, sufficiently. Keep in mind, we all have constitutional rights to associate with individuals that we choose to associate with. And so the issue is I understand I

[Marc Mihaly (Chair)]: guess that's the counsel. I have that. I have Dixon case with

[Cameron Wood (Office of Legislative Counsel)]: me and some notes, etcetera. No, but I mean,

[Marc Mihaly (Chair)]: do you have seven twenty eight? Yes, sir.

[Cameron Wood (Office of Legislative Counsel)]: Okay, and I'll pull it up here just a second. So my recollection of the Dixon case was that if an individual is voluntarily asked or authorized to come on to someone's property, keep in mind you're the tenant that you have lawful possession of that property and you can invite and exclude who you would like to because are, that is your property at that point, it's your home, you have the same rights as other people do in their single family residence building. If you recall, you can even exclude the landlord. There's a specific section of the statute about when the landlord can access the property and in what circumstances. So how do you deal with the circumstance where it's an apartment building and you have to walk through a common area to get to someone's individual residence. So that's really what the Dixon case is about. An individual had some sort of note or was being charged with a trespass because the individual was in the common areas going to someone's building or dwelling that they had been invited to. Court said you can't, under the current statute, you couldn't essentially hold or prosecute that individual for walking through a common area to get to a location that they had been invited to. And so I was requested by Mr. Chair, sponsor of this bill, work to try to come up with something that would And Ian

[Marc Mihaly (Chair)]: authorized counsel, remember, counsel is not, when he's representing individual bill proponents, he's not authorized to talk to anybody else unless the bill proponent does. So Ian has authorized him

[Cameron Wood (Office of Legislative Counsel)]: to And talk to so representative Goodnow had requested a similar bill that was drafted by another attorney in our office. So you have two versions of this that you could look at. So I'll just walk through both of them real quick. I'll start with seven seventy two. So this has after, so this is You guys are going

[Marc Mihaly (Chair)]: to become experts now in

[Cameron Wood (Office of Legislative Counsel)]: trespass. Ready? This 4,869 would go in the section associated with the objectment chapter, so we're still in objectment for a second. After execution of the writ of possession, so the landlord gets the writ from the judge giving them lawful possession, the plaintiff may issue the defendant an order against trespass for the entire premise subject to the ejectment action. The order shall be effective and may be enforced with criminal penalties in accordance with the trespass section, regardless of whether the defendant has been invited onto the property by another resident.

[Marc Mihaly (Chair)]: Now wait, that's the first situation. Right. That's someone who's a tenant, has been successfully ejected, and they come back. This says you can get an order prohibiting that. So then you

[Cameron Wood (Office of Legislative Counsel)]: go to the trespass section itself.

[Marc Mihaly (Chair)]: Of the code, a completely This different

[Cameron Wood (Office of Legislative Counsel)]: is in title 13, this is a crime, this is in the title related to crime. So unlawful trespass, a person is in prison not more than three months, fine not more than 500 or both, if without legal authority of the consent of the person in lawful possession, the person enters or remains on any land or any place. And then I add a subdivision three here to say, if a person has been issued the order that we just reviewed, it shall be a violation if the person enters or remains on any land or in any place subject to the order against trespass regardless of whether the person has the consent. So it's just adding that two piece. You can give someone a trespass order if you get the check-in against them, and then adding into the trespass section that it's not a defense here if the individual has, if someone has invited you onto the property.

[Marc Mihaly (Chair)]: Okay, I'm gonna stop you for a section. So this is all about the first situation. This is all about a person who was a tenant, and all that what and what counsel has done is make it clear by the additions that you can file an trespass action against them, and you can file it such that it's a violation for them to come anywhere in the place, not just their old apartment. And it doesn't matter whether they get the permission of some somebody. What it does not deal with is the second problem, which is someone who never was a tenant, but is coming on and doing bad things, possibly fraying on somebody there. That's in Ian's bill. Okay.

[Cameron Wood (Office of Legislative Counsel)]: So just pulling this up, this is the purpose of this so this is a purpose statement. So this is seven twenty eight. As a purpose statement, the purpose of this act is to overrule the court case in State v. Dixon and allow a landlord of a dwelling unit to obtain a new trespass order prohibiting a tenant's invitees or licensees from entering the dwelling unit's common areas if the invitee or licensee subject to the order has violated the terms of the lease agreement.

[Marc Mihaly (Chair)]: It's just The operative sections are interesting.

[Cameron Wood (Office of Legislative Counsel)]: So it's saying that if the individual invitee is violating the lease agreement, then the landlord can get a trespass order against that individual. So someone is coming onto the property and selling drugs out of your apartment. They've never been a tenant. You're inviting them on. Maybe I'm trying to pursue an ejectment action against you because of that. Maybe you are being preyed upon by someone else, so I don't want to evict you, I'm just trying to exclude this individual. And so then we're back into the title thirteen, three thousand seven hundred five, which is the unlawful trespass section. So you'll notice this doesn't have anything to do with the writ of possession and getting a trespass order when you get the writ. This is just unlawful trespass. It has the same lead in language as A, and I apologize, should have zoomed in there. It's the same lead in language as in 3,705, which is not new, but it adds this subsection G here, which is notwithstanding subsection A, for any provision of all the contrary, a landlord of a dwelling unit may cause to be served an order against trespass that prohibits a tenant's invitees or licensees from trespassing in the dwelling unit or any of the dwelling unit's common areas, if the tenant responsible for the invitee or licensee consents to the offer, the invitee or licensee subject to the order has violated the terms of the dwelling unit's lease agreements, or the invitee or licensee has violated a state or federal law while on premise of it could be any of those things. I'm the tenant. You keep coming onto my property, I don't want you on the property, landlord can get a trespass.

[Marc Mihaly (Chair)]: I could communicate secretly with the landlord and say I don't want this person here, And then they're authorized. So a landlord under this can

[Ashley Bartley (Vice Chair)]: I have to I have to go to ag for a minute? But if we do make a I hope to have the good to know language put in. And if folks would like testimony as well, I

[Mary E. Howard (Clerk)]: can tell you who wants to test.

[Marc Mihaly (Chair)]: Great. Okay.

[Ashley Bartley (Vice Chair)]: But that's my vote.

[Marc Mihaly (Chair)]: So notice this is or. If there's a This list. Every time you see a list, since you guys are all becoming lawyers, one of the things you should always remember when you see a list, is it or or is it and? So I have a question. Yes.

[Emilie Krasnow (Ranking Member)]: There's, I imagine that there's a whole procedure for successfully getting a judge to write a trespass, a no trespass order, right? Like you can't just say this is happening and you've been Not just

[Cameron Wood (Office of Legislative Counsel)]: my area of law.

[Marc Mihaly (Chair)]: You have to go to court, you have to ask the court for a trespass order, right?

[Deborah "Debbie" Dolgin (Member)]: We've never done that, but I thought it was through the town. The town police enforced trespass. They enforce it,

[Marc Mihaly (Chair)]: but I think you have to go to court to get a trespasser for it.

[Deborah "Debbie" Dolgin (Member)]: It's a criminal thing. I'll just say we've had both these

[Marc Mihaly (Chair)]: You've had both of those situations happen.

[Cameron Wood (Office of Legislative Counsel)]: I will give you an answer.

[Emilie Krasnow (Ranking Member)]: Oh, yeah, thank you.

[Cameron Wood (Office of Legislative Counsel)]: And so then it says, notwithstanding that, the individual who served the order against trespass has a limited right to appeal the order by bringing a small point to action against the landlord. The decision shall be final and is not subject to appeal. One thing I want to confirm with our legal or judiciary team is whether there should be a right to appeal. This one has a right to appeal. The one that I drafted up does not. Whether there needs to be one, I

[Marc Mihaly (Chair)]: will confirm that as well. Okay. And that could

[Cameron Wood (Office of Legislative Counsel)]: be a simple change. I mean, would just apply to both. If you're going include both, it would just apply

[Deborah "Debbie" Dolgin (Member)]: to both.

[Mary E. Howard (Clerk)]: Okay, yes. So in this situation, my girlfriend lives there, they have two different apartments, he moves out, he's the drug dealer, and he comes back to the apartment and she allows him in, he can that would be trespassing. Under b. Okay. In

[Marc Mihaly (Chair)]: other words, a, remember we're we have to be careful here, and this bill, I think, reflects being careful. People have a right to association. They have a right to have their friends in their unit, all that kind of stuff. And so we have to be aware of that. Although, v Dixon, am I right counsel, was not a constitutionally based, it was based on their reading of statutes. Correct. Okay, so we have to be careful, and so this is limited to three situations. One is where the tenant themselves says, I don't want this person in here, which is important. They could say that on the QT. The second is that invitee, the one who's coming in, is violating the terms of the lease agreement, you know, because they're doing something in violation of the lease. And the third is if they're violating state or federal law. So how do people feel about in the next draft of this thing if we just put this in here?

[Cameron Wood (Office of Legislative Counsel)]: I'm perfectly fine with it. I have witnessed the court reading the chatty brownie report myself.

[Deborah "Debbie" Dolgin (Member)]: Pressing that. Until then?

[Cameron Wood (Office of Legislative Counsel)]: Right. I did in the cafeteria.

[Marc Mihaly (Chair)]: Okay. Are you looking are you gonna tell us more about this?

[Cameron Wood (Office of Legislative Counsel)]: I was not intending to, no, sir, unless

[Marc Mihaly (Chair)]: You were talking to me? You don't have to put it in the lease. You just put in the lease that it's illegal to do this, this that it violates selling drugs or otherwise violating the law.

[Mary E. Howard (Clerk)]: It's at least it's a violation of the lease. But what if the tenant is not the one selling the drugs? It's the people that the tenant has allowed to stay with them.

[Marc Mihaly (Chair)]: It's that's what the the no bill is dealing with. Is that because

[Mary E. Howard (Clerk)]: there was a situation where this man let people into his apartment and finally and they held cameras to leave all that. And finally, she was given a no trespass and disappeared, he was a bit booped up, or supposed to be, well.

[Cameron Wood (Office of Legislative Counsel)]: And it's also, there is in statute 4,456, it's about tenant obligations. It states that the tenant is in a sub B. The tenant shall conduct himself or herself and require other persons on the premises with their consent to conduct themselves in a manner that will not disturb other tenants' peaceful enjoyment. And I would even argue, A, the tenant should not create or contribute to the noncompliance of the dwelling unit, and so I would argue if you're allowing someone to come onto your property who's been selling drugs, that you are violating that sanction by authorizing them to be there.

[Deborah "Debbie" Dolgin (Member)]: Debbie? Do you know I'm saying about having approved for a PD? Well, I mean

[Marc Mihaly (Chair)]: Under current law, if the lease has not expired and you want to evict someone for violating the lease terms, you have to prove it under current law. This $7.72 doesn't change the fact that you have to prove it, but it recognizes that you may be difficult to prove because of fear on the other part of the tenants. And it makes it easier by allowing you to do it by asserting in an affidavit under penalty of perjury that they're doing it, and then the burden of going forward shifts to them. If they come in, so you properly asked, well, what if they come in and say, no, didn't, and I've never done this, and those needles aren't mine, and I don't know where you're coming from, and all that. Then it's really up to the judge. If the judge feels like, yeah, like, that's nothing, he or she can just order them out right then. If the judge thinks that there's really a possibility that then they have to, under $7.72, they have to have a hearing within thirty days and just decide. It's not ideal, but it is the best that people could come up with that's better than what there is. Yes?

[Mary E. Howard (Clerk)]: Do we know when someone calls the police, I know they ask you for your name, if you have

[Deborah "Debbie" Dolgin (Member)]: a complaint, is that confidential, or they can let you It's interesting you raise that. Let me tell the committee about a request that's come in. People are talking to me

[Marc Mihaly (Chair)]: and writing, so I mean, I don't know if you've noticed, you've gotten a lot of letters, okay? There's a certain amount of interest. Yeah. Anybody notice that? Yes. Here was the request. Apparently, and this is counsel, I really don't know the law on this subject. The request had to do with what if someone dials 911 because of a problem? Are the recordings, when are the recordings of 911 confidential? Are they allowed to be used, and by whom? I don't know the answer to that, and I'll have to talk to the individual. I think the concern was, something might be said that could be used in an ejectment action, and it should be confidential, but could you just check to see what the law is on confidentiality, even before I bring that back? I don't know. Don't know.

[Mary E. Howard (Clerk)]: Because if that was confidential, it might make it more apt to More apt to call, yeah.

[Marc Mihaly (Chair)]: Don't know whether it's a big concern that, oh, I can't dial 911 because So, here's a fairly large issue. It's large in the sense that it is a difference between, substantial difference of, current law does not give tenants a particular right to purchase property when it's being put up for sale. So, in other words, I'm a landlord, I wanna sell the property, I just can put it on the market and sell it. Okay? 440, and correct me if I'm wrong, counsel, I think 440, and maybe 339. I think it's

[Cameron Wood (Office of Legislative Counsel)]: just 399.

[Marc Mihaly (Chair)]: 399. Not 40. Yeah. Really? It's just 399. Okay. 399 says no, there is a right of first refusal, etc, and it contains in it a lot of procedure, and I will tell you that if you decide that you want to allow this, you can't avoid the procedure. In other words, if you really are giving someone, it doesn't matter what the context, it's not just landlord tenant, you give anybody a right of first refusal, you have to say how long do they have to exercise that right, and then how long do they have to negotiate and raise money. Okay? And in the case of 03/3399 it's forty five days notice of sale, right? And forty five days to negotiate, if they say yes. In other words, let's say you want to put the building up for market. You can, but you cannot accept any offer. Right, you can't accept an offer for forty five days, you have to let the tenants get it together, and then if the tenants say, no, we're not interested, that's the end of it, you can sell it, but if they say we're interested, then you have to give them another forty five days to do it. I just wanna know, you that's not in July or any of the other.

[Cameron Wood (Office of Legislative Counsel)]: And I would just comment that it's currently there is a similar right to purchase for individuals who live in a mobile

[Marc Mihaly (Chair)]: home park. Mobile home park. Yeah, that's how This is modeled off of that. Yeah, this is how Gayle's organization exists because of that. Right. It's not nuts. Okay? These happen. The complaint against it, the the reason for it is to give tenants a right to do what it says. Argument against it is, landlords say it doesn't happen very often and it just means all sales are held up for forty five days and maybe even ninety.

[Cameron Wood (Office of Legislative Counsel)]: And I was just saying, just one clarification, there's the forty five day period where the residents would provide notice that they want to purchase, and then if they do provide notice, it's one hundred and twenty days that it has to

[Marc Mihaly (Chair)]: be held. Oh, okay. So it's longer, yeah. Which, by the way, I mean, you may decide, we don't want to do any of this. I am not advocating for this, I did not put it in July, but if you want to do it, I'm telling you, you have to allow the time, because if you really want to allow people to purchase something, you have to give them time to raise the money and put the deal together. Okay. You may feel that this is not something you wanna do at all because it's unduly burdens the transfer of property for a landlord, or you may. I didn't put it in July. Debbie?

[Deborah "Debbie" Dolgin (Member)]: I mean, we've never had this situation, but my feeling is if you're putting something on the market, they could purchase it off the market. I mean, they could do the same thing without doing first refusal. They could do what?

[Mary E. Howard (Clerk)]: Purchase it. Purchase what?

[Marc Mihaly (Chair)]: The property

[Deborah "Debbie" Dolgin (Member)]: that you're putting on the market.

[Marc Mihaly (Chair)]: Yeah, in other words, she's saying tenants can always purchase it. What a right of first refusal does is it constrains, in other words, yes, they could always purchase it, but the landlord could always say, I'm not selling tea. Or, they could write, they could say they can purchase it, but usually a right of refers to refusal has a process in it, because it has to allow people the time to get the other tenants to agree and raise the money, but it's, this is again something where there's nothing wrong with either, intrinsically wrong, it's simply making choices. If you really believe people should have a right of first refusal, generally speaking, to make it real as opposed to theoretical, you have to have a lot of time in there for them to write.

[Emilie Krasnow (Ranking Member)]: And a plan.

[Marc Mihaly (Chair)]: And a strategy. And all of that. And existing law in seven seventy two just doesn't bite off that. And nor does April. Right? Correct. K. Thoughts? I didn't put it at July, it's just not there. Mean, Debbie's right. There's nothing don't get me wrong. There's nothing preventing a consensual agreement between a landlord and a that's what happened And what? Defendant. Yeah, I mean, I hesitate to mention it, but there's this store in East Caledonia that you might have heard of, where we were a potential buyer and the landlord owned that building and the wanted to buy it and they you know, we wanted them to give us time to buy it and enter into and they wouldn't. And then everything was fine because they weren't doing anything, and then all of a sudden there was some other buyer out there, and we had to, like, scramble like crazy and come up we actually went to Northfield Savings and borrowed the money. Talk about going out on a limb. So

[Mary E. Howard (Clerk)]: But that's the situation. So, again, this is, like, recognizing

[Emilie Krasnow (Ranking Member)]: how tight the market is and recognizing that there are buyers out there that can pay cash and that the tenants, you know, that they're going to be in a uncertain situation, right? Because you don't know whether the buyers are going to keep renting to them or not. I think I I kind of like some kind of buffer, you know, of of either either grandfathering in some of the, you know, some of the leases for a certain amount of time or giving them some sort of time if they want to buy, recognizing their right to try to, protecting the tenants that are in that kind of situation a little bit. And I guess you could say that, oh, the landlord could have made so much more money by putting it out on the free market. But they can set a price and the tenants can say, yes or no, we don't, you know, we can't, we can't we can't pay it. And then once that time is over, it goes out to the free market. And then if by then the tenants have raised enough money, they can compete, you know, to bid on the property.

[Marc Mihaly (Chair)]: Seven seventy two, I realize, does contain some of that protection, in that it gives tenants a ninety day

[Deborah "Debbie" Dolgin (Member)]: notice of sale. Right. Sale.

[Emilie Krasnow (Ranking Member)]: Not the right of first refusal.

[Marc Mihaly (Chair)]: Not the right of first refusal.

[Mary E. Howard (Clerk)]: Yeah, how much time are you giving for that?

[Marc Mihaly (Chair)]: Ninety days. Oh, there's no right of first.

[Deborah "Debbie" Dolgin (Member)]: Okay.

[Marc Mihaly (Chair)]: They're just giving notice ninety days if landlord is rational and just as interested in money, if the tenants then have those ninety days to raise the money, but it's not a right of first refusal, and the right of first refusal, counsel tell me is there's no quantity in there. In other words, they have a right of first refusal, but if someone offers more, the landlord is free to say no, right?

[Cameron Wood (Office of Legislative Counsel)]: They may have to allow for a counter offer, but they're not required to reject a higher offer simply because you have the right to make the first offer.

[Marc Mihaly (Chair)]: Right, all it is is a right to make the offer, which one has anyway.

[Mary E. Howard (Clerk)]: Yeah, that's not what the right of

[Deborah "Debbie" Dolgin (Member)]: official suit would go, right? No, but there's no amount.

[Mary E. Howard (Clerk)]: So then how can it be, how can it have any validity if you don't have any framework?

[Marc Mihaly (Chair)]: Right, so, it is not complete. If I negotiate a right of first refusal, okay, if I actually negotiate it, not in a law, I will put a price and a time. This does not, the $4.03 $33.99 doesn't have that.

[Deborah "Debbie" Dolgin (Member)]: It doesn't? I don't think so. There's a lot

[Emilie Krasnow (Ranking Member)]: on the right of birth, you'll see that. Excellent increase. Tenant rights to purchase property. It starts on page eleven, twelve, thirteen, thirteen, 15. There's a lot in there.

[Cameron Wood (Office of Legislative Counsel)]: So it says that the owner shall, among other things, accept an offer from a tenant or nonprofit corporation if the offer equals or exceeds the appraised value of the property or is on substantially equivalent terms and conditions as the best reasonable offer from another third party.

[Emilie Krasnow (Ranking Member)]: So if they match somebody else's offers, it will prevent other people from putting in offers. But

[Cameron Wood (Office of Legislative Counsel)]: you shall accept an offer in that business?

[Marc Mihaly (Chair)]: Under the four forty under $3.33 99. Oh. If if

[Cameron Wood (Office of Legislative Counsel)]: I couldn't afford my house if I had to buy it at its current appraisal. Yeah. I'm just saying, like, I

[Marc Mihaly (Chair)]: But if anyway, how do people feel about this? I did not put any of this So

[Cameron Wood (Office of Legislative Counsel)]: you're saying account value versus the bank's appraisal.

[Marc Mihaly (Chair)]: No. It would be

[Cameron Wood (Office of Legislative Counsel)]: it also be a bank. It would be the bank's appraisal.

[Marc Mihaly (Chair)]: Yeah. And

[Emilie Krasnow (Ranking Member)]: it says if there's a matching if there's another offer, and it's saying they'd have to match another offer.

[Marc Mihaly (Chair)]: Let's say it's appraised at $500,000, or let's make it it's a multifamily building. Let's say it appraises at a million bucks. If the tenants come in and offer a million bucks, the landlord has to accept that even if someone else offers 1,100,000.0. Right? And I didn't put any of that in there. I didn't do it. I will now stop being attempting neutrality and be an advocate. I'll tell you why I didn't put it in. Generally speaking, I'm trying to avoid situations which are unlikely to materialize, but have the effect of hurting all the time. And I felt like it would be very rare that a collection of tenants could afford to buy a building. And that on the other hand, if we put in forty five days and how many? Hundred and twenty? Hundred and twenty after that. Yeah. We were really needing it. We were just putting a major burden

[Deborah "Debbie" Dolgin (Member)]: On sales.

[Marc Mihaly (Chair)]: On the sale if tenants thought I mean, basically, if there's five tenants in the place and one or two tenants well, I don't know. Is that defined what triggers that?

[Cameron Wood (Office of Legislative Counsel)]: Oh, I think it ends up having to be a majority.

[Marc Mihaly (Chair)]: Majority of the tenants. I mean, it doesn't take much to get people to say, sure. If you could say, listen, let us stay in here forty five more days, doesn't take a lot for people to just sign. It's not like they have to put money on the line. Then they have another hundred and twenty days to come up with the money. But I did put in $7.72 a ninety day notice, which means that there's ninety days to try to raise money and make an offer. But it's more consent. $7.72 relies on the consensual behavior of the landlord and the tenants. Three ninety nine is law. Well, we can park this while people think about it. We've done a lot today, and we have more coming, and we are now at 02:30, we're moving on to, right, 02:30, I can see people are sort of agitating on this. Is it 02:30? We're taking a break at 02:20, which we passed, and 02:30 we have

[Cameron Wood (Office of Legislative Counsel)]: Have a wonderful evening.

[Marc Mihaly (Chair)]: Yes, we're talking about the AFL CIO Investment Trust update. So, don't forget this, it's up again, and the other issue that I want to bring up, just so you know, is one or two of the bills have a right to counsel for all tenants, and 7726, five eight, 599, what's that? 688. 688 doesn't and seven seventy two doesn't. We'll deal with that when we get back to this. But we are pretty much, we are getting there with this bill. We're getting there. Okay? And I really appreciate everybody's attention, and I appreciate people's desire to try try to work it out. I'm hoping since we all agree that the current situation is bad, that we can come to an agreement which would be better, and then if we have to revisit it and make it even better later, we will. But I hope we don't just end up with the status quo since nobody seems to like it. I don't. Agreed. Alright. So, ladies and gentlemen, we are now moving on to initiatives, and we're off of the landlord tenant issue. Do we have your witness online? He's online. This is, I'll just announce the subject. JP, are you gonna introduce Yes. Kay, you wanna come take the chair? This is a very interesting development that JP has talked to me about before, and I was always curious about it because it's potential sorts of money in the housing arena, of which we do not have enough. And I'm sure it involves labor agreements or something, but nonetheless, it's a source of money, and I was always curious about it and never had time to research it myself. JP kindly said, well, I can arrange for a little testimony on the subject, and that's what this is. So JP, you wanna tell us your name for the record? And you say that Eric is online? He'll be online, yeah. Okay, great.

[JP Isabel (Executive Director, Vermont AFL-CIO)]: So my name is JP Isabel. I'm the executive director of the AFL CIO. I'm here today to talk about the AFL CIO Housing Trust, which is a separate entity from the National AFL, but obviously a partner of ours. Thank you to the chair, to the committee for your time. Eric is there, so I want to thank Eric as well for his time, his patience. This is something that our president, Larry Mokland, we've all met, actually brought to Senator Sanders a little over a year ago now. And it's something we've been working with his office on, the treasurer's office on and developers on to bring this investment to Vermont. The HIT invests in housing projects that are built with 100% union labor. As I said, we've been meeting with various stakeholders in the state, looking for the right project, looking for a partner to work together on this issue with. And I thought it'd be great to have you guys learn more about not only what we're doing with HIP, but what other states have been doing with HIP, creating funds that essentially create these revolving funds that you're able to access over and over again. And they provide subsidy to the housing that then makes it easier for the developer to build. And I handed out an op ed that was recently published that was written by Larry Mokwin and the building trades president, Matt Claffin, about two projects in Burlington where union labor was not selected. We bid for the projects, but we weren't selected outright. One of the projects is the Burlington Square project, which is the pit that's been there for a while now. And the other project was actually Burlington High School. With the Burlington Square project, the first tower went up and they had all sorts of issues. The general contractor was not happy with it. In came some union folks and the iron workers came in, completed the second tower ahead of schedule. And actually then they had to have the plumbers and pipe fitters come in to revamp all of the design in those buildings, given the issues with the first building. And then with the Burlington High School project, we all know that that's coming under budget and is ahead of schedule. And so those are examples that union labor is at work in Vermont. We know we have the labor. I understand that there is a labor shortage in Vermont, but we feel very strongly that our union partners can step up and come to the table to help us meet this crisis in Vermont. I know you guys have been doing a lot of work on housing and there's a lot more to be done and there's a lot of good momentum building. I think HIT can be a part of our solution here in Vermont to help build new housing, grow our economy and really create family sustaining jobs. So I'll turn it over to Eric to have him explain more about HIT and what they have done in New England and across the country.

[Marc Mihaly (Chair)]: I'll tell you what, Eric, why don't you just give us your name and then we'll introduce ourselves to you.

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: Wonderful. Thank you so much. Well, my name is Eric Foreman, Director of Housing Policy at the AFL CIO Housing Investment Trust.

[Marc Mihaly (Chair)]: Okay, Debbie. Oh, I'm sorry.

[Deborah "Debbie" Dolgin (Member)]: It's okay. I'm Debbie Dolgin. I represent St. Johnsbury, Concord and Kirby.

[Marc Mihaly (Chair)]: Hi, Tom Charlton, Athens, Chester, Drafton and Windham.

[Cameron Wood (Office of Legislative Counsel)]: Joe Parsons, Newbury, Chopsland, and Brock.

[Leonora Dodge (Member)]: Leonora Dodge, Essex Town, CFS Exjunction, hon.

[Marc Mihaly (Chair)]: And I'm Marc Mihaly. I represent Plainfield, Callis, and Marshfield, North Of Montpelier.

[Mary E. Howard (Clerk)]: Welcome. I'm Mary Howard, and I represent Rutland City District 6. Gayle Pezzo, Chittenden Twenty, Colchester. Welcome.

[Marc Mihaly (Chair)]: And Saudia LaMont is online, and she Saudia, you wanna introduce yourself briefly? I think she might have stepped away. Where are you, Eric? Where do

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: you live? I'm based in New York City. New York City.

[Marc Mihaly (Chair)]: This committee called Housing in General. It deals with the general, includes labor, and the interesting thing about the committee is that Vermont has what might be called an urban area in Burlington, although it's a small urban area as the station goes, and then it has areas like where I'm from that are sort of rural, and then it has extremely rural. And you've got a bit of everything in front of you here with this group. So take it away and tell us about this program.

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: Well, thank you so much, Mr. Chair, and thank you to everybody for the opportunity to be here today. It's truly an honor. I'm a big, I guess you could say, fan of the state of Vermont. Haven't spent as much time in Vermont as I'd liked. I'll take a risk and tell you my grandparents for a time lived in New Hampshire, and so it was always sad when I had to make a turn off to New Hampshire. Well, not sad for go to New Hampshire. Not to sad to see my grandparents, but, sad to not be able to spend more time in in Vermont. But I'm here to obviously share about the AFL CIO Housing Investment Trust, So let let me jump right in. I went ahead and wrote out some prepared remarks. So, I'll try to keep it lively and not read off the script and then I'll also share my my remarks after. So, you've got something for your files. So, I'll jump right in. So again, my name's Eric Forman, Director of Housing Policy for the AFL CIO Housing Investment Trust. The AFL CIO Housing Investment Trust is a $7,300,000,000 social impact mutual fund that invests union pension dollars in the construction of affordable housing built with 100% union labor. HIT is unusual as an investment fund in that we have our roots in the civil rights movement, specifically in the conversation in the mid 1960s between Reverend Doctor. Martin Luther King Jr. AFL CIO President George Meaney on how union pension dollars could be used as a tool to promote equal housing opportunity. Those are our origins. Six decades later, the AFL CIO Housing Investment Trust, or HIT, and its subsidiaries have invested $11,600,000,000 in six thirty projects all across the country, creating 131,617 units of housing, which has generated 51,000,000,000 in total economic benefits, 6,900,000,000.0 in tax revenues, and 215,500,000 of union labor.

[Marc Mihaly (Chair)]: How many, you said 11,600,000,000.0 in six thirty projects, what was the, how many units or how many housing units? Think you said I missed it.

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: A 131,617 so far. And we have approximately 40 projects under construction right now across the country. HIT's Okay. Model of impact investment. So these numbers tell a story, but they don't tell the whole story. HIT's model of impact investment does not only get housing built, it helps lift up entire communities and drive equitable economic growth. In doing so, it provides a holistic solution to the affordability crisis, both creating affordable housing and ensuring that workers involved in building housing can themselves afford a place to live. In creating high quality jobs to attract the skilled and trained workforce that you need in order to meet the needs of the housing crisis. So we've proven that that model works, both nationally and in neighboring states such as Massachusetts and New York. In Massachusetts, HIT has invested $876,000,000 in 45 projects with 5,405 units of housing. 95% of that is affordable housing. That has created 23,384 jobs and generated over 700,000,000 in tax revenue and over 5,000,000,000 in economic impact. In New York, the other direction, HIT has invested 2,200,000,000.0 in 80 projects that have created 45,444 units of housing. 91% of that is affordable housing, created 30,188 jobs, and generated $426,000,000 in tax revenues and 6,700,000,000.0 in total economic impact.

[Marc Mihaly (Chair)]: Can I interrupt you and just ask a question? You said 91% of the units were affordable in New York. Is this the fund, the governing policies of the fund, whatever they are, do they what provisions do they contain concerning affordability or any other criteria for what the housing housing has to meet in order to become eligible besides the labor?

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: The the labor requirements are the only hard threshold. However, as an impact investor, we seek to invest as much as possible in affordability and affordable housing. And so we're targeting, you could call it a triple bottom line. One is creating good union jobs. Two is getting affordable housing built, and three is generating modest but reliable returns for union pension fund beneficiaries.

[Marc Mihaly (Chair)]: What are those returns that you seek?

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: They're in line with other fixed income investments, which the returns fluctuate. Typically fixed income mutual fund returns are in the single digit range, but it does fluctuate with interest rates, and HIT is right in that range.

[Marc Mihaly (Chair)]: So this is important for the committee. So the returns are what fixed income returns would be, not what real estate investment trusts would be, which are usually double digit. Right? Yes. Oh, and by the way, you said in terms of labor, we you know, there's not as I'm sure JP has informed you, there's this is not what was thought of as a state chock full of labor, employment, the construction trades. I assume that when you say it has to be built with labor, am I right that that could be a labor what do we call them? Agreement? Project labor agreement. Project labor agreement with the contractor, which is not a labor it's not strictly a labor movement contractor, but it has to agree to prevailing wages or something like that?

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: The requirement is that the workers need to be union represented. And so we'll we'll defer to the Vermont Building Trades on how to structure those agreements. But generally speaking, yes, a a project labor agreement in most cases would meet the requirements that HIT has. It essentially means that the workers on projects are being paid wages and provided with benefits and working conditions that meet the terms of a collectively bargained union contract. Thank you. And so that can be done on a project by project basis.

[Marc Mihaly (Chair)]: Is this competitive? How do you guys decide who gets the award? I mean, is it it's the project that applies, or is it the local unit? Who applies for the

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: Generally, would be developers who are seeking we provide the debt for projects, and so it'd be developers who are seeking construction financing, which is typically 65 to 80% of the project cost, so the lion's share of project costs, who would then come to us looking for financing. And so we've had good conversations with one developer so far in Vermont working on a major project. Definitely interested in talking with others. What we find is that for affordable housing, in general, affordable housing requires subsidy in order to be affordable. And so the challenge we find is that there are many cases in many states where there are subsidies that require labor standards, whether it's prevailing wage or a project labor agreement or use of skilled and trained workforce, but there are also many subsidies that do not. So for us, once that floor of labor standards is in place, we can get involved and get hands on and do help move projects forward and provide them with competitive financing. If it's okay, I do have a few more remarks on this. Should I continue?

[Marc Mihaly (Chair)]: Please do. When other members raise your hands and we'll go we we don't wait till the end. Well,

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: I'll keep jumping reading through, and if anybody has any questions, feel free to jump in. So we have been asked to provide testimony of how the AFL CIO Housing Investment Trust could bring this model of housing development to Vermont. We have yet to finance a project in Vermont, but particularly in light of Vermont's strong tradition of innovation and affordable housing development, we would be enthusiastic to partner with you to deploy union pension fund capital to help meet Vermont's need for over 40,000 units of housing by 2030, which is what I've seen on the most recent dashboard. As a socially responsible investor of union pension funds, our threshold requirement for direct real estate investment is simple. Projects must be carried out with union labor. To achieve this goal here, what we need from government is to set a floor for labor standards in government supported housing development. That can take the form of requiring a project labor agreement, reflecting collectively bargained wages and benefits. It could take the form of prevailing wage standards, use of apprentices and state registered programs, or other similar requirements. As I'm sure folks are aware here, since the New Deal era, such requirements have been very common for investments in infrastructure and public works and generally apply to housing development projects that receive federal support in the form of Section eight vouchers, National Housing Trust Fund, and other capital subsidies, or HUD insured financing. The architects of those programs designed those programs that way because they acknowledged a simple truth, which is that we cannot address affordability by underpaying workers. It serves the public interest when government ensures that public dollars advance the public good, And that was in fact the policy perspective that informed what many see as the golden age of this country's growth, the postwar era, where productivity and wages rose in tandem. Unfortunately,

[Marc Mihaly (Chair)]: in

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: the last maybe half century, you could say some of those lessons have faded, and our economic policies, including housing policy, has drifted away from the goal of connecting the dots between the well-being of working people and the health of our economy. It is also well known that there are major problems in the construction industry that have resulted. I'll share some statistics from a recent national study. The estimate is that 1.1 to 2,100,000 construction workers are misclassified as independent contractors or paid off the books, which costs taxpayers 5 to $10,000,000,000 annually in unpaid Social Security and Medicare contributions, unpaid payroll tax, overtime, unemployment insurance, and workers' compensation insurance payments. This same study, and I'll share a link, estimates that Vermont's share of those costs totaled $95,600,000 per year. There are additional costs that come from low wages in the construction sector. Another study found from UC Berkeley that an estimated 39% of families with a family member in the construction industry are enrolled in one or more Social Safety Net program. That costs an estimated 28,000,000,000 annually through the provision of benefits such as Medicaid and SNAP. So in an environment of uncertain federal resources, government cannot subsidize developers and contractors that do not create high quality jobs in our communities. We can also see a very stark contrast between that approach of development, which does not focus on job quality, and HITS model. Our track record of 11,600,000,000.0 invested in six thirty projects has generated 6,900,000,000.0 in tax revenues. This demonstrates that And 51,000,000,000 in total economic benefits. This demonstrates that there is a better way. An investment in workers pays dividends to the entire community through increased tax collections and economic impacts that catalyze economic equitable economic growth. Across the country, we have seen that policymakers are increasingly, again, connecting the dots and returning to policy frameworks that create the abundance of the postwar era through state level tools that bring the benefit of union built affordable housing to their communities. In 2022, we partnered with the state of Nevada to create, through its recently established state infrastructure bank, to create a $20,000,000 revolving account for union built, union pension fund financed affordable housing development. So far, as of last year, we made our first investment ever in Nevada, providing $30,000,000 of hits capital to leverage a $7,000,000 state investment that will build two zero eight units of affordable housing in Reno. Late last year, the State Infrastructure Bank committed $25,000,000 to build thirteen fifty units of affordable housing, redeveloping a golf course in Las Vegas into the largest affordable housing project in the state's history, which we look forward to financing. Closer by, last fall in Connecticut, the state committed $50,000,000 to create a similar program, which will create union jobs, build affordable housing, and catalyze union pension fund investment in a similar manner. Similar programs are in the works in cities and states across the country. We would be proud to partner with government, labor, and the private sector to create union jobs and affordable housing financed with union pension fund investment in the state of Vermont. And I'll leave it there.

[Marc Mihaly (Chair)]: Question, a couple of questions for you, JN, maybe you JP. Would the current state of the law in Vermont allow projects to qualify if they had project labor agreements? In other words, as what I understand from Eric, it's not just that the individual project has to have a project labor agreement, but that the substrate of state law is implicated as well. Am I saying this right, Eric?

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: The way we've every state is different with the the legal landscape. The way that we where we found success in the programs in Nevada and also more recently in Connecticut is creating pools of subsidy. In both states, that subsidy was generated through a state bond issuance. Generally, was a larger bond issuance and a small set aside was then put into a program which was designed to create and intended, had a legislative intent to create high quality jobs in the construction industry, and to catalyze union pension fund co investment. And so the language in Connecticut, the requirement for access to those funds was a project labor agreement, use of a skilled and trained workforce, including apprentices and state registered programs, and co investment from a union pension fund or co mingled fund of union pension investments with a track record of investing in affordable housing construction. And so it doesn't necessarily have to be a PLA requirement. Another way to catalyze the investment would be to dedicate a pool subsidy, which requires co investment from a fund such as HIT, is not the only such fund, but we are the most, I'd say, have the longest track record.

[Marc Mihaly (Chair)]: No, I misunderstood, I think. I thought, I think incorrectly, that you were saying that it's not enough to look at the individual project, but that the state itself had to have certain prevailing wage laws or other things, but that's not the case. It's the project that matters.

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: At the end of the day, it's the project that matters. Generally though, of the broader landscape of project pipeline, if there are no standards on subsidy, in Vermont, as in all states, there is millions of dollars, tens of millions of dollars every year in subsidy going in to projects. Some of it's money for infrastructure, some of it is the Low Income Housing Tax Credit, others are, you know, housing trust fund, federal funding, or other pools of state funding from the general budget or bond issuances. Presently, and I'm not the expert on this, it does not appear to me that there are any labor standards on funding going into housing development in the state of Vermont, nor in the recently passed infrastructure package, which if I understand correctly is financed through tax increment financing. What that does is developers are competing obviously for that money. They're also profit oriented and seek to drive costs down. It puts us at a severe disadvantage as a responsible investor to get projects to use union labors that we can provide financing. Financing is highly competitive, but we're not going to be able on our own to convince a developer to use union labor. That's where we need government to play a role to set a floor. The reason I've cited some of these statistics about misclassification and costs to the public through public benefits fund payments, If developers do not create good jobs, family sustaining jobs with benefits, ultimately the state's going to be footing the bill for low wages to workers one way or another. And so we've created a mechanism instead where create family sustaining jobs, it pays for itself in tax collections and economic activity of workers having good union careers.

[Marc Mihaly (Chair)]: Thank you. I have one more question, but I don't want to, if members of the committee want to, should I just go ahead or do you have a question? Is, you mentioned that you are basically often coming in as a construction lender with a kind of 60 to 65% and presumably the rest of the capital stack is equity or other sources. How about take out money?

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: We also provide permanent financing.

[Marc Mihaly (Chair)]: Okay, correct.

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: And we typically, we work with local banks typically as partner lenders. HIT is the investor, and so it can allow small local banks to provide a lot more capital for projects. We also look to work through state housing finance agencies to write credit enhancement, or to use the government sponsored enterprises, Fannie, Freddie, or HUD for insurance, and that allows us to reduce the cost of capital through credit in hand, through the guarantees that those institutions provide.

[Marc Mihaly (Chair)]: Right, do you ever take second place? First, you always want a first, or when you work with banks, you subordinate?

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: Generally, no. We do have some new mezz debt authority, where for the right project, we may be able to get creative.

[Marc Mihaly (Chair)]: That's mezzanine debt. Yes. It's real estate, guys. It's this fancy word for kind

[Emilie Krasnow (Ranking Member)]: of We don't wanna be real at some You

[Mary E. Howard (Clerk)]: don't wanna be your first. Right? Okay.

[Marc Mihaly (Chair)]: Yeah. But generally, you're first unless you occasionally come in as mezzanine debt. Okay. Yeah. And then you take an interest in the in the developers single purpose energy.

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: We would be we're the debt, and so it's not an ownership interest. Okay. But we would be lending to that single purpose entity. Yes.

[Marc Mihaly (Chair)]: Yeah. Okay.

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: And typically, developer provides the real estate as as collateral. We also finance projects through I mean, it's the last hundred years seems like the story of making financing real estate as complicated as possible. We also purchase mortgage backed securities, which is another way to provide the capital for housing development. And so, for example, in a deal, let me think of it as a recent example, we can even bridge a lot of affordable housing is financed through tax credits, where a developer gets awarded tax credits. They then, through a syndicator, sell the tax credits, get the proceeds, but the proceeds don't all come in at the same time or when they need them. So we provide bridge loans against tax credit financing. Often that's the equity in an affordable housing deal. We then will, in the same deal, we may work with a local lender to write a construction loan. We can do that without credit enhancement, a direct construction loan. And on the same deal, we can also provide the capital for the permanent financing, which is the mortgage, you know, once construction is complete, which repays So the we do almost the entire This capital

[Marc Mihaly (Chair)]: is, by the way, just for the committee, you've heard about our local tax credits, right? Yes. 49%. You know that these tax credits work for a bank or somebody buys the tax credits, right? Yeah. But they're somewhat less than the credits they get, so they account for the time value, money and profit. The problem is, very often, is the tax credits don't come in on day one. They don't pay upfront. They pay, I guess it's, you know, kind of it's usually paid up in the first year or year and a half, but not right away. And so what he's saying is they'll step in and provide bridge financing in advance of the tax credits, and then they get paid back when the tax credit money is paid in. Yes. Also, what he's saying is these are all devices that really good, like green banks use in the environmental area, you know, it's the same kind of thing. They may do what our treasurer does, which is they'll come in and they'll say to a local, well, they'll just lend money at below market interest, or they will go to a bank and say, you lend the money Northfield Savings, but instead of lending it at 8%, if we're there backing it in some way, you can reduce your we're reducing your risk so you can lend it at less money. This is all very interesting. Why have they not been active so far in Vermont? Oh,

[JP Isabel (Executive Director, Vermont AFL-CIO)]: that's a great question. Eric, do you want to take

[Mary E. Howard (Clerk)]: a stab? I see that I

[Marc Mihaly (Chair)]: must hit a funny bone here.

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: Well, think, you know, I don't know. I think that the landscape has been changing so much in the past few years, and I think that all across the country, cities and states where there wasn't as much a focus on housing, now there is. You know, think this conversation started when we got introduced through JP, through Senator Bernie Sanders, and we were very grateful for the outreach, and we're also able to meet Treasurer Pichak and others, as well as members of the Burlington City government. And so it's been a lot of wonderful conversations. Think one reason why there has not been a project yet, it could be because there were not so many very large scale projects previously. That's maybe my guess.

[Marc Mihaly (Chair)]: You mentioned one developer, you're to say, are you talking to the ride my bike people?

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: Yeah, yes, we've been talking to Jonathan Rose, and we haven't met Hula yet. But yeah, and we would love to finance that project. I think, probably the main reason we haven't been able to finance a project yet in Vermont is because I think, like many places where there has not been a lot of residential development, also has not been a lot of union density in residential construction simply because that's not where most of the jobs were, but that's changing dramatically. If 40,000 homes are going to be built in the next four years, that's a lot of jobs and a lot of opportunity also for impact that can be created through a jobs program. So our framework generally has been to try to look at everything holistically, and as we're building housing, also look at how can we change lives through creating good union careers, which also leads to higher quality housing, safer worksites, and other collateral benefits.

[Marc Mihaly (Chair)]: Let me give you an example. I mean, where I'm coming from is I'm here we are in a state in which, as I'm sure you know, labor is less pervasive than it would like to be, and I'm trying to figure out how we might use the resources of the social impact investment, what's it called, HIT? HIT. HIT, Housing Investment Trust. Given that reality, you know, while Let's take a project where we want to use either let's say it's a 100 units, it's a 100 units, just happens to be in a rural area, which might be either off-site built modular housing, or manufactured housing, which may be single wides and double wides, or might be much bigger manufactured housing. In either case, let's just say that the entities would build that housing are not labor. It's not labor. What could be labor is the installation of those projects, but not the building. Do you follow me? Yes. Have you thought about this problem?

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: Yes, and you know, some things I can share. The building trades in New York City have been very innovative, and about fifteen years ago, had a project labor agreement with a modular manufacturer who set up a factory, the workers were union members, and they built modular housing units. You know, I think the challenge with modular has been until, and maybe this whole challenge will be solved soon in the current housing crisis, generating enough of a pipeline to make it really make sense to operate a factory. You know, industrial production works when you have large volumes, so I mean that's an opportunity. For HIT to finance a project like that, consideration, the number one question on our list is the building trades unions. Are they satisfied with the agreements that are in place? And so we would look for, yeah, for us to be able to finance it, I believe we would need the factory itself to be unionized, which, you know, I think if there's enough demand, manufacturers should welcome that. You know, be better for the state. There's all sorts of benefits for retaining a workforce, so you know perhaps the manufacturer is willing to talk with the willing trades about allowing workers to unionize without interference. That might be one question. Yeah, so not out of the question, but I think it would be a conversation with the Vermont Balloon Trades.

[Marc Mihaly (Chair)]: Right. Do you happen to know it's Huntington Homes Union? Assume not. Thing is so much isn't union here because it's literally just never come across the transom. You know what mean? It's just like people don't even think about it.

[JP Isabel (Executive Director, Vermont AFL-CIO)]: And that's what we're trying to fix.

[Marc Mihaly (Chair)]: Yeah. I'm Yeah. I'm sure that they probably think they treat everybody very fairly, and for all I know, they would be completely comfortable with an agreement because that's what Yeah,

[JP Isabel (Executive Director, Vermont AFL-CIO)]: and I think to Eric's point, it is a scale issue. If you're just doing a one off project, those are gonna be harder for us as a But new the reason I wanted to have this discussion is because I think it can be more than a one off. And if we can get that momentum going, we can really get continuity of work and continuity of employees working to build a house.

[Marc Mihaly (Chair)]: Well, actually then you should know about a few things happening here. One of the problems we have, well, of course, I'm assuming, I don't know, do you know whether the major Pennsylvania, for example, the major Pennsylvania manufactured housing producers, are they union? Eric, is that I mean, there there's

[Cameron Wood (Office of Legislative Counsel)]: we had talked to initially.

[Marc Mihaly (Chair)]: You had put these guys produce a thousand houses in a year. That would be an interesting thing to find out. That that's one thing. But in terms of the off-site manufactured housing, we've given a lot of thought to that, and there is some question as to whether we want to assist in the creation of another off-site manufacturer here. Fair Haven?

[Deborah "Debbie" Dolgin (Member)]: In Fair is it Fair

[Marc Mihaly (Chair)]: Haven? Yeah. Mhmm. Okay.

[Deborah "Debbie" Dolgin (Member)]: You know about that, JP? Skyline.

[Marc Mihaly (Chair)]: Yeah. It's you should know. It is a study at this point, but It

[Emilie Krasnow (Ranking Member)]: used to be a big factory, and they've been talking about trying to make it into a manufacturer modular housing facility, and it's just this huge warehouse space where they would be keen to to have enough demand in a contract in order to push it push it forward. It used to be

[Mary E. Howard (Clerk)]: Skyline Industries.

[Marc Mihaly (Chair)]: Wasn't a manufactured home? No.

[Mary E. Howard (Clerk)]: No. Something else? No. It wasn't. No. I can't remember what it was then.

[Emilie Krasnow (Ranking Member)]: Was always modular buildings?

[Marc Mihaly (Chair)]: Think it was modular and went out of business. See, one of the problems with modular remember remember everybody, modular is less flexible to fluctuations in the housing market because they have this permanent workforce and permanent capabilities, and they okay. What you should know specifically is there is under contemplation here, and there is a bill under consideration which would allow bulk ordering of off-site modular homes by aggregating smaller orders where a state entity is the aggregator. Mhmm. Private developers, small developers are behind it, and the treasurer is using its funds, you know about the 10% for Vermont, it's using its funds as a credit enhancement. So, the interesting question, with the idea of could you go to Huntington Homes and say, build 40 of these? Yeah. You should know that, I don't know at this point, I have no idea whether that's an opportunity that would appeal to either the treasurer or, I mean, or the modular developer. Would love

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: to learn more about it. It would it would for us to be able to invest and support the project, there would need to be a collective bargaining agreement in place with the Vermont Building Trades.

[Deborah "Debbie" Dolgin (Member)]: Sure,

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: yes. That's not doable. That's been done in many places at this point with building trades unions and off-site manufacturing.

[Marc Mihaly (Chair)]: Did you have a question?

[Mary E. Howard (Clerk)]: We were looking up to see if that was at one point a manufacture.

[Deborah "Debbie" Dolgin (Member)]: It was. Yeah, that's what it was.

[Marc Mihaly (Chair)]: Yeah, and I mean there used to be eight in the region that we've had testimony and now there's like one or two. Other questions of these two gentlemen? Yes, Karen.

[Mary E. Howard (Clerk)]: I have a curiosity question. You mentioned a location in Connecticut. Where is Connecticut?

[Deborah "Debbie" Dolgin (Member)]: Do you know? Oh,

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: in terms of the I think

[Mary E. Howard (Clerk)]: The location. What's town?

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: Oh, in Connecticut, we worked with state legislature to create a program last year, and we're currently looking at projects in five different cities to use those funds.

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

[Marc Mihaly (Chair)]: New Haven. Other other questions of Eric or JP?

[JP Isabel (Executive Director, Vermont AFL-CIO)]: I would just say on the creation of those things, the manufacturing home or the working with the treasurer's office, certainly that's an opportunity for you folks as well to say, if this is a priority, the state of the treasurer's office, why don't you set aside x for union housing? Certainly, and any other piece of legislation. And you may see some of something come over from the senate on this as well.

[Marc Mihaly (Chair)]: On this issue or on?

[JP Isabel (Executive Director, Vermont AFL-CIO)]: On union labor and building house.

[Marc Mihaly (Chair)]: When there is public money, like in ships or something like that?

[JP Isabel (Executive Director, Vermont AFL-CIO)]: In particular, there's a I've seen a bill that gives that would give a density bonus to a project.

[Marc Mihaly (Chair)]: Oh, right.

[JP Isabel (Executive Director, Vermont AFL-CIO)]: That uses union. I

[Marc Mihaly (Chair)]: would think that you might wanna have conversations with the treasurer. I'll certainly mention it to the treasurer. I think that would

[Deborah "Debbie" Dolgin (Member)]: be helpful as well.

[JP Isabel (Executive Director, Vermont AFL-CIO)]: As I had mentioned, the treasurer has the office has been in on all of these conversations with folks that we've been having.

[Marc Mihaly (Chair)]: But have you told the treasurer about it? Yes. Okay.

[Mary E. Howard (Clerk)]: I'm curious whether have you talked with the like with any of the contractor groups in the state to talk about the sorry. Did you guys already cover this?

[Marc Mihaly (Chair)]: No. Okay.

[Mary E. Howard (Clerk)]: No. Mean Tell me what those

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: We've been meeting

[JP Isabel (Executive Director, Vermont AFL-CIO)]: with developers. We've been meeting with for Champlain Housing Trust, VHFA. Again,

[Cameron Wood (Office of Legislative Counsel)]: we've

[JP Isabel (Executive Director, Vermont AFL-CIO)]: been having these conversations with the senator with senator Sanders' office and with the treasurer's office.

[Mary E. Howard (Clerk)]: No. I mean contractors,

[Emilie Krasnow (Ranking Member)]: like AGC and

[Marc Mihaly (Chair)]: the Yeah. They talk to them. And The problem is, it's just not a union environment. And the interesting thing about this is, I mean, Eric is making all of these policy arguments, which are why unions matter and why union labor makes sense, socially good, pays back the investment, etcetera. But they're all just pro union arguments. What Eric what Eric also argued dangling a really

[Emilie Krasnow (Ranking Member)]: big carrot that is investing in all dollar investment trust. Yeah.

[Marc Mihaly (Chair)]: Attached to this, to be blunt.

[Emilie Krasnow (Ranking Member)]: Yeah. Yeah. That is the headline. I that was changes the discussion

[Marc Mihaly (Chair)]: perhaps a little bit. Yeah. So anyway, this is interesting. Other questions? JP, do you have any more you wanna say?

[JP Isabel (Executive Director, Vermont AFL-CIO)]: No, I just, again, thank you for taking the time. I think this is another tool that we're not using right Yeah. There's a way that we can be using it. So, feel like we can get there together. So, hope we can.

[Emilie Krasnow (Ranking Member)]: Can I ask one more clarifying question?

[Marc Mihaly (Chair)]: Please go ahead.

[Mary E. Howard (Clerk)]: So,

[Emilie Krasnow (Ranking Member)]: this would be one of those, like, remove an obstacle or say, do it this way, as opposed to like a big ask that would enable open the doors to this new kind of investment.

[Marc Mihaly (Chair)]: Well, yeah, I mean, some way the the interesting thing about this is that these guys just listening to Eric, I can tell you, I taught land transactions, finance, and development for years at the law school. And there are so many interesting ways to participate in construction, in ways that magnify your money. I mean, we don't have enough money in Vermont. That's our problem with housing. We do not have enough money. I mean, you heard two thirds of the housing has to be subsidized. We don't have anywhere near enough money to do that, but we we can pretend it doesn't have to be subsidized all we want, but it just means we won't be building that house. So, we need money. Yep. When you need money, one of the ways to do it is to use outside money, not to buy the housing, but to inject in ways that are creative that allow the private sector

[Deborah "Debbie" Dolgin (Member)]: You're leveraging up the numbers. Leveraging it.

[Marc Mihaly (Chair)]: And these guys are I can tell, they have all kinds of actually, would say the full deck of cards when it comes to ways to subsidize. I mean, I don't hear any limitations on what you can do. You can even do mezzanine debt. So they really could do probably anything. Mhmm. And I think the treasurer ought to know that. You know, it may be I I really do think the ride your what's it? Ride your bike. Ride your bike is a very interesting option.

[JP Isabel (Executive Director, Vermont AFL-CIO)]: It's a very attractive option.

[Marc Mihaly (Chair)]: Yeah. Very attractive. Three basins.

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: We're very excited about that potential project.

[Marc Mihaly (Chair)]: I think and I don't think in Burlington, a project labor agreement would be a major obstacle, but I'm not gonna speak to that. You're looking very Cheshire Cat. Any other questions? Eric, I do see you on the one hand, you alleged that you love Vermont. On the other hand, I see out your window what looks like about a 50 story building. Wow. So what I think we're going to do is to say that the next time that we invite you to testify, we won't allow you to come unless you're here in person. Perfect. Thank you. I'll let our CEO know. I have to be there. Right. I would say there is no window in Vermont out of which you see what I see out of it.

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: Well you have much more beautiful views out of your windows from my experience in the state. Well I think all of us at HIT would love to spend a lot more time in Vermont, ideally for groundbreaking and then for ribbon cutting with members of the union building trades and the state legislature and all of the stakeholders it takes to get housing built. So we'd love to continue the conversation. We can also provide more detailed list of different ways that states can catalyze investment. There truly is a lot of creativity happening in housing policy right now across the country, and this has been a wonderful conversation as well as the others we've had with the state treasurer and other stakeholders. So we'd love to talk, continue talking.

[Marc Mihaly (Chair)]: Thank you. Thanks a lot. JP, have you been in touch with Michael Gone? Michael who? Gone? No. K. We'll talk offline. Okay. Alright. Thank you very much. We are done for the day. We are about to go into on the floor, and, JP, don't go away. Should

[Eric Forman (Director of Housing Policy, AFL-CIO Housing Investment Trust)]: I log off?

[Marc Mihaly (Chair)]: Thank you. Alright. Thank you. For your information, tomorrow, we have house floor at 09:30, and then the Vermont Housing and Conservation Coalition, which is everybody involved in affordable housing, is here tomorrow, and we have testimony from them, and then we come back to your favorite subjects. And then we are going to hear Friday afternoon. We're going to hear about VHIP. We have Sean Gilpin coming in. So you're you're you're you're ready to go? Okay. Any other final questions, comments before we adjourn?