Vermont Legislature SmartTranscripts:

[Speaker 0]: Welcome back everyone to House General and Housing, and it is still Thursday, March 12, and we're looking into the whole issue institutional and private equity, real estate investment, purchase of single and smaller multifamily housing. We have a bill, H-six zero seven. Peter and our other witnesses were not it's were not likely to be voting a bill out before crossover. This is a chance to begin a process of investigating this issue. We've heard our council walk through this particular bill, but the bill is just a vehicle. I mean, we know that it could change. It was put together by our council using other states' examples, and so here we are. Peter, welcome. You know you've been here before. You know us? Yeah. Indeed. You wanna tell us your name for the record?

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: Peter Tucker here representing the Vermont Association of Realtors. I'm their Director of Advocacy and Public Policy. Thanks to the chair and members of the committee for having me here today. Nice to see everybody again. So, you know, I come here today representing about 2,000 members in the Vermont Association of Realtors. You know, I am largely informed by a government affairs committee, has members from each local board across the state, who provide incredible backdrop on policy decisions and information, you know, for me to bring to you. And I'm here today to tell you that the Vermont Association of Realtors is going to oppose H-six zero seven as constructed at this point. This is a big city problem. It doesn't fit Vermont's rural landscape. You know, your previous witness was from Rutgers Center for Metropolitan Equity. You know, this is a small state, a very rural state. Vermont faces well documented housing shortage. State housing studies consistently show that the state needs tens of thousands of additional homes in the coming years to meet demand. Addressing that shortage will require significant private capital investment in both creation of new housing and the improvement of existing housing stock. Policies that unintentionally discourage housing investment, particularly from out of state capital sources, risks slowing development and rehabilitation of housing at a time when Vermont needs more investment, not less. Vermont's housing market is relatively small and construction costs are already high. As a result, many housing projects depend on capital that comes from outside the state. H-six zero seven attempts to address a concern about large institutional investors purchasing single family homes. And while the goal of protecting housing access for Vermont residents is understandable, it's really important to recognize that large institutional ownership of single family homes is not currently a meaningful issue in Vermont. Vermont's small housing market, high construction costs and maintenance costs, and limited scale make it unlikely that this type of institutional investment activity will be seen in larger metropolitan markets will occur in any significant level in Vermont. For these reasons, it's important to ensure that legislation aimed at national issues does not unintentionally discourage housing investment, which is what Vermont actually needs. You know, we've reviewed the bill, know, got really great input from a number of different folks, and just kind of to work my way through it. You know, I think that defining the institutional investor is certainly the first concern. I did hear counsel say that all three of those categories must be hit to accomplish that. I will say that when I was reading it, I was thinking that it was 10 units or the other two units. I got it.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: I've said that to you Yes, before

[Will Fricke (Assistant Town Manager, Stowe)]: have.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: But look at the executive order on institutional investors, and I believe their threshold is 100 single family homes. Know, 10 just seems like a very small number. And you know, with all of these, our concern is you're going to be sweeping in investors who have invested in real estate for years in the state, and then also limiting what we need is investment to create new housing in the state

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: as well. Real quick, can I just comment on I think I've been clear and I want to save the record because if anyone knows me, the last thing I would want to do is stop building housing? This has nothing to do with that. So I'm not sure not trying to get about it, but I don't know why that keeps getting mentioned about building housing because that's not part of this bill. It's about buying it.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: Well, it's about investing in housing.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: No, but not the production of it. Okay.

[Charles Stafford (Town Manager, Stowe)]: Do you

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: see the difference?

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: I do. Yeah.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: Okay. So the last thing I would ever want to do is stop investors from building housing. We need more housing in Vermont. I've made that so clear. This is about people buying, not investing in the production of housing. It's about people buying the single family homes.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: And how about an organization that buys some and builds some?

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: That's not included in the bill.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: Right. Well, if they bought more than 10 units, then it

[Charles Stafford (Town Manager, Stowe)]: would be.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: Do they meet all those three criteria?

[Speaker 0]: They could meet all they could.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: I understand, but I just want to be so clear, and we have talked about it and publicly that it's not about the production of housing. If they you're saying that if they build the housing and then want to sell it, that's a different topic. But to have the argument to say about production of housing and people investing in that, that's not the bill. So I just want to be really clear that this is about buying.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: I think that's investment company that does both.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: And that's fine.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: Might fall into this, but they would have take that into account. They would be considered.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: And we would, and I'd love them to come here and build.

[Speaker 0]: Yep. Peter, I think that it's a good thing for you to be walking us through what your specific concerns are. Mhmm. Sure. So do you have you're thinking the you kind of would like to see more than 10. More than 10.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: Yep. And so I just, you know, I I kind of googled the Burlington Square housing project that's going on now. That's a $300,000,000 project. You know, that's 10 times the $30,000,000 investment here. If they own, if that developer owns some single family homes, you know, potentially would be considered an institutional investor. So, that's I understand what you're saying. Krasnow and let me So just carry we sell real estate and the ninety day waiting period before an investor could come in potentially is gonna penalize the seller of the property. A seller that needs to move quickly, has somebody who is willing to pay what they are willing to take, but has to then wait ninety days before that can happen seems to be too long. And then the fact that the restart could happen if the seller changed the price, it would just add another ninety days to it. A market which ebbs and flows is something that's super important and I heard it in discussions earlier, you know, in 2008, you know, at the height of the financial crisis, you know, ninety days is really not a problem because, know, I mean, you know, properties are on the market far longer than that. But ninety days is a long time to wait and sellers may need to move more quickly and this really kind of ties their hands. The other, you know, so that's on the front side. How do we qualify? Who is an institutional investor, right? And I think that the thresholds really need to be carefully considered there. Obviously the other big concern we have as real estate folks is on interest and depreciation. You know, there is one reason to invest in real estate, be you a big investor or a small investor, and that is to be able to take advantage of the tax code on depreciation and on interest, and writing off interest. I mean, we do that, you know, with our personal taxes every year. It's a huge benefit for us, and we really feel you know, if folks are gonna, you know, by chance fall into this institutional investor category, and then not be able to claim interest and depreciation, you know, that just eliminates any interest in investing in real estate, be it large or small. And this is one thing, and I think you're on board with that, is that exempt redevelopment projects, because it's not a lot of these buildings that are purchased are in need of work, they need to be redeveloped. We have a great program here in Vermont for small investors, they need access to capital to be able to make those improvements to those properties. We really look at the housing shortage you know, not being able to build enough, achieving goals that require substantial capital investment, you know, in both the state and our housing policies. And that's really what we want to see happen, not to tie up folks that would potentially invest in housing in Vermont by having them considered in this category. And I think it's in the thresholds that really matter. But that's think It's

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: not what the bill is.

[Speaker 0]: Yeah, well as he's saying,

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: go ahead and don't do it safely. Right, we want to make sure that Okay. Those guys I think you're going to find many investment companies in real estate that do a combination of different things.

[Speaker 0]: Do you have a question?

[Rep. Elizabeth Burrows (Member)]: I do have a question. Are you aware, Peter, that there has been an increase in private equity ownership of short term rentals of 22% over the last five years?

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: In Vermont. In Vermont. I'm not aware of that.

[Rep. Elizabeth Burrows (Member)]: So how would you go about combating that, or would you?

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: I guess private equity meaning, you know, I mean, not at least

[Rep. Elizabeth Burrows (Member)]: Well, your people according to the definitions in this bill. So private equity ownership of single family residences that have been bought up by institutional, according to this, or a general definition of institutional buyers to be turned into and managed as short term rentals in Vermont.

[Speaker 0]: I know, know, in the visual

[Rep. Elizabeth Burrows (Member)]: investors the increase that are over the last five, or not the last five years, but between 2017 and 2022. Right.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: Mean, has How do you think

[Rep. Elizabeth Burrows (Member)]: that impacts our housing staff?

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: Well, I think a lot of those types of properties have a tendency to be around resort areas, and condominiums, things of that nature, that just aren't really going to be used for a single, you know, for residential, long term residential housing. I will say that the concern is when you look at a property that would be excellent, a three bedroom home for a long term residence, that that is a concern. We have managed all kinds of transactions throughout this period of time. But I think those are, you know, and it's an interesting statistic, which I'm sure is correct, I believe it's correct, but it's not institutional investors, it's a lot of individual investors.

[Rep. Elizabeth Burrows (Member)]: It is not a lot of individual. I'm not talking about the conversion of homes into short term rentals. I'm not talking about money. I'm talking about buyers, the percentage of buyers of single family residences. That demographic or that population. So I'm not talking about the increase of short term rentals. We're setting that aside. I'm talking about the purchase of homes, the demographic of home purchasers that have become short term rentals.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: Correct. Yes.

[Rep. Elizabeth Burrows (Member)]: That demographic has changed between 2017 and 2022. In five years, it went up 22% to, or it became not individuals, institutional buyers. Because when I was researching, I also researched private equity firms purchasing homes in Vermont, single family homes, not units in a building, but homes, houses.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: In rent.

[Rep. Elizabeth Burrows (Member)]: Yep. And I found that, in fact, what Katie was saying earlier, is true, that it's not prevalent in Vermont right now outside of Burlington, but that this is the impact in Vermont, that the purchase of single family homes to be turned into short term rentals. It has changed dramatically over a short period of time. And yeah, Okay, maybe 22% doesn't feel significant over a five year period of time, but it is growth. So if we are sitting here as legislators thinking about how we go about providing more housing for our families is not just building more housing, it is also creating opportunities for families and private equity firms that buy up our houses and turn them into short term rentals so that they can be managed as a I guess it's easy, right? Mean, it's a dream for a private equity firm or a person buying into a private equity firm. You're buying a house in Vermont. You don't even have to be in the country, let alone

[Speaker 0]: I'm just thinking. I'm just saying We have three witnesses, and so if you have a question,

[Rep. Elizabeth Burrows (Member)]: otherwise we're gonna have How would you help us, legislators, stem that flow?

[Speaker 0]: I think that is something, Peter, for you to take away, which is we don't want to be stupid, we don't want to do something that will impact affordable housing supply in Vermont, We don't want to wait until it's a problem here, and we're trying to close the barn door after the cows are out. So the fact that it isn't a big problem here yet is not particularly impressive at the legislative time scale. Understood. And I think we're going to get to the point where what we'll need from you is very specific thoughts about how to grapple with the negatives associated with this problem without cramping the supply of Fort House. And so just something to think about. It's not today, it's gonna And be

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: I think the thresholds for being considered an institutional investor are where that really needs to occur. I mean, from a real estate investment standpoint, to not be able to take deductions for interest and depreciation is just, you know, you very much discourage investment

[Speaker 0]: in real estate. And in fact, a number of states and the federal government are considering just banning it, which is, I gather from your testimony, not that different from the impact on interest.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: Depending on, you know, I mean, really, I think, you know, I was going to offer specific suggestions, it's to really look hard at those three categories and make sure that they're appropriate for Vermont, that they're not dragging Vermont investors into that field. Who, you know, like we're a small state, so somebody, you know, building new construction and managing rental properties. You know, we have one of the members of our government affairs committee is Graham Mink up in Mooresville, And, you know, he's built some 300 units over the past eight or ten years, manages, some, has sold some buildings and and continues to manage it. You know, I mean, you might hit that category. Think that that's probably our primary concern. So, you know, I think if you're going to move forward, that would be where the focus is on, you know, what those thresholds are and make them appropriate. Vermont size, you know.

[Speaker 0]: Thank you. Do you have a question?

[Rep. Ashley Bartley (Vice Chair)]: Just very quickly, so your position is that, just to be clear, I heard early, early on in your testimony that the federal cap of 100 seemed reasonable to you for Vermont?

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: I believe so. Well,

[Rep. Ashley Bartley (Vice Chair)]: that doesn't sound like right sizing for Vermont. Okay, thank you.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: And can I ask one, I'm not going be bad? So I've actually heard from real estate folks as well. What happens, I want to close a hypothetical, and this is just for everyone. What happens when a certain percentage of our housing stock becomes owned by private equity or these institutional investments, and then realtors have no more houses to sell, and people in my generation have nowhere to live. What happens then?

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: They're to sell some of their properties. I think that what you see in large urban environments is very different than if people were investing in Vermont. You know, you're not going to be able to find all neighborhoods to purchase, you know, and I think that the, you know, the balance will be, you know, some for rental and some for sale. So I don't see it taking a huge chunk out of residential sales market. Thank you.

[Rep. Ashley Bartley (Vice Chair)]: I just want to say thank you. It's clear that our committee has more questions, and I think I appreciate that you're here on behalf of a membership of many different voices, and I think those are those voices are going to be those who are also affected by legislation like this. So I just want to say thank you for bringing more things for us to consider, because these are the questions that we're also going to get from our constituents, and I don't think the conversation is over yet. So thanks, Peter.

[Speaker 0]: Great. Thank you, and thank you for thinking about it. Yeah, thank you. Both what you've done so far and what you're going to do.

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: Okay. I'll keep going. And, Rev. Burrows, if I could connect with you on your data set. I'm very interested in researching. Yeah, sure.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: So our

[Speaker 0]: next witness is Chris Stabia. Thank you, Chris, for coming. You. Good to see you in person, let's go around instead of Zoom. Being set for the record, Chris Daly, President of Vermont Bankers Association, thanks for the opportunity to come and testify. I had a chance to speak with a sponsor a couple of times on this bill in the hallway and appreciate what she's trying to accomplish. I certainly understand the intent of the bill and it's got some real value to try and address the concerns that you all just articulated and the rationale for why the bill's needed. There were a couple of things that jumped out at me that I just wanna put on the table for you to consider as you walk through this process. The first thing that I looked at and just wanted to make sure that this bill was in no way impacting the relationship of selling loans in the secondary market. And it is clear that this bill is focusing on purchasing a single or two family home. It is not focusing on purchasing the mortgage, which is an important distinction. So I don't see where this bill creates a problem for lenders whose practices are to sell in the secondary market. So I think we're good there. Just hearing your discussion on thresholds, I'm gonna tread very lightly, but I think as you have done over the last couple of years in the housing discussions, you will invite the right people in to have the conversation about what are the right thresholds. As I said to the representative, the sponsor early on when this came out, I can't tell you today whether these are the right thresholds, but if you're going after those large investors that are outside the state, that's fine. If unintended some investors in Vermont get wrapped up into this and that's not your intent, then you just have to figure out what the right numbers are, Whether it's 20 or 100 or 50,000,000, I can't sit here and tell you what it is, but you will find the people as you've done in the past to tell you what that is. The other area that I had a concern with is how this bill could relate to the foreclosure environment. You do have a provision in the bill and I apologize, I'm gonna try and find it quickly, but there is a provision in the bill, it's on page two, lines eleven and twelve, a creditor or its loan servicer acquiring ownership of real property in full or partial satisfaction to secure debt. One thing to keep in mind is one, as creditors go through the foreclosure process, we actually never take ownership. The title is still in the previous borrower's name, and then when the foreclosure is done and the property is sold, that's when a new deed is issued to that new owner. It is not our goal or interest to have ownership of the real estate. So what I'm a little concerned with here is, does this in any way impact the foreclosure process that we already have in Vermont, which is complicated. It's the least option that we wanna look at. It's a judicial process, which means that it can take upwards of three years to go through. It's a process that we are obligated to comply with the court's decision. It's a process that has mandatory mediation, which means that even before you get to court, you are providing the borrower a mediation process with the goal of trying to alleviate the delinquency, keep them in their home. Sometimes that works, sometimes it doesn't work, but that is a statutory process. You then go through the court process, and part of the rationale with the way it's been structured in statute is you want to maximize benefit to the borrower, minimize loss to the creditor, what does that mean? Keep in mind under the foreclosure process, the excess equity goes back to the borrower, even though they may not be in the home anymore, it goes back to the borrower. So I'm not even sure how a ninety day process in a foreclosure process would work.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: It's

[Speaker 0]: gonna keep the property out there longer, that property may be vacant, you want it back in the marketplace quickly. I'll be candid with you, we get very few investors that show up the bidding, if you will, at the end. I'm concerned, not about the large guys, but again, this is the unintended, if we've got local entities here that might be covered under the institutional investor that are showing up and they're ruled out because of this. Our foreclosure, again, I think that's a problem. We want to get that property back into the market as quickly as possible for all parties involved. So I would ask the committee to consider whether it's appropriate to do just an exemption for foreclosure process. And I think you might hear from our friends at VHFA, they may share similar concerns. I think more, who I know is not gonna be here tomorrow, but George, I think is gonna be here tomorrow, may have some other issues, which I've looked at quickly and supportive of. But in general terms, we don't see an issue with the bill, we just think there's a bit more conversation you have to have and just figure out how do you create what's appropriate here for Vermont. And you obviously hear that in your conversations. We'll watch those conversations and if we can be supportive in any way, we will. But at least some foreclosure pieces, one that we would wanna address we want, we've gotta follow what the judicial process is. Thank you, Chris, both for you, Chris, and for Peter. Something to put in your pipe as you think about this. Sure. We've had testimony that evidences that whereas in the Sunbelt and the South and the and Florida and mega investors and publicly traded investors are primary players. In the Northeast, the investors that are doing this and engaging in activity that results in increased problematic activity, that they're not big investors. They're smaller private equity firms that acquire a couple of 100 homes. And so, I think the pure process is simply raising thresholds. I agree with you, thresholds are essential, but it may be that we're going to have to think about quality rather than quantity, and I'm not sure what that, I have no idea yet what that looks like. I'll share with you, I think a similar discussion I had upstairs in healthcare. Colorado Healthcare was looking at the institutional investments, right? And what I said to them is if there's a way you can surgically look at this to identify the behavior you don't want, then that's a good approach because candidly, you may need an institutional investor at some point, if you completely rule that out, you may have created a problem for whatever's involved. I hear you, I'm not sure how we do it, but it is true that what concerns us is not so much the origin of the money as its behavior. Right, right.

[Rep. Elizabeth Burrows (Member)]: Well, thank

[Speaker 0]: you so much.

[Will Fricke (Assistant Town Manager, Stowe)]: Thank you

[Rep. Elizabeth Burrows (Member)]: so much. Happy Tuesday.

[Speaker 0]: So our next witness, Charles Stafford and Will Prickle, do you guys want to testify together?

[Charles Stafford (Town Manager, Stowe)]: Yes, I'm Charles Stafford.

[Speaker 0]: There's a chair there. Are you going to testify jointly? Would you like to?

[Charles Stafford (Town Manager, Stowe)]: Yeah, he's going to back me up and he's going to run the computer if that works too. I do the music.

[Speaker 0]: You're the van of white, The question is, does he know how to operate?

[Charles Stafford (Town Manager, Stowe)]: You'll find out, right?

[Speaker 0]: Okay, ahead.

[Charles Stafford (Town Manager, Stowe)]: Yeah, I'm Charles Stafford, for the record I'm the Stowe Town Manager, this is Will Fricki, he's the Assistant Town Manager in Stowe. We appreciate the invite, it was less than twenty four hours ago, I saw a little select board meeting last night when we received it, so we're not experts on the bill, and haven't spent a lot of time with it, but we can talk about the housing experience in general in Stowe, which is very attractive to investors. So I'm just going to give a broad

[Speaker 0]: I just want to let you know that's fine that you're not on top of the bill is a vehicle. Sure. And we're not going to vote it out, it's not like we're going to vote it out tomorrow.

[Charles Stafford (Town Manager, Stowe)]: Yeah.

[Speaker 0]: So this is the beginning of our thinking and investigating process.

[Charles Stafford (Town Manager, Stowe)]: Fair enough.

[Speaker 0]: So that's where you are, and you know what, why don't we just quickly go around? You haven't been here. You want to just introduce yourselves, everybody, quickly? I'm Deborah Dolgin, and

[Rep. Elizabeth Burrows (Member)]: I represent St. Johnsbury, Coffey, New Kirby.

[Charles Stafford (Town Manager, Stowe)]: Thanks for your service. I'm Tom Charlton, Athens Chester, Grafman. Nice, I'm a Bill of Swells graduate. Nice.

[Rep. Joseph Parsons (Member)]: Joe Parsons, the absolutely beautiful towns

[Charles Stafford (Town Manager, Stowe)]: of Austin Brock. There you go.

[Rep. Ashley Bartley (Vice Chair)]: Ashley Bartley, Fairfax and Georgia.

[Charles Stafford (Town Manager, Stowe)]: Nice.

[Speaker 0]: I'm Marc Mihaly, Plainfield, Worsfield, Dallas.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: Emilie Krasnow, South Burlington.

[Charles Stafford (Town Manager, Stowe)]: The sponsor.

[Speaker 0]: We know you. Below Washington.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: Wow, I like ours. I'm

[Rep. Elizabeth Burrows (Member)]: Elizabeth Burrows and I represent Heartland West Windsor in Windsor. I live in Brownsville myself. I'm Mary E. Howard and I represent Portland City District 6. Nice. Yeah, so I represent Chittenden 20 Colchester.

[Charles Stafford (Town Manager, Stowe)]: Fair enough, Erin's Country, right? The town manager there. So I did bring some statistics to show some changes and still over time, if that's helpful. And I brought an article I'll pass around with written by one of our housing task force members. If you get a chance to read it, think it would be informative to STOW's experience in trying to maintain a residential population in our community. Conestoga So has a high assessed values. Dollars 1,000,000 is the average assessed value for condos, dollars 1,100,000.0 for a house under six acres and 2,500,000.0 for a house over six acres. That was, we just reappraised last year, so that's what we're looking at. It also has limited housing supply. According to the US census, Stowe's housing costs as a percentage of housing income is higher than the Vermont average. 49% of Stowe households are paying over 30% of their income to support their housing costs. I don't know if you can see that up there, but that's a big surprise to a lot of folks, you know, compared to Vermont, and Weld County, Forest Town and Waterbury as our neighbors, because of these high assessed values, you know, driven by demand, Stowe's an attractive place, a lot of outdoor recreational opportunities, people from around the world want to live there and vacation there, And that's great for Vermont's economy and helps the town of Stowe in the region, right? But it comes out of, this trade offs to everything. According to US Census, the American Community Survey median housing income by Vermont, the town of Stowe ranks eighty fifth in terms of household income at $86,304 So most people perceive Stowe as a very wealthy community. Its wealth is in its second home on the grand list in that area has risen dramatically, but we have a lot of Vermonters, some of them multi generational, that are trying to maintain the ability to live in their homes and hopefully have their kids remain in the community Stowe High School graduates. Stowe has seen a decline in the number of parcels with homestead decorations by 11% since 2004. 25% of Stowe's residents here in the list of 45 is in a homestead compared to 41% in 2004. So you can see what's happening. The town of Stowe is concerned about losing its year round residential base and sense of community. Stowe values its homeowners and its seasonal second homeowners, but it's concerned about the potential cumulative impact of institutional real estate investors. We don't have hard data to support it, we haven't, you know, we're still trying like you, to get our head around data as it's around short term rentals and other variables in our community, but you know we're following this with great interest. STOW has created a housing task force, which is the author of that article, to look at ways to increase our affordable housing supply. The Select Board is also in the process of developing amendments to a short term rental ordinance to cap the number of short term rentals. Most of these efforts are intended to induce more homestead opportunities, or at least not to continue to lose ground. I can't help but think that something my father told me when I first took the job in Stowe nineteen years ago, you buy a home in Stowe it's almost guaranteed to have a great return on investment, which is attractive to investors. Unfortunately I couldn't afford to move there even nineteen years ago, It's become even more out of reach. I live in Elmore, Vermont. And the converse reality is that you can't, my understanding and what we're learning on the housing task force, you can't build an affordable home without subsidy. So you can see where this trend line is headed. Not that we don't respect investment, we need that, we need to create wealth, but we also need people.

[Speaker 0]: Charles, you did say one thing really important that I'm Is it Charlie or Charles? Either or, you're the cherry, call me whatever you want.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: Know. Tell

[Speaker 0]: me where your mom calls you and I won't do it.

[Charles Stafford (Town Manager, Stowe)]: My mom called me Charlie, but most of call

[Will Fricke (Assistant Town Manager, Stowe)]: me Charlie.

[Speaker 0]: Charles, alright.

[Charles Stafford (Town Manager, Stowe)]: I'll be Charlie Brown, by the way. He

[Speaker 0]: already told me I look like a spot. That's right.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: Oh my god. So That's funny.

[Speaker 0]: No, I am not surprised at all by the high prices that you mentioned, I high was surprised by the 80 fifth or whatever it was in India. So, how does that happen? Why hasn't it turned into an enclave of the wealthy?

[Charles Stafford (Town Manager, Stowe)]: I think, you know, interesting enough, there's a lot of demand for people that want a vacation there, right?

[Speaker 0]: Is it service providers and the people who own the stores? Why isn't it just wealthy people living? If it's so high in assessed value, why isn't it an enclave of the wealth?

[Will Fricke (Assistant Town Manager, Stowe)]: If I could answer that, but we would share. If you ask the realtors, 90 percent of the sales in store for homes and condos are not residents. So their income is not included the household income. It's only that 10%. That 10% are pretty wealthy, but then you also have a lot of folks who have lived in town a long time who aren't necessarily wealthy. They bought it twenty, thirty years ago, or inherited a house from their parents, and that's where you would have that mass of folks and those residents that make up the community, and that's how you get that 86,000 median household income.

[Speaker 0]: You said 90% of the ownership owners?

[Will Fricke (Assistant Town Manager, Stowe)]: About 90% of the sales roughly every year are not restaurants.

[Charles Stafford (Town Manager, Stowe)]: So a lot of money is coming up from Boston right now. We used to think about Canada, a lot of money it's apparently razor blades and sand and gravel or whatever they're doing down in Boston, but there's, you know, just a huge desire to, you know, own property and invest in it. Know I will tell you, we started doing a registry for short term rentals and we had the audacity to charge $100 fee, someone came and said well I'm going have to give rid of my short term rental, I'm not going to invest in STOW anymore, but I said well I mean if you don't mind me asking, how much are you making on that short term rental year? He said $100,000 I said so you're not going to pay a $100 fee and you're going to forego $100,000 I mean that's the type of return on investment you're talking about, and so it can be very hard to compete if you're a wage earner in Vermont with that level of investment. Now with that being said, Stowe pays over 50% of the county taxes, it makes up over 50% of the grand list, it's the largest contributor to the state education fund, it pays over $40,000,000

[Will Fricke (Assistant Town Manager, Stowe)]: Wow. And

[Charles Stafford (Town Manager, Stowe)]: so you heard me say the other day in some publication that the gold is on this dome here, it's not Stowe. Everyone thinks Stowe is the big beneficiary. And you know to be sure, you know we have some amenities that you might not otherwise get in a town like Stowe, you know, and the size of Stowe in Vermont, know, have over 40 restaurants, we've got great outdoor recreational opportunities, but it's a struggle to maintain our infrastructure. Our physical capacity within that community is limited and people are constrained, you know, and the people that vote are the ones that live there with that $86,000 household income. So if that helps add any context to the conversation.

[Rep. Elizabeth Burrows (Member)]: Gayle, did you have a question? That task force was done in 2024?

[Charles Stafford (Town Manager, Stowe)]: Yes, it started in 2024. Still ongoing? Yes. Gayle,

[Speaker 0]: 757-1100.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: Sorry, we're interrupting with a vote from another committee. Alright,

[Speaker 0]: so we'll probably, we have about ten minutes before we got to go to the floor. Sure. Go ahead.

[Charles Stafford (Town Manager, Stowe)]: I don't have anything, you know, basically here as a resource to you.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: Thank you.

[Charles Stafford (Town Manager, Stowe)]: You know, we value our residents, we don't want, you know, we want to have a healthy balance, we've always valued our seasonal property owners, they're key and integral to our community, but we are concerned that, one of the vice chair of the select board said the other night, have homeowners, we have seasonal homeowners,

[Peter Tucker (Director of Advocacy & Public Policy, Vermont Association of Realtors)]: and we have investors.

[Charles Stafford (Town Manager, Stowe)]: We're increasingly concerned that people just look at it as a place to mine money and not spend time there or contribute beyond their return on investment. We don't want to discourage investment. It's important that we create wealth and have capital, right, if we're going to redistribute it and help support affordable housing, But we're trying to find that balance just like you.

[Speaker 0]: Yes, Joe.

[Rep. Joseph Parsons (Member)]: Thanks. I guess I was just particularly to the bill and was curious if you're seeing more of that. Are you seeing more of just individual people? And then secondarily to that would be, are you seeing if you are seeing large investors looking at it as purely an investment, Are you

[Charles Stafford (Town Manager, Stowe)]: seeing that more in the We don't know. Know, it's hard to understand. You know, we'd hired an economist to look at our short term rental data. We're trying to get a handle on a lot of what's going on and who it is, a lot of that's in LLC, so it can be hard to distinguish, people can use multiple LLC's to do their business, so it's hard to get a lock on exactly what's occurring. I think where we're at now, but I can't say we've had someone come up and buy whole neighborhoods, I mean, that we're aware of, but we don't really have neighborhoods. I was former manager in Essex Junction before Stone, right, so we haven't seen what we've seen on sixty minutes down the South. I think it's safe to say. But we don't want to see that happen either. Right. Right.

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: Okay. Yeah,

[Rep. Ashley Bartley (Vice Chair)]: that'll be it. Yes. Thank you. So this is it's actually not pertaining to the bill directly, but just for the landscape of Stowe. Thank you for sharing that because I feel like that is a misnomer that is throughout the state with the perceptions of Stowe. And so are there renters in Stowe? Outside of the short term rental, there is also a rental demographic in Stowe.

[Speaker 0]: You know, it's hard for

[Charles Stafford (Town Manager, Stowe)]: us to know that because you give us the authority to regulate and track short term rentals. We don't have any authority to track long term rentals, and so we don't really know historically the number of long term rentals or what's happening there. And you know, we have long term rentals for sure, we have affordable housing for sure in Stowe, we have a lot of J-one workers, they're very important to our economy, and so yes, about how many and what the makeup not exactly understood.

[Speaker 0]: Any other questions of these gentlemen? Be continued. Thank you for also, it's good to know it's good to know you guys, know you're around

[Rep. Emilie Krasnow (Ranking Member; bill sponsor)]: Yeah.

[Speaker 0]: That we can get our hopes in you again when

[Charles Stafford (Town Manager, Stowe)]: we Yeah. Maybe we'll have the economic

[Speaker 0]: Tomorrow, everybody, before we adjourn before we Before we adjourn, first of all, I think the committee should know that Gayle's bill passed out unanimously out of ways and reasons. So, it will be on notice tomorrow, I believe we'll find out, and then Gayle and I will get up there and do our dog and pony show. And then, also, and my rural finance bill passed out of ways and means, quite unanimously, but still with a substantial majority. And Tom did it, and now it's going to approach. Yay! So, two of your major efforts are on their way, moving. Okay, so tomorrow, the first thing we're going to do after House floor is return to sixty one, which is the bill establishing the ADA coordinator. We'll have a review and markup and potential vote on Katie. Remember, we asked Katie to sort of shrink it down in terms of the number of people on the task that had to have input on who was on the nomination of the individual that was hired as the coordinator, and also try to shrink the coordinator's role down to something one person could at least do, and we will see that and act, and then we'll return to 607 for the rest of the day, late morning and early afternoon, and that's it. As am I correct? We any questions?