Vermont Legislature SmartTranscripts:

[Rep. Marc Mihaly (Chair)]: Welcome everyone to the House Committee on General and Housing. Today is Tuesday, 03/17/2026, and it's the afternoon, we're going to hear some testimony about 8,607, which is act relating to institutional real estate investment and private equity investment purchase in single and And two family then we're going importantly, seven seventy five, which is an act relating to creating tools for housing production, it's out of committee. However, it went to ways and means, which had an amendment, and it went to appropriations, which had an amendment, and Tom caught an error, and so all three of those amendments are going to be back to us to do straw polls. Let's start with six zero seven, and our first witness is Miles McGurman, who's a policy analyst we've seen on video before at the offices of Senator Peter Welsh. Miles, welcome.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Hey, how's it going? For the record, Miles McDermott, an outreach representative for Senator Peter Welch, but policy analyst also works. So I was curious to hear what you actually wanted to hear about regarding the twenty first Century Road to Housing Act, which is this very, very, very large kind of pro supply housing package that is moving through Congress. Most recently, it passed out of the Senate. So just the backstory here, there were two bills, one in the house that was the twenty first century part of

[Rep. Marc Mihaly (Chair)]: it. That's the house bill.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Yeah, that was the house bill. It was called twenty first century, Housing for the twenty first Century Act. Then got passed out of the House, came over to the Senate. The Senate had been working on their own big housing package called the Road to Housing Act. And so we wound up sticking Road to Housing just directly on to twenty first Century and calling it the twenty first Century Road to Housing Act. That has now passed out of the Senate and gone back to the House, and that is where it lives right now. The purpose of that, there were slightly different provisions in each, both the House side and the Senate side. I won't go into that part of it, but there were two other parts that were tacked on in the Senate, and I think one of those is the one you're more interested in. So the first was Title X all the way at the end, Section 1,001, which was the central bank digital currency part, which basically just says that the Federal Reserve can't make their own cryptocurrency right now, please come back to us later. That's just trying to stop that from moving forward. And then the other part, which is Title IX, the homeownership for Main Street America, Section nine zero one, Homes are for people, not corporations. So that is the large institutional investor build to rent portion of this. And so I can start there, but just curious, do you wanna hear about the rest of the bill or do you just wanna focus

[Rep. Marc Mihaly (Chair)]: Let's let's so just to clarify. So right now, nine was added in the senate. Yeah. There's no house equivalent?

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: No. So that whole piece of legislation is in the House now. And so I guess this is where it gets a little bit more complicated, which is the House has to once again pass that entire package or they can amend it, and then it would go to conference. The Trump administration, from our understanding of what has been going on here, was the reason that this was put into the conversation. This was something they asked for directly. So it was added, but then there was pushback at kind of last minute on the Senate side. And so it still passed out of the Senate, I believe 90 to 10. So it was resounding. But now that it is back in the House side, there has been some challenges and pressure. And the president just basically said, completely unrelated to this, that he's not going to sign any bills into law until the SAVE Act is passed, which is that voter registration and all of that. So as a result, there really hasn't been too much conversation about what's going to happen in the House yet, which is why instead of this just moving through and becoming law, it's now stuck. So I think that's good table setting there.

[Rep. Emilie Krasnow (Ranking Member)]: We don't really know what will happen.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: I think there is a window here where the House might amend this. They might change specifically the build to rent provision. They might tack on other changes that are coming from advocates. But for right now, it's on the House side.

[Rep. Marc Mihaly (Chair)]: Can you talk about that Title IX then?

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Yeah, yep. So I think the easiest way to just understand it, so they set three fifty single family units as their cap. So any large institutional investor who holds, basically is allowed to hold up to three fifty units of housing, if they go above that, it is intended that within seven years of that, they will have to sell those units off. So it sets a hard cap to make it so these large scale investors aren't able to purchase 1,000 single family homes. It specifically focuses on new housing. It specifies new housing. So that is getting at the build to rent angle. From our office's perspective, this isn't really something that we see much of at all in the state of Vermont, both just having been out on the road. I don't know of any examples that fit this. Again, specifically new housing. One of these larger investment firms coming in and building three fifty one units, we don't have that. That'd be a nice problem. Right. In a lot of ways, some people would say that would be a nice problem to have. The majority of these are based in the Southeastern United States and Southern United States. So you see a lot of it in Georgia, Texas, Alabama, Arizona, and New Mexico is usually where you see this. So we didn't really dig too deep in our office on this issue once we realized the Vermont impact is pretty minor here. There's so much other good stuff in this bill that the senator was very, very happy to support it. And so just to state it very clearly from my notes, it restricts the purchase of new single family homes by large institutional investors that directly or indirectly own at least three fifty single family homes. And it provides exemptions, including for large institutional investors seeking to purchase or build new single family homes specifically for the rental market, but requires that these be sold to an individual homeowner after seven years. So that is what I have on that.

[Rep. Marc Mihaly (Chair)]: What questions so far?

[Rep. Emilie Krasnow (Ranking Member)]: I have one. Okay. So I'm gonna out one of the flags in the bill that I have, the bill that we have in front of us for the public even though I'm clearly a strong supporter because I'm wondering if there's a provision in the federal bill that might address this or if it's come up. One of the concerns that I've heard from a member of the committee and from just it's a a flag that I thought was interesting is about sellers having the right like, people's right to sell. So there's no is there not there's no waiting period in this bill? The federal one?

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: I

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: believe there is. Don't know if

[Rep. Emilie Krasnow (Ranking Member)]: there is. Yeah. Let me I'm just flagging for everyone that you know, let's say I wanna sell my house, and I feel like I have that right, you know, if I wanna sell to an institutional investor. Right? So that's they kinda just there's no there's you there was nothing figured out in the federal bill of kind of addressing that. Right?

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Not that would I think the only waiting period that I know of, and this is off the top of my head, is relating to if you are an institutional investor and you've triggered that need to sell within seven years, the person who is currently in that home has right of first refusal.

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

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: that's trying to control for the fact that if we are asking these corporations to sell the homes, then ideally, the person who is living there currently would get the right of first refusal. So on the other end of that spectrum, I'm not sure. I can definitely research that for you though.

[Rep. Emilie Krasnow (Ranking Member)]: Yeah. No. It's just something I've thought about. I'm okay with it, but I'm trying to be compromiser and figure out if someone else figured out something around that. I I really appreciate your testimony, and I've done a lot of research on the national bill as well. I've been following that. And I think that the work that folks have done federally as well as the bill that we have before us, it really has so much strength in how much bipartisan support that I saw the way I saw the picture of Elizabeth Warren and Tim Scott, I believe it is, working together. This bill, besides these provisions, has a lot of incredible things in in it, and I'm I'm really excited for the work that the federal delegation did. So you can send them my thank yous.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Happily, you pass that a lot.

[Rep. Marc Mihaly (Chair)]: I guess I have I mean, I know there's other provisions we're gonna discuss. Yeah. Let's talk about the bills around.

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Yeah.

[Rep. Marc Mihaly (Chair)]: Just a couple of thoughts for you. I'm not convinced that the $3.50 is the right number. I mean, I'm just wondering, if you're talking about direct or indirect, what that would mean is that one entity that has interests in, let's say, 20 different developments all under different corporates, you know, one has its own corporate thing, which is the normal way of doing business.

[George Demas (General Counsel, Vermont Housing Finance Agency)]: I

[Rep. Marc Mihaly (Chair)]: mean, about, you know, example, Hula, And if they're gonna build a thousand units Mhmm. At what you know, does that mean that they're in A single family Yeah.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Was gonna say

[Unidentified committee member(s)]: family rent

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: They're not gonna build a thousand single

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: family units.

[Rep. Marc Mihaly (Chair)]: So this is only is only single family units.

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Yeah. Duplexes? Single family.

[Rep. Marc Mihaly (Chair)]: So it's not duplexes, it's fourplexes.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: No, it is specifically building just your regular state built Okay, single family

[Rep. Marc Mihaly (Chair)]: and that they have to sell within seven years. Yeah. So is that an exception? In other words, you could have 500, but as long as you sell them within seven years.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: I think so, yeah. I think that the purpose of that, at least as I understand it, is there was debate around will this constrict developers' interest in building more housing? And I think the argument that both sides landed on in this policy debate is you can still offset enough of that risk by building it, being able to rent it for seven years of being able to use those rents and then liquidate. So I think the purpose here, and again, this is a bipartisan compromise for sure. The White House is very big on this, and that is why it wound up in the legislation. Elizabeth Warren's team and the banking committee, both majority and minority, both came to this conclusion. I know there was discussion around three fifty versus 1,000. There are different numbers. I don't know the details on that as much, but there was definitely conversation around that.

[Unidentified committee member(s)]: Okay, yes. Did you say that it is holding $3.50 and above, you would have to sell the excess above $3.50? So if you had 500, you would have to sell 150 of them within seven years, and I'm imagining you get to choose which.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: That part of it is a good question, what that mechanism is, whether it's the 150 newest that you built or oldest in your portfolio. I don't quite know how that works, so I can absolutely look that up. But I think my understanding is that when you get to three fifty, as soon as you get to three fifty one, you are required to, within seven years, get rid of

[Rep. Marc Mihaly (Chair)]: one of those. What else?

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: What else? Oh, all the good stuff. So yeah, I prepared testimony on all of this. Happy to take questions on any of the sections, but the things that I really wanted to highlight. So first, I do FEMA work as well for Senator Welch. And I think you all are familiar with the Community Development Block Grant Disaster Recovery, CDBGVR. That is something that the delegation had to fight for years to actually get included in the federal budget because it is not currently, permanently authorized. One of the changes in this bill would permanently authorize those funds. So anytime you have one of these major disasters that reaches the correct scale as our 2023 flooding did, that $67,000,000 that's coming to the state of Vermont, instead of us having to work with the Appropriations Committee to get that stuck onto a budget bill, HUD would just automatically be able to send that money out the door to flood impacted communities, so that one's huge.

[Rep. Marc Mihaly (Chair)]: I guess what I mean is before you go on beyond section nine, besides the prohibition on building more than three fifty units, not prohibition, the limitations, is there any tax policy limitations for, in other words, many state bills either outright prohibit ownership of buying houses, lots of houses, or once a certain number of houses, once one qualifies as an institutional investor or private equity investor for purposes of the act, you lose depreciation, you lose none of that in

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: the No. No. Nothing, at least that I know of.

[Rep. Marc Mihaly (Chair)]: Yeah. Did you notice if there are any provisions of the bill that limit state action?

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Not that I can think of, no. I mean, there's limitation on developers, but no, I don't think there's anything that directly would impact your ability to

[Rep. Marc Mihaly (Chair)]: I think that that's really important for us. In so many areas, federal law, the typical thing is the states are doing something and then all of a sudden industry thinks, well, better if we have federal legislation rather than state, and they preempt all the state laws.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: No, think this one is trying to be pretty targeted. Things like it has to be single family homes, they have the number and then the timeline for that process. But I think the target here really was this build direct concept where you have someone coming in and building 500 single family homes, large parcel land, owning a club.

[Rep. Marc Mihaly (Chair)]: Is it new? In other words, what happens if somebody in other words, for example, the testimony we received, like from somebody who's working on this at Rutgers Law School, the examples of Newark and Philadelphia, they're not new. It's private equity buying up 300 used

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: licenses. Right.

[Rep. Marc Mihaly (Chair)]: Yeah. That's not included in

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: that. No. Don't think that this gets a Fed.

[Rep. Marc Mihaly (Chair)]: Okay. Thank you. Yeah. I think that that's Yeah.

[Rep. Emilie Krasnow (Ranking Member)]: Can I say something too? And I think, you know, state versus federal,

[Rep. Marc Mihaly (Chair)]: I

[Rep. Emilie Krasnow (Ranking Member)]: think it's important for states to also take the lead on legislation that works for them. But I am really excited that this is also a federal policy that folks are looking at similar to how I wish that we had a paid family medical leave that was federal, you know, but we can take actions here. But I just I get so excited when I see such collaboration across such cross sections of party for for something like this is is really exciting. You know, senator Welch, I believe, also is a cosponsor of this. Is that correct?

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Yep.

[Rep. Emilie Krasnow (Ranking Member)]: Yep. So I just wanted to highlight that as well. Thank you.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Actually, think in this Congress we are not, we have basically we've sponsored or co sponsored many of the pieces that So maybe that's part of the process here. Road to housing is a whole bunch of different acts. So I think I can't actually remember if we are on this largest version of it, but there are a lot of individual pieces here that we've sponsored in the past and obviously support.

[Rep. Emilie Krasnow (Ranking Member)]: And one more thing, then I see Tom wants to go. Do you hi. Do you have you heard in your capacity as well that I I have that other states as well have been this is very buzzy and people have been talking about it in a lot of other states.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Yeah. I think that that's where the federal action is coming from. It's like there are a bunch of different states, again, both red and blue, this is clearly a larger thing in Southern states where a lot of the Republican members are coming from. But I think that hearing about this from a bunch of different states has led senators and members of Congress to go forward with this.

[Rep. Marc Mihaly (Chair)]: Yes, so just

[Rep. Thomas "Tom" Charlton (Member)]: to follow-up first on Marc's point, it would be difficult for Vermont if a law was in place that preempted Vermont, because three fifty is a high number for Vermont. As far as if somebody wants to come here and build three fifty units of affordable housing, give them our number. Yeah. Okay, that's the challenge, that's Yeah. One of the challenges we're What we're experiencing is, like Marc was saying, private equity buying single family homes. Yeah.

[Rep. Marc Mihaly (Chair)]: Getting everything that you can

[Rep. Thomas "Tom" Charlton (Member)]: out of them, maybe improving them, maybe not.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: So

[Rep. Thomas "Tom" Charlton (Member)]: it's important, I think, for us to be able to calibrate what Vermont does without losing its effectiveness in the federal bill. So for, at least for our contingent in Washington, just to be aware of, 100 homes, 100 homes statewide is one thing, 100 homes are different if they're all in cabbage. That's a different effect on the local market. For the state to be able to right size what we do here, We're just watching for. Yeah, and

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: I think that this is a first crack at a federal policy on something like this, which is why it is pretty targeted at that specific, it's not trying to get too deep into the case that was brought up in Philadelphia buying these units. There is a lot of complexity, and I think that you all will have a better handle on what what that looks like.

[Rep. Thomas "Tom" Charlton (Member)]: So you know just to bring information the other direction, we're one of the lowest states where private equity investment in homes right now, but we are the fastest growing. So they now know we're here.

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Yeah, They're on the radar. Yeah, would like to get ahead of it. Yeah, good enough.

[Rep. Marc Mihaly (Chair)]: So is there anything we have, oh, I'm sorry, go ahead.

[Unidentified committee member(s)]: Yeah, just, I remember in the testimony last week, we talked about a 100 home max. Is that just based on the current bill that you've presented to us, rep Krasnow, and that was based on other states' maximums? The

[Rep. Emilie Krasnow (Ranking Member)]: one that we have in front of us that I introduced was based on New York.

[Unidentified committee member(s)]: And it was at a 100.

[Rep. Marc Mihaly (Chair)]: A 100 plus other thing.

[Unidentified committee member(s)]: But it's a but we're but we are talking apples and oranges in that we are addressing buying single unit homes, whereas this is talking about

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: No. No.

[Unidentified committee member(s)]: Building new. No. Yeah. Halfway there. Let's put

[Rep. Marc Mihaly (Chair)]: it this way, new and used are interesting different issues, each of which should be addressed.

[Unidentified committee member(s)]: Oh, I agree. I was just trying to clarify different buckets in the federal landscape. Federal just deals, but Yes, right. That's the limitation.

[Rep. Emilie Krasnow (Ranking Member)]: Oh, okay,

[Unidentified committee member(s)]: yeah, yeah. The constraints that we're talking about at three fifty are building single family units that you are renting out. In other words, trying to get those into home ownership if they go to three fifty one getting homes into home ownership that would have been rentals. Whereas we're talking about the buying of homes. So the developer who, answering the federal bill, the developer that bills three fifty units and already maybe owns another thousand units is still going to be okay. Because it's just addressing

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: If those thousand units were also built to rent single family homes, then they would be impacted. But if they own a 1,000 unit apartment building and then build three fifty one single family.

[Unidentified committee member(s)]: And it is looked at federally, it's not looked at state by state or- That is a great question that I don't know the answer to.

[Rep. Emilie Krasnow (Ranking Member)]: Yeah, that's a good question.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: What the actual, yeah. My gut, and this is purely my gut reaction, is I'm pretty sure it would be across their entire portfolio, but let me get back to you on that one as well. That's a really

[George Demas (General Counsel, Vermont Housing Finance Agency)]: good note.

[Rep. Marc Mihaly (Chair)]: We do have your stock The whole bill. Yeah, the whole bill. We're kind of constrained for time.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: I was about

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: to say that.

[Rep. Marc Mihaly (Chair)]: Is there anything on this that you wanted to emphasize Yeah, for so disaster before we go?

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: There is that CDBGVR permanent that I think is really important. There's changes to the section five fifteen USDA Rural Development Housing Program, the Rural Housing Service. The five fifteen program is a loan program that was used to build housing. It came with an affordability component like a voucher, and a lot of these loans are hitting the end of their lifespan, and so that would allow whoever owns them to immediately raise the rent on them, or alternatively, the person would lose access to that voucher. What this bill does is sever those two components, so the voucher would stay with the person living there. So what this basically means is if you're living in one of these Section five fifteen properties, and in a couple of years it was going to hit the end of its life, you're no longer going to just automatically lose access to your financial assistance, which is great. There are about 1,800 units in the state of Vermont that that would impact, so that one felt important. On the manufactured housing front-

[Rep. Marc Mihaly (Chair)]: Before you go on for that. So does that mean, let's say I live in one of these units. Yeah. And I have a voucher.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: The voucher is through this program in this

[Rep. Marc Mihaly (Chair)]: case. It's through, which covers the difference between what I can pay, and what had fair market value?

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: It's, yeah, it should be about 30% of your income, it's what you're paying.

[Rep. Marc Mihaly (Chair)]: Right, okay, so it's set that way. Yeah. So, is it that the unit no longer is covered, but I still have my voucher?

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: As that loan from HUD matures and hits that end of its timeframe, currently under current law would no longer get any assistance whatsoever. And so what this change does is mean that you will continue to have

[Rep. Marc Mihaly (Chair)]: the voucher. Does that mean I have to move to another unit? No. I stay in that unit. And when the landlord manages to get me out, that's when they really can bump the rent.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Yeah, but that's important. One other thing that I wanted to flag, I know we're short on time, so I'm just going to try and run quickly. There's a change manufactured housing that's pretty important. It's removing the steel chassis requirement. So I think that basically would automatically lower costs because of all that steel, like 5 or $10 at least. And that's even not talking about the complexity of just building it. So that's good. We'd love to see that finally modernized. There are changes to the home program, the home dollars that come in through ACCD that kind of increase the eligibility threshold for that program. So right now I believe it goes up to 80% of AMI. That'll be expanded to 100% of AMI. That's kind of the first federal change that ICE can think of that's targeting the workforce housing challenge that we talk about a lot. There's a minor language change in there that I think is particularly Vermont specific, which is it also specifies that shared equity homeownership is eligible in the HOME program. We and Vermont should be all very proud of our Champlain Housing Trust and others who have put this model on the map. But anyway, that language is included there. So home dollars can very specifically go to shared equity home ownership. It used to be a legal gray area, but that's resolved. Last one is there's also this new innovation fund, which is actually two more, dollars 200,000,000, which is across the entire nation. But it's specifically going to jurisdictions that demonstrate measurable increases in housing supply through zoning reform, such as reducing regulatory barriers or accelerating approvals. So it's very specifically focused at trying to encourage communities to update zoning rules, encouraging states to update zoning rules, which I feel is relevant for all of your conversations, yeah.

[Unidentified committee member(s)]: Is there a window when they want to see this?

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: As far as I have understood it, HUD is going to have to actually lay out what these new programs look like. But my understanding of this is the states are going to make these changes, and then this is basically a reward for doing that. There is also- they're adding a second fund, is supposed to help Yeah, exactly. So there will be funding available to help with the technical assistance part of that, which I Can think is

[Unidentified committee member(s)]: I also ask one question about the emergency stuff? What are those dollars? What kinds of things can they cover? I'm thinking about resiliency efforts. And I'm also thinking actually about education and communication of emergency situations and how we've run into problems accessing dollars now post COVID to do translations or make sure that there's going to be accessible emergency.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: So off the top of my head, and I think talking to someone at DHCD would probably be the best bet because they're currently administering the CDBG VR funding that the state has. But it's going to housing projects. I'm fairly certain it's going to flood mitigation projects and stuff like that. It's pretty flexible, is that. Let me stipulate that. The actual what the dollars can go to is pretty flexible. HUD did tell the state of Vermont, you have to spend a certain amount in Lamoille County and Washington County and the Northeast Gang. They constrained it that way, but what the dollars can go to, I think, is fairly flexible. CDBG generally is a pretty flexible program. I'm not as sure on the communication side. But one other thing that I want to quickly talk about is the other thing that this bill does is streamlining NEPA, the NEPA process, so that environmental review. Basically, there are two kinds of changes here. One of them is meant to reduce duplication. So if you're applying for multiple federal sources of funding, you don't need to do NEPA and then six months later do NEPA again, which seems like a no brainer. It's basically saying, if you've done your environmental review, you've done your environmental review. So that's great and really should speed up the process of housing development. And I think the other thing in here that felt important is it would also streamline NEPA. So it adds additional categorical exclusions, and that is specifically saying if you are trying to do infill development in an urban area, you won't have to do the NEPA process anymore, as well as for small scale housing development. So duplexes, triplexes, quadplexes. So both of these are meant to kind of reduce the regulatory burden of environmental review in kind of specific ways. So, yeah.

[Rep. Marc Mihaly (Chair)]: Well, thank you so much.

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Absolutely.

[Rep. Marc Mihaly (Chair)]: I appreciate, Miles. Appreciate your coming.

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: Yeah, and happy to talk about any of the rest of this bill anytime.

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

[Miles McDermott (Outreach Representative, Office of U.S. Senator Peter Welch)]: I was gonna say happy to talk about any of the provisions in this bill anytime. I prepared on kind

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: of all of them, but I know they've got more interesting things to say on the Vermont side. Thank you. You. Peter, come on up.

[Peter Trumbly (Vermont State Treasurer)]: Hello, for the record, Trumbly, I'm the state treasurer. Thank you for the opportunity to testify on H-six zero seven. I shared this bill with a few different treasurer's associations nationwide for a little bit of feedback from folks in the financial industry and folks who are aligned with the treasurer's vision of investing in long term growth. And I want to say at the top, we're broadly very supportive of this effort and appreciative the committee is taking a look at it. Housing is so fundamentally critical to Vermonters standard of living and their future prospects. And we want to make sure that it exists to serve their needs. I'm going to offer a few high level thoughts on the bill and some suggestions for areas with the committee, but I want to make sure they focus their attention. I think broadly, it would be beneficial to make sure that we're not in any way restricting useful capital that can help create or restore or rehabilitate housing in Vermont. I think largely this bill sidesteps that by not outright banning the building or purchasing of units, but rather setting these waiting periods and tax implications. A few areas where the committee might want to focus in the future, specifically on the tax provisions, the committee may want to consider looking at restoring partial or whole deductions for cases where capital provides useful rehabilitation of housing units or improvements to housing units. I think about aging in place improvements or code remediation, etc. Vermont is one of the oldest housing stocks in the nation. And if there's capital that's available to make sure that our units aren't going off of line, I think we would want to incentivize that where we could. The definition of covered entity in this bill is rather broad. That may be appropriate, but I'm sure the committee will take ample testimony from developers and investors to ensure that they're not restricting useful capital. But given that the definition is so broad, I think that that's going to be an important area of focus for the bill. I think having the deductions, tax deductions be restored if properties are sold to owner occupants or mission driven affordable housing entities is excellent, I appreciate that. Considering a narrower tax penalty or tax benefit for cases where vacant properties are taken over and then brought into productive use should also be a consideration for the committee as it takes a look at this. Those are, you know, just some broad thoughts. Appreciate the opportunity to testify on the bill. I'm happy to answer any questions.

[Rep. Emilie Krasnow (Ranking Member)]: I'll just say, I I really appreciate your suggestions and I think that will really strengthen the bill. We also heard from the bankers association that talked about foreclosure, and I think that's another flag that should be tweaked as we move forward, but I I think that your suggestions are are really helpful. So I thank you.

[Peter Trumbly (Vermont State Treasurer)]: Thank you, representative.

[Rep. Thomas "Tom" Charlton (Member)]: Does it occur to me that our up and coming land bank might actually at some point own more properties than the threshold we've assigned here. So, yeah, we would wanna

[Rep. Emilie Krasnow (Ranking Member)]: They're they're excluded

[Rep. Marc Mihaly (Chair)]: in It's the a specific Yeah. That well, the land land trusts are are land banks. Yeah.

[Rep. Emilie Krasnow (Ranking Member)]: Yeah. Land bank. The word.

[Rep. Marc Mihaly (Chair)]: Yeah. And nonprofits. And nonprofits. Yeah.

[Rep. Emilie Krasnow (Ranking Member)]: Yeah. They're excluded.

[Rep. Thomas "Tom" Charlton (Member)]: But yeah. Thank you for drawing that distinction between rehabbing properties if you do have need of And

[Rep. Marc Mihaly (Chair)]: what

[Rep. Thomas "Tom" Charlton (Member)]: typical private equity approach is to figure out at what point, over what length of time can they squeeze more money out of something, squeeze it to death and then walk away. If they can make more money doing that and holding the same piece of property, that's their approach. But then you have other developers, contractors, renovators who are coming in, picking up the dilapidated building that they already have. Sometimes they're flipping it and they're just doing cosmetic stuff, so it'll sell quicker. But if there's some way they want to incentivize, know, rehab that is paying attention to the essential hardware of the building that that may separate one group from the other. But some anyway, to distinguish between, you know, the group that's just there to take much money out of leave versus the one that's there to rehab it and put it back on market. Yeah. Any ideas on what that is to how to define those two approaches would be different?

[Peter Trumbly (Vermont State Treasurer)]: Yeah, think that's something that probably the HDD could offer a lot of assistance on talking to the developer community, likely offer a lot of assistance there. Very appreciative of the committee's concerns around private equity. This bill, I think, is really covering pretty much any full time real estate developer or institutional investor. You're looking much more broadly than these sorts of predatory firms that are, I think, the greatest concern. And so making sure that there are avenues there for actors that are providing genuine value in our housing stock is, I think, going to be very important.

[Rep. Marc Mihaly (Chair)]: Questions? Peter, I Go think

[Rep. Emilie Krasnow (Ranking Member)]: ahead. One more thing. I just to what you're saying, I agree. I think my absolute intent that I've talked to people about is the largest people, and, the last thing I would wanna do would be to harm any sort of development or people putting units back online or things like that. So I think I appreciate your understanding of the intent, and I hope that we can continue to work together and with experts in your office. I I know that the treasurer has done an incredible amount of work on housing and really is a top priority in your office. So I appreciate continued conversations.

[Peter Trumbly (Vermont State Treasurer)]: Thank you, representative.

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Thank you.

[Rep. Marc Mihaly (Chair)]: Yeah, Peter, think, let's put it this way, this is a comment by me. I think that the financial expertise in your office and your content, your experience that you have because of the 10%, soon I hope to be 12%, you know, because of the contact that your committee, the LITEQ, what's it? LIAC. LIAC has with developers, we might look to you in the immediate future to solve some, I mean these are significant definitional conundrums. One relates to size, we hear various elements of the real estate community saying, don't make it too small because you don't want to capture too much. But in fact, the studies that are being done that we've heard about elsewhere, like in Newark and Philadelphia, indicate that most of the private equity there, there are small local private equity that are investing in 200 units or less. There's lots of them and together they own 25% of the pound of the stock, but they're not big, so that's one conundrum. The other is, what Tom was just alluding to is, how in the world we differentiate between someone that's just a good company that walks in, buys a house or houses, and brings them up to code, sort of like Vihaly, but for single family houses, and then returns them to the rental market or the ownership market, versus these kinds of predatory practices where they come in and do what looks like very similar activity, and the only difference is that they want to get their money out in five years or three years or whatever, and so they evict people and raise the rents, etcetera. And I have to tell you, I'm not sure what the solutions to these two problems are, but if your outfit has any thoughts about it, we'd sure like to know about them, either direct communication to us or through testimony.

[Peter Trumbly (Vermont State Treasurer)]: Certainly happy to continue thinking about it, continue being helpful wherever we can.

[Rep. Marc Mihaly (Chair)]: Okay. Thank you. Any other questions? Okay. Thanks a lot.

[Peter Trumbly (Vermont State Treasurer)]: Thank you all.

[Rep. Marc Mihaly (Chair)]: George Demas is with from BHFA. You are with us, right? I am here. George, have you testified here before? I have not. Let's introduce ourselves to you. Gayle, you wanna kick it off and?

[Rep. Gayle Pezzo (Member)]: Gayle Pezzoille, District 20, Colchester, welcome. Hi. Mary Howard, I represent Rutland City District 6. Hi. I'm Elizabeth Burrows, and

[Rep. Elizabeth Burrows (Member)]: I represent Windsor 1, which is Heartland West Windsor in Windsor. I'm sitting right here. I'm with us electronically.

[Rep. Emilie Krasnow (Ranking Member)]: Representative Krasnow, and I serve South Burlington Chittendenine.

[Rep. Marc Mihaly (Chair)]: Well And Saudia is right there.

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

[Rep. Saudia LaMont (Member)]: Saudia LaMont, LaMont, Milwaukee, Washington District.

[Rep. Marc Mihaly (Chair)]: Hello. Thank you. And I'm Marc Mihaly, and I represent Caledonia, Plainfield and Marshfield.

[Rep. Ashley Bartley (Vice Chair)]: Ashley Bartley, I represent Fairfax and Georgia. Leonora Dodge from Essex Town, the city of Essex Junction.

[Rep. Thomas "Tom" Charlton (Member)]: Tom Charlton, Athens, Chester, Grafton, Windham.

[Rep. Deborah "Debbie" Dolgin (Member)]: Debbie Dolgin, and I represent St. Johnsbury, Concord, and Kirby. George, tell us your name for the record and take it away.

[George Demas (General Counsel, Vermont Housing Finance Agency)]: My name is George Demas. I'm the general counsel for Vermont Housing Finance Agency. We had sent in a memo with some comments on the draft bill that we saw a little while ago. I don't know if there have been any significant changes since then. And I think our concerns generally are similar to what I've been hearing I was hearing in the prior discussion, making sure that the covered entity definition doesn't cover too many people who make it over broad. So we had suggested that the definition specifically exclude agencies and instrumentalities of the state, such as VHFA, because we do every once in a while end up with ownership of buildings from time to time. We also and there are other entities like BHCB who might be in that position as well. It depends on, I think more than anything else, how deals work out sometimes. The other is to and this was a I know you guys were talking about this excluding entities whose primary business is buying and reselling properties after rehab. You know, we put a fairly general set of language on that. I think it might be a matter of maybe for the tax department to figure out the rule on that, or ACCD to help figure out the rule on that as to what that means. But, you know, I think we're all interested in making sure that our older housing stock gets the work that it needs. An exemption from the ninety day waiting period for purchases out of foreclosure, since those are such structured arrangements anyway with their own notice requirements. And it's all judicially governed. And then finally, just a provision to make it clear that if, for whatever reason, somebody sells their house to somebody who shouldn't be buying it in that particular circumstance, that the house sale will still go through for that particular homeowner. But there may be repercussions for the buyer, but that the homeowner themselves isn't necessarily affected, or that it somehow create some sort of title issue down the road. So those were sort of our four areas that we were commenting on. Like I said, it sounds like we're not picking up on anything other people aren't picking up on. But if you have any questions, I'm happy to.

[Rep. Marc Mihaly (Chair)]: Questions for George? George, I can't help myself. I have questions. First of all, again, we would like to lean on your expertise. Mean, there there's some actually rather difficult definitional issues that we're gonna have to kinda parse to make this work. One thought I have, you know, I don't know if you heard the testimony, but we had a representative of Peter Welch's office testifying on the federal bill

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

[Rep. Marc Mihaly (Chair)]: Which said basically that someone has to it focuses on new housing and says, you basically have to sell it within anything over three fifty units, you have to sell within seven years. And, I am really wondering whether the opposite isn't the problem. I mean, it seems to me that the business model of a lot of these private equity predatory purchases is, in fact, get out quickly to own it for five years, three years, squeeze everything you can, you know, and then turn it over. These are sort of unofficially perhaps closed end funds that they've got people buying into on the promise that within, let's say, five years or even less, they can sit you know, they can they can get their money back plus a return. And so I'm wondering whether, in fact, what we ought to say is that if you're a covered entity, you have to hold the housing.

[Unidentified committee member(s)]: Certainly, yes.

[Rep. Marc Mihaly (Chair)]: Have you given any thought to this?

[George Demas (General Counsel, Vermont Housing Finance Agency)]: Well, I think that then you are dealing with issues of ongoing investment, right, and making sure that in the the, I mean, if you're truly talking about people who wanna squeeze as much as possible out of the unit, right, and you make them hold it for extended periods of time, then they're going to squeeze, but they're not going to reinvest in the unit as much. So I would be concerned about taking away the back end, from them. And I do agree with you that while house values are going up, then you're probably right. They'll buy it. They'll spiff it up a little bit. They'll rent it for a few years, and then they'll sell it. Or at least that's what they'll wanna do based on projections of increased, you know, valuation. How that works in a market that might not be working that way, if we go back into the Great Recession, that's a whole other other story. But yeah, I mean, I understand your point. But I think that then you would need to think about what do you how do you make sure that these houses just don't end up back as being trashed, because the investors don't want to put any money in.

[Rep. Marc Mihaly (Chair)]: Of the things we heard that you might think about, again, you know, I appreciate your written testimony, and what I like about it is that it's actually thinking about solutions rather than just telling us what the problems are, which is one of the legislative realities we live with. But, you know, the reality is, I think what people are really concerned about is a certain behavior, not a pattern of ownership. The reason that they go to the pattern of ownership is because it's linked with the behavior, But one of the ways that we could deal with this is through, you know, through going at the behavior itself. I'm just not sure how to do it, and I wish you'd think about it. That's all I'm saying. Yes, Emilie.

[Rep. Emilie Krasnow (Ranking Member)]: Thank you so much, George. I was privy to seeing the memo, and I let your organization know personally from my view that I like and appreciate everything that you your organization had to offer and agree with those suggestions. And as our chair mentioned, I appreciate you coming to the table with suggestions, and they were excellent. And so I agree with them a 100%. I want to let the committee know that couple years one of the first things that I did when I first heard about what this issue was was reach out to your organization to see if we had the data because that's what your, you know, your organization is is the go to for for data when, you know, our committee and other things. So I'm really grateful for your suggestions. And if the bill moves forward, I personally would agree with all of them. So thank you very much.

[George Demas (General Counsel, Vermont Housing Finance Agency)]: Thank you.

[Rep. Marc Mihaly (Chair)]: Other questions of George? George, you were gonna say something? No. You should have been volunteer an infinite amount of your time to help us, right? Anybody else? Questions for George? Again, thank you. Thank you. Thank you

[George Demas (General Counsel, Vermont Housing Finance Agency)]: very much, and I look forward to the continuing discussion on this.

[Rep. Marc Mihaly (Chair)]: Great. Our next witness is Austin Davis, who is sitting right here, Austin, you want to come up and talk to us?

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Good afternoon. Happy Saint Patrick's Day, folks. I'll agree. For the record, Austin Davis, director of government affairs at Royal Champlain Chamber. I appreciate this bill being brought forward and the intent to protect for individual Vermont home buyers. You know, and I think, we're living in a crucial time right now where housing is the most important issue to Vermonters. I think folks probably have seen, but I can't help, but the messaging discipline in me wants to just say that a recent poll found that 83% of Vermonters said that there's not enough housing available in the state. 75% said it's incredibly important that you folks address that housing supply. 60% say high housing costs, temporarily impacted their own ability or their ability of someone in their community to rent or buy a home. And among voters 45, of which I have won, 60% ranked housing, that's a top issue, nearly double that of healthcare, which I know you folks have all gotten a lot of constituent correspondence on. That's the 45.

[Rep. Marc Mihaly (Chair)]: Yeah, that's right. Of course, we care about health care. But

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: I think all this is to say, housing is the issue at the moment. I appreciate all the work this community does on housing legislation that you've already passed this session and the previous session that you've worked on. We very appreciate what's had. And I understand from testimony that this hasn't necessarily been shown to be an immediate dire pressing issue for Vermont right now, this specific issue that this bill's looking to contend with, but it's a growing issue and haste is tasting it. So I think it's really wise that you folks are getting ahead of this. Don't I think we see that enough in this building, frankly, where folks get ahead of this and monitor the situation. I think luckily it seems like you have the time to monitor the situation and the time to work on solutions that are correctly scaled to Vermont. So, commend you all on that and your vision. All this to say that I think I haven't really seen that this is necessarily an issue in Vermont and I don't really necessarily have much to bring to this conversation other than just some general caution, some of which I think you've already heard. I think we need to do more work on the supply side of things. And I think that I've heard caution around this table that whatever's done in this piece of legislation that potentially moves doesn't affect our ability to get at that supply side. I think since you said it, if someone wants to show up with that much capital and build that much housing, I think we want to see that. Think that there's a lot of, yeah, it's a great problem to have. May we be blessed with that problem sometime soon and then figure out how to deal with it. But I think you heard from the bankers last week, and I think they had some really astounding points around the ninety day threshold and foreclosures. I think it's worth working really hard to grapple with that definition conundrum, specifically around scale. I think these numbers of 30,000,000 in assets, 10 plus residents and pooled fundings, while they might look relatively big, they are relatively small when you think about what the capital stack is for creating just even 10 units of property and how folks have to cobble that together from different spaces, whether that be traditional lending institutions, non traditional lending institutions. I don't want to see something that pulls in home builders and certainly don't want to see anything that pulls in some of our mom and pop landlords. I mean, our state department of housing community development is actually hosting, and I've got friends and family that have attended these sessions on how to kind of become a landlord and take on properties and revitalize these properties. 10 might seem like a lot, but it really isn't. And some of these things, while the language around pooling is obviously meant to bring in large hedge funds from out of state, Families pool together resources as well too, and so do members of the same community, so do friends, in fact, they need friends. So I don't want to see that pull down. I think you folks have hit on some of the issues that immediately kind of crossed my mind when I looked at this, the building versus buying kind of conundrum. Hearing you work through these and seeing how the federal legislation's kind of more tailored to the building side of things. I think you're right in worrying more about the buying side of things. I think that there's a difference and the difference is not always of the choice. I know of a developer who built a substantial amount of property their first foray into building on their own, and they did it in 2007, and then they couldn't sell anything in 2008. So some of these folks that are building to sell, they can't control the world global economy and they might end up building to rent and it's not their choice at all. So, and then there's that finite period between building and selling where do they end up being an institutional investor at that time, both lenders are trying to offload the properties to individual home buyers. We've seen developments like that locally here where it's a substantial number of homes brought to the market all at once with them individually being sold off one by one. You don't wanna

[Rep. Marc Mihaly (Chair)]: Actually, see there's a real problem there. Again, I hate to lay on the table for you problems to think about, but we really have to do something here, but we have to do it wisely. One of the things, I used to represent cities and governments that were opposite developers negotiating development agreements, and one of the things we looked for was quality developers. One of the ways you can tell a quality developer is when they decide that they like to build and hold. In other words, they build their and they have enough confidence in what they build, that they just keep it and rent it out. This is true of office buildings, it's true of all kinds of products. It can be a sign of a good thing, not a bad thing. To to last. To build to last, and this is our business, we want to do this, and we'll stick with it. They tend to build better product, So there's, I mean, it's just another issue.

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Well, and you don't wanna inadvertently take away flexibility too, because when you tell someone you're going to do this and it needs to be like this in perpetuity, or if you make this change, also you fall into a different covered entity definition. That can scare away capital because folks wonder, worse comes to worse, what can I do to get out of a situation that there's no exit, that you're removing exit ramps? You might inadvertently pull away good actors who just don't want to take those exit ramps or might have to if the economy changes, if the project changes, etcetera. So there's always that to take into consideration. I do also just kind of, I think it's a broader conversation just around the market bifurcation that can happen here. I understand carving out nonprofit developers and nonprofit housing entities from this, but does that create a situation where capital is going to the nonprofit entities into this affordable housing and then capital is going to the higher end and the more expensive housing and we just continue to create the problem with the missing middle in the state? I at a certain point too, if you're thinking that a covered entity can get too big and have too much housing, if that's the premise of this, can a nonprofit get too big and have too much housing too? Mean, these are all just things to grapple with and there's no easy answer. But we do have quite the missing middle problem, frankly, everywhere in this state. I say that in terms of every, we actually, we've done work in focus groups with young professionals through our program, Burlington Unprofessionals. We ended up calling it, before missing middle was a thing, the opportunity chasm. We just kind of see opportunity chasms everywhere. And they generally hit young professionals when they're trying to make all the major life steps going from entry level to, in The States, hey, it's entry level or executive level. It's renting or owning an expensive home. You know, and then in that time also, they might be trying to do the other expensive things, pay off student debt, start families. There's a missing middle problem everywhere.

[Rep. Marc Mihaly (Chair)]: Take care of their parents. Take care

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: of their parents, yeah. So I think that there's just that issue and everything and I'd hate to see, as we kind of try to pick winners and losers to some extent and to some extent rightfully so and understandable winners you wanna pick following that opportunity, gasp. One thing I was confused on, it's more question than anything else, is just the enforcement of the legislation. I understand that this falls under the Consumer Protection Act and it's unfair competition. But it's kind of a big regulatory layer, like who's verifying these entities at the time and and who's monitoring the ninety day listing compliance. These are all things that can be worked out, but it is something that good actors are going to follow to the letter of the law and bad actors might not. So what's preventing the bad actors from moving and the good actors from diligently following that? It could create a cloud over titles. And as I think other folks have indicated, it could negatively impact individual home sellers who are trying to move quickly when everyone's trying to really strictly do due diligence because they're good actors. Well, again, the bad actors aren't doing that strict due diligence. So it can spoof lenders and title issuers and slow down the market potentially if there's not a clear regulatory regime. Certainly support the comments that were made by the treasurer's office on carve outs for useful outcomes around depreciation, such as restoration, especially for the vacant and blighted properties. Think that's something we all ubiquitous to kind of agree upon. And yeah, I think largely you folks are asking the hard questions and grappling with them, being thoughtful with them. Just like I said, the slight luxury of time here, I think to address this. And we might have to address this in the near future, but at least we're having conversations preemptively. So I'm happy to be a partner as things move and keep assessing the

[Rep. Marc Mihaly (Chair)]: Emily, are you putting your

[Unidentified committee member(s)]: hand up?

[Rep. Emilie Krasnow (Ranking Member)]: I do. I really appreciate your testimony, Austin, and as one a city that's in your membership, I like collaborating with you and hearing, from your members and and your perspective, and I think everything you said is right on and things we need to consider. You know, I consider myself in a missing middle kind of person, and where I represent part of South Burlington is a lot of that as well. And so I think that's an important flag. I also agree with you, and I know your organization and others have been like, you know, is this let's say we pass this bill tomorrow. Would it solve our housing crisis? Absolutely not. There are so many more important things that this body could be doing that I wish we were doing that would help. So I appreciate you know? But I like your compliment about getting at things early and having these discussions because in ten years from now or if we have another, you know, something can happen. I think it's important that as the legislature, we're proactive, so I appreciate you highlighting that. And I have one request in I know you're a big networking guy, and you know a lot of people. If and I have this request to a lot of folks. If you do meet someone who again, the criteria for covered entity is subject to change based on policy decisions, and I think it should be now that I've heard more testimony. But, please, if you do meet folks that do meet that criteria and would like to come talk to us or even just you know, if I would love to meet them. I know that it's not considered a huge problem in Vermont right now. But if there are folks in your network that you have met that do meet that criteria, it would be really helpful. Or if anyone's listening, if they wanna come talk to us and and talk about their portfolio, their capital stack, I think it could be really helpful. I in my research, I learned a lot about capital stack and other things. So thank you. And, yeah, if you happen to meet folks along the way over the next course, that wanna come talk to us, that'd be so helpful.

[Rep. Marc Mihaly (Chair)]: Yeah. I mean, I think, specifically, we're probably gonna have another draft. When you get the draft, get it out there to your folks. What we want to hear from is someone who says, wait, I don't want to be covered and here's why. You know, we have to it's gonna be like that. Yeah. No matter how much, know, what are we unless we were simply to designate one human being in the state saying, Oh, I know it when I see it, it's that, we're gonna have to come up with criteria, so.

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Yeah, I think there's just always a concern of covered entity definitions like this. And I think also just entities that have a very diversified portfolio and might have over 10 units for the sake for numerous reasons, but then also have $30,000,000 in assets, but those assets are not actually directly deployed towards housing at all. I'm thinking about some larger employers that might have some housing that they use for their employees who are transitioning or seasonal employment housing or things like that. That's an interesting, I understand that there's folks who are wondering about the definition before. I think there was people misconstrued as an or on all these things, that it's

[Rep. Marc Mihaly (Chair)]: an and.

[Unidentified committee member(s)]: That's what I was just about to I was like, it's But

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: I'm here to say and can be working in the opposite direction. And can mean actually that it pulls in people who have nothing to do with institutionally investing in housing. They just have assets and have houses, and now they're in it. I wonder about that too. So like if there's a way that we can reconfigure the definition of a covered entity so employers providing housing doesn't necessarily accept or fall into it as well, you know, That'd be interesting. Great. Any last questions? Austin, thank you.

[Rep. Emilie Krasnow (Ranking Member)]: Thank you so much, really helpful. Thanks, Austin.

[Rep. Marc Mihaly (Chair)]: Okay. At this point, I I think

[Unidentified committee member(s)]: just like, on the record, I'm just wondering aloud. I think that hearing the testimony from the federal perspective about kind of giving a time limit of being able to rent, you know, what I know that that's talking about building, but I would not be opposed to having that kind of a window of an allowance, because I think that even in the discussions, like what you just brought up, Austin, about the employer owned housing, I still have this sense that those projects, the businesses that I spoke to that were interested in considering building rental housing for employees were not interested in being in the business of managing rental properties. And if they had some window whereby it becomes condo ized, like the building, rather than perpetually being a rental, then we're putting some kind of barrier to displacing homeownership, and if anything, we're encouraging it because now we've created a partnership, a public private partnership that got the places built, that got employees into the workforce. And sort like they would fall under the federal program, but your fear that they would be banished from owning to mine units. I think if we set some kind of parameter of a window of time by which you would want to put those homes back into home ownership.

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Well, what are the other broader questions of depreciation on that resource. If they're doing something the state wants to see, I think it all gets really tough. I mean, all of these things are really weedy or we'd have to Could answer right

[Unidentified committee member(s)]: you speak up Specifically, about the depreciation? In other words, they want to be able to get a tax break from the depreciation?

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Yeah, I mean, that's kind of

[Unidentified committee member(s)]: I just want to state it for Republic.

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Into the cost of that and you know, depreciation's there for a reason, the asset does depreciate over time.

[Unidentified committee member(s)]: Although in this market, real estate doesn't tend to depreciate, tends to appreciate, right?

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: Well, the underlying physical asset requires operation and maintenance costs. So you don't want this person letting it fall into decay. And that's what that's really in the tax code to offset. So I mean, I think, but there also is the broader question of like, yes, it's a public private partnership. There might also be situations though where that housing is on a rotating basis. Like I know of employers that use that housing they have in their portfolio as a landing place and then the person leaves it when they found their forever home here. And then there's folks who contract with folks seasonally. I have a neighbor who actually has a long standing contract with one particular business where folks come in and they stay there for three months increments of time while they work on special projects and then they're out. There's actually great neighbors to have a property there. Things like that. There's just infinite possibilities of how folks

[Rep. Emilie Krasnow (Ranking Member)]: Is that a single family house that they do it out of?

[Austin Davis (Director of Government Affairs, Lake Champlain Chamber)]: That'd a multi unit. I

[Rep. Marc Mihaly (Chair)]: sometimes wonder, and I really don't know how to do this. An example of blamphered behavior rather than the nature of it would be to say, for example, if you're a covered entity and you acquire a house, you can't raise the rent for twelve months, for example. In other words, the testimony is that this is associated with increased evictions and rents going up, or maybe we attack those specific things in some way, rather than just deal with a covered entity problem, unless we're successful in dreaming of solutions to a covered entity. But I don't know. I'm not wedded to that at all. I'm using that more as an example.

[Rep. Emilie Krasnow (Ranking Member)]: It'll come to it'll come to you in a dream, and you'll you'll have the perfect solution, Marc.

[Rep. Marc Mihaly (Chair)]: Better. But what do you mean in assuming I sleep through the night. Yeah. Alright. We're gonna take a break. It's 03:15. Cameron's going to be here in the next two minutes. Well, let me ask you, guys, everybody. Hello. We can take a break now. Ten minute or less bio break if people need it. Okay, I'm seeing people. Let's go. Let's go offline,