Vermont Legislature SmartTranscripts:

[Marc Mihaly (Chair)]: Welcome everybody to the House Committee on General and Housing. Today is Thursday, 05/07/2026. And what we're gonna do this morning, we've been in the last few days, we've been looking into housing targets, housing numbers. What we're gonna do this morning is hear from UVM, I hope I'm saying this right, researcher, a faculty member who's written an interesting article on housing, the relationship between housing supply and housing price. But I think the first thing we'll do is introduce ourselves to you, Joe, just the committee. You wanna take it away? Yes. I'm Debbie Dolgin, and I represent St. Johnsbury, Concord, and Kirby.

[Thomas "Tom" Charlton (Member)]: I'm Tom Charlton, Athens, Chester, Grafton,

[Joseph Parsons (Member)]: and Windham. Joe Parsons, Mingbury, Thompson, and Garoille.

[Leonora Dodge (Member)]: Leonora Dodge, Essex Town, CMS Extension. Ashley

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

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

[Emilie Krasnow (Ranking Member)]: Emily Emily Krasnow, South Burlington.

[Gayle Pezzo (Member)]: And

[Elizabeth Burrows (Member)]: Elizabeth Burrows, Windsor one.

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

[Marc Mihaly (Chair)]: So, Joe, before you introduce yourself and take it away, I don't think you should assume that everybody in the committee has read your article. Wow. They've read about your article, and I have read portions of your article. And this is the committee, in addition to labor and other miscellaneous issues, really this is the committee that focuses on housing, and a lot of housing legislation comes through us, and we're very interested in the subject of relationship between housing supply and the housing targets, which are very aggressive, and housing affordability. And that's one reason why your work caught our attention, and I really appreciate your taking time out of what I imagine is a pretty busy teaching and research schedule to spend time with us. And I guess I would request that my look at your article is you had a lot of observations about what I would call your perceptions of the limitations of the classical economic model that simply increasing supply increases demand I mean, increases results in reduced price. And then there's your very detailed work in Burlington, and I think we're interested in hearing from you on both. And I look forward well, the committee is very active and we'll generally just insert questions as they occur to us. So, take it away.

[Dr. Joe Ament (University of Vermont)]: Thank you, I appreciate that. I did read the intro notes. So if I have to say, I'm Joe Amant. I'm an I'm a professor at the University of Vermont. I appreciate you all inviting me here. This is great, and it's an honor to chat with you all. Am I able to share my screen? Or or I know I'm able to. Can I be allowed to?

[Ashley Bartley (Vice Chair)]: Go ahead.

[Marc Mihaly (Chair)]: Please do. It happens all the time. Some of us, but not all of us have printed versions, but I think it would be good if you did share your screen. We have a number of people online. Great. Okay. Oh.

[Dr. Joe Ament (University of Vermont)]: Sorry. I this is I don't know what it's okay. Is there an okay? Okay. It doesn't look like it's letting me. Oh, here we go. Okay. This should work. Does this work for you all?

[Marc Mihaly (Chair)]: Yes. Uh-huh. It does. It's just we see housing prices are high.

[Dr. Joe Ament (University of Vermont)]: Well, that's pretty much the extent of my talk. So I I guess I sort of went into this with this idea. Alright. Housing prices are high. The common assumption is that means there must be a shortage. And then from there, it is assumed that more houses will decrease prices. Well, I was just sort of wondering, and and I'm not a politician. I'm a scientist. So I just wanted to know, like, could it be something else? Could high prices be a function of something else? And if would adding more prices reverse or adding more houses reverse this price dynamic? So they're sort of like I'm just looking at some of the assumptions that are built in. And this is a big question. I know this might be contentious, but do we want housing prices to decrease? I think broadly people tend to say or at least what I hear is they say we need housing prices to come down. But if housing prices come down too much, we'll have a global financial crisis. Is it so the entire world is talking about this. You don't need to decrease housing prices too much to have a a financial crisis. That's not to say that I don't think housing prices should decrease, but there is a fear there that there's a major economic catastrophe if if they drop too quickly or too fast or or or too low rather. So then I really see this as two problems, to be honest, and this is what the the seventies article didn't perfectly cover, although I think they did a wonderful job. I see housing prices being high and maybe a lack of of housing being two problems. And there's sort of an assumption that they're related. But first of all, I'm not sure if we actually need housing. So that is a question that I wanted to engage with. But we could ultimately build homes to address a shortage and address a shortage assuming we do have a shortage without addressing price. Right? So this idea that they're related, it they may be and they also may not be. And then also why do we think we have a shortage? When I talk to people and say, well, why do you think we have a shortage? Oftentimes I hear because prices are high, which is just an assumption that is just like sort of a logical leap that is made. I also hear vacancy rates are low as why we have a shortage. We also if you look at vacancy rates and correlate them to rent prices, that's not actually a really consistent driver. So vacancy rates and house prices as a proxy for a shortage is just there's not really data there and theoretically it's actually got some holes in it. So I just wanted to kinda look in to what was going on in Burlington specifically. Now, I should caveat this with when I did my research, I just wanted to know what was going on in in single and two family, like, duplex homes in Burlington. So this doesn't really get into rents rent prices and it doesn't get into condos and apartments. This is single family homes. I think we can discuss where those, where there are connections. But essentially investors tend to pay with a lot of cash. This is what we find in our studies.

[Marc Mihaly (Chair)]: Yeah. Yeah. Was gonna go.

[Ashley Bartley (Vice Chair)]: Yes. Sorry, Joe. Just a quick question. I I I'm making assumption that you chose Burlington because it's nearby. That's where UVM is. Am I assuming correctly or is there a

[Dr. Joe Ament (University of Vermont)]: No actually, the reason I chose Burlington is Burlington has a Burlington property database that is incredibly accessible. Burlington also has all of their closing documents on Us Land Records Dot Com and many cities within Vermont do. But Burlington's US land records that has closing documents are really easy to overlay with the property database so we can get a really robust understanding of the entire market. That's why. Great. And it's Burlington. It's you know the biggest city and there's a lot going on here. But it was mostly because the data is the absolute best that I I started looking at a lot of different municipalities and Burlington which is by far the best data. And and one of the things that I will I will add right now since you asked, there's never been in in in the world that I know of a study that actually looked at longitudinal, so every single sale across a twenty year period by understanding down payment. It's really hard to understand how much was put down. We can look broadly and get these big macro statistics of down payments are increasing nationally. But no one has ever been able to pull every single mortgage document for a twenty year period. So that that is what's really interesting about this and also why I chose Burlington because I'd be able to do that. Is that okay?

[Ashley Bartley (Vice Chair)]: Yeah. Thank you. I just I wanted to make sure I understood.

[Dr. Joe Ament (University of Vermont)]: That's great. So we see that investors pay with a lot of cash. Half cash on average moving around a lot. And this is just what I'm showing you is just something I showed to make it easy to understand. I have the actual graphs that are more perfect. As investors increase in the market, going from about 1% in twenty two thousand three to about 20% of of single family home purchases in 2023, we see that prices rise. And a large piece of that is investors are able to put down a lot of cash and then avoid interest payments on a mortgage. Which means that they're able to save that interest payment and put it into a higher bid on a home. So as investors were increased in the market, see prices prices are rising. There's also another piece of it based in some economic theory that investors are always hoping for a sale an increase in in the future when they sell a home, and they're able to cover their costs through rentals. So there's a lot of confidence in investors and they're able to weather a slightly higher price because they know that if the economic situation maintains, they'll be able to still have a a return in the future. So we see prices start to rise. If incomes are steady, they have been in in in Burlington and broadly in Vermont, if incomes are steady, individuals aren't able to get increased mortgages, but what they can do is pay for those increasing house prices with with down payments. What we questions. Yeah. Yeah. Go ahead. Yeah. Yeah.

[Leonora Dodge (Member)]: Hi, Joe. So I have two questions. One is how did you distinguish a regular buyer from what you call an investor, or are you or are you making a distinction at all? And second, so one is identifying investors, and second, you gave an exact percentage increase in investors. I was hoping that you could just I didn't quite hear that. Could you repeat that number? That you gave a percentage increase, but not an absolute numbers increase. And I would like to hear both, please.

[Dr. Joe Ament (University of Vermont)]: Yes. We called investors anything on the closing document that the purchaser was an LLC, Corp, Inc, or Co. We actually believe we undercounted. We wanted to be conservative so as to not overestimate investors. But what we didn't get was individuals who own a second home and rent it out under their own name, who who we might I might consider an investor, but we didn't our model didn't call them an investor. So it's LLC Corp Co and Inc.

[Leonora Dodge (Member)]: So not a personal trust for instance, like a

[Dr. Joe Ament (University of Vermont)]: We did not call trusts we debated this back and forth. We did not call trusts investors. While many trusts are investors, there are individuals who I believe to avoid taxes or whatever. Don't know why they do it. There are individuals who have trusts and only own one home. Yeah, it's very common and that's why we didn't wanna get messy. There are too many trusts in Burlington where they just own that home that we didn't wanna over count.

[Ashley Bartley (Vice Chair)]: So just so I'm understanding, someplace like Champlain Housing Trust, were they included or excluded from this data?

[Dr. Joe Ament (University of Vermont)]: So if Champlain Housing Trust purchased the home, they were not included, no. If an individual purchased a home from Champlain Housing Trust, they were also not because they were an individual. And I'm pretty sure Champlain Housing Trust doesn't allow corporations to buy their homes when they go up. So so no. Nothing within Champlain Housing Trust would have been included as an investor.

[Marc Mihaly (Chair)]: And that 1% to 20% investors occurred from what period to what period?

[Dr. Joe Ament (University of Vermont)]: So 2003 to '2 through 2023, the twenty year period. Okay.

[Leonora Dodge (Member)]: And

[Dr. Joe Ament (University of Vermont)]: to answer your your question, I don't have the exact numbers in front of me. I can pull them. But it's a it's 1% and it goes up to about 23% is what I believe. Absolute numbers is one to 12 in 2023. So 12 investor purchases in 2023. A 144 over the twenty year period moving steady from one to 12. And again 2023 had 12, 2021 had 15. So 12 wasn't the highest. It was the most recent in our data. And I think I actually think the journalist covered it well that it seems like a small number but it has a big impact. You know, if if you know, because it is about 23% of homes sold are investor, even though the 12 number is somewhat low, our model says that that still has a pretty big impact.

[Leonora Dodge (Member)]: And these are within the year?

[Marc Mihaly (Chair)]: Within the year

[Joseph Parsons (Member)]: of that year.

[Leonora Dodge (Member)]: 20% of the sales. Twelve twelve buyers in one year were investors, and the other 80% were individual buyers.

[Marc Mihaly (Chair)]: Yes.

[Gayle Pezzo (Member)]: Okay. Thank you.

[Dr. Joe Ament (University of Vermont)]: Great. No. It's wonderful. So one of the things that we wanted to do is understand what is the interaction between investors and down payment. And the way I like to explain this is if you look at what makes a leaf long on a plant for example, it's soil and it's sun. But in the absence of sun, the best soil in the world is not gonna allow that plant to grow and vice versa. So a model really needs to say, okay, if this plant is gonna have a long leaf, what is the relationship between soil and sunlight that is contributing to that leaf length? So in our study, leaf length is house price and investors are down payment, our soil and sun. So we said what's going on with when investors bring down payments together? And that was where we found a lot of of strength in our model. So this what I'm about to share is the difference in average home price in 2003 and 2023 was 285,000. So home prices had increased 285,000. A huge chunk of that is just what or just controls that we call prior sales. A $300,000 house is gonna sell for 400,000 just because it's sold for 300,000 last time. It's just a home sells for the size of itself or it's sold relative to to what it has sold for before. So we don't need to worry about that too much. It's just a control. Interest rates are actually quite positively correlated with home prices. So as in interest rates go up, housing prices also go up. Contrary to popular belief and actually fed monetary policy. What we think is actually going on there is with the increase in investors who pay with a lot of cash, interest rates aren't as useful because people don't need to worry about them. They're either gonna refinance later or they've paid so much in cash that the interest rate burden on their monthly payment is is is smaller than otherwise. So that was actually quite a surprise. As you can see a huge chunk of that increases is investors. Down payment by itself is is relatively small, but investors and down payment together is a is a chunk of that. And then this is where it's interesting. This is where we start looking at supply. Homes for sale actually is positively correlated with prices. So as we add more homes to the market, prices actually go up. We don't actually see the mediating supply effect on price until a home sits on the market for more than thirty days. So there was a thing that was quoted in the paper in seven days where they said I I had told the reporter that removing one investor would have the price decreasing equivalents of building eight homes. And that is assuming this homes on the market. That's assuming those homes sit on the market for more than thirty days. If they don't, if let's say half homes sit on the market for thirty days and the rest are sold within thirty days, that number changes to about 20 built homes to decrease the price increases removing one investor. So this is a really interesting dynamic that that and that gets into the supply tightness that we believe investors are driving.

[Marc Mihaly (Chair)]: Let me ask you because that's I'm that's so counterintuitive I'm lost. Why what is the process by which adding homes for sale increases price.

[Dr. Joe Ament (University of Vermont)]: I mean, I think the counterintuitive is

[Marc Mihaly (Chair)]: Is it that Yeah. In such a small market, a developer like, if a developer just chooses to cater to the high end by increase by adding homes at the high end, which is what we've heard. We've heard, for example, that there's a huge shortage of labor and contractors and that for various good reasons, contractors prefer to work on large projects, which are large homes, that it's larger homes that are on the market. Is is that what's going on or is there or some other dynamic?

[Dr. Joe Ament (University of Vermont)]: I think it's a bit of both. I've got a little bit of data because I wasn't sure what you all wanted to hear about. So later in the presentation, I do have some data that what you're saying is at first blush correct. So, yes, I believe that's happening. I also believe that investors find Burlington to be an incredibly good investment. And therefore, when a home goes on the market, they snatch it up real fast. So I I I actually believe that it's investors buying homes within that first month, and then since it's an investor they're willing to pay a little bit more. Or on the flip side, individuals who believe they're gonna have to out compete an investor want to get a home as fast as they can within that first month. If anyone's been in the Burlington market trying to buy a home, most homes get you know five to 10 offers in the first weekend. And many of those are investors. So if you're purchasing a home, you know that you have to do that pretty much right away. So I think it's both. I think it's building pressures, and I also think it's investment and just Burlington is, at this moment, a very strong investment market. And therefore, individuals who aren't planning to invest but want or need to live in Burlington have no choice but to compete with those individuals. So No. I'm gonna yeah. Please go ahead.

[Leonora Dodge (Member)]: Sorry. One more question. I the effect of individuals who can pay cash, not necessarily investors, but an individual who has sold, you know, their San Francisco Victorian or whatever and, you know, are sick of the forest fires and can pay cash. Do they have a similar effect?

[Dr. Joe Ament (University of Vermont)]: I believe they do. And this is where this interaction term here, what's called investors and down payment, that's not necessarily investors with down payment. That is when down payments broadly in the marketplace and investors in the marketplace are increasing. So many of those individuals have are putting down a lot of cash. I mean, we've seen I don't have it in this presentation. We've seen average down payment go from from non investors from about 20%, which is normal. Since twenty eight nineteen twenty twenty go up to about 45% down on average for non investors. So there there's a lot of dynamics there. One is they don't have larger incomes perhaps because median income is not increasing, but they might have family money or maybe they sold a house in San Francisco. So they're able to bring that cash. And then knowing there are a lot of investors in the market, they might say, need to bid more and I can afford it because I've got a little bit of cash in my bank account to to cover that increase. Right? So there is a bit of a bubble here because in in 02/1967, leading up to the financial crisis, individuals' mortgages were outstripping, their income. Now we see mortgages in the line with income, but we see down payments outstripping income. So I would say that we have a bit of a down payment bubble. The problem with the down payment bubble is those fundamentals are still strong. So it doesn't it it won't necessarily it can't be really addressed by banking policy, for example. Although I heard have there are people who have talked about limiting down payments. I do think there are equity issues with that. But I I didn't really touch on that. But I think your question is correct. That that there are non investors are putting down huge amounts as well.

[Thomas "Tom" Charlton (Member)]: Great. So I see the correlation that you mentioned. I I'm not sure I see the causality. So what I'm what I'm asking is, if I'm from the perspective of a seller, I have a piece of property, it's on the market, it's been there fifteen, twenty days, somebody makes an offer. I don't really care whether the price they're offering me is mortgaged or down payment. As a seller, I'm not really, I don't know that I'm motivated by the down payment alone. So how does is it is there does it does it happen to be the people with the big down payments are faster? They are more are they more willing to pay a higher price? Because I don't see where that motivates the seller.

[Dr. Joe Ament (University of Vermont)]: Oh, yeah. Two things.

[Marc Mihaly (Chair)]: I think

[Thomas "Tom" Charlton (Member)]: Anything else that goes along with that that motivates the seller?

[Dr. Joe Ament (University of Vermont)]: Yeah. I think two things. I appreciate the question. The first is, I believe individuals are willing to pay more when they have a lot of cash. Right? If if you if you're I've heard anecdotes. And again, this is non anecdotal. So there are anecdotal studies that I wanna look into, but I haven't. But I've heard anecdote where people say, my parents said you can buy you can have whatever you need to get the house you want. So the cash can be quite unlimited in what people are able to bid. To answer your first question, I think sellers are actually concerned about the makeup of an offer. If you go in with more cash, the chances of an assessment being under your offer are much lower. Right? Banks only are willing to give mortgages relative to what the home is worth. If there's a 50% cash, you're gonna clear that no problem and you'll have no bank problems. So sellers are incentivized to sell to all cash purchasers or large down payment purchasers because of that bank dynamic. Does that make sense?

[Thomas "Tom" Charlton (Member)]: Okay. Sure. Because that could ensure a faster sale.

[Dr. Joe Ament (University of Vermont)]: Well Well, I think it's a yeah. It's a faster sale and

[Thomas "Tom" Charlton (Member)]: Less outstanding questions when

[Marc Mihaly (Chair)]: you Yeah. I mean, you're essentially as soon as you accept an offer, it's off the market for thirty days or or you could take backup offers, but you're bound. And then if at the end of thirty days, they come back and say, it fell out of sale because there's no mortgage, know, you've lost your thirty days. If the mortgage is at 50% rather than 80%, you know, you have a much better chance

[Dr. Joe Ament (University of Vermont)]: Sure.

[Marc Mihaly (Chair)]: That they won't.

[Thomas "Tom" Charlton (Member)]: Exactly. So I'm indirectly motivated. Yeah. Exactly. The larger but the larger down payment indicates that it's more likely to go through and be sold faster.

[Dr. Joe Ament (University of Vermont)]: Exactly. Exactly. And I've even heard evidence of of individuals taking lower offers because they were a 100% cash. Maybe not a lot lower, but $510,000 because they Well, know it's

[Marc Mihaly (Chair)]: a 100%. Yeah. Emilie, you have a question?

[Emilie Krasnow (Ranking Member)]: Yeah. So okay. So a couple things. Tom's question spurred some of my thoughts. So I think perhaps you're aware that I introduced a bill h six zero seven that goes after not banning, but limiting private equity institutional investors from buying single two family homes. Okay? And so, you know, based on what New York passed into law. And I think one of the concerns I have about my own bill and trying to address that is the seller aspect. Right? Like, the person some of the pushback that I've heard from people a lot of people love love it, which is great. But some of the the pushback is, well, sellers should have that choice, you know, if that's what works for them. Right? So that's kind of I I you know, my libertarian streak in me agrees that that should be up to a seller to to decide that. And if you know, so in the bill, it's a kind of a waiting period so that people and not investor corporations have the opportunity to buy first, get the first shot. So I think that kinda helps that, but it's still an sorry. My dog's speaking a toy. It's still an outstanding question that I have and that I'm trying to wrestle with is how the sellers, you know, people ask that. So that's one one question. And I think you kind of talked about your opinion on the selling aspect. I will just state and for the record and and for you that I personally don't see this the bill that I introduced was a starting point for discussion, and we added it into a bill to have a study of our own for the state. But I think the housing crisis to me from, you know, and I'm not a researcher, is many different tools. So, I do think we need to build more housing, and personally, and that that will help with what we're trying to achieve in Vermont. But I also think that the housing that we build should be available first to people who are trying to buy a house. And so that's kind of where I stand on this. And I'd love to hear your opinion on the bill as introduced, if you've looked at it or kind of so moving forward now, do not pass the bill, but we're going to have our housing department look at that and see and then wait for what happens on the federal level and other states, what they're doing. We need to gather more information. But that's kind of where I stand. I see it as another tool, but still need to build housing and welcome that. But the six zero seven is another tool to make sure the housing is available for people.

[Dr. Joe Ament (University of Vermont)]: I think that's great. And and so to answer your question, well, one thing is I don't have opinion. I mean, I have opinions. I'm a person. None of what I'm talking about is is is opinion based. This is just what my research has shown. And one of the things that my research has shown is we don't really see institutional investors in Burlington. We have over twenty years. I said we had a 144 investors purchase and not one of those made a repeat sale, which would suggest that there's a 144 separate small investors in Burlington. That's actually not perfectly accurate because I've looked into it briefly. And we actually see that people are doing sub companies. So I've done some research just lightly. And we'll see one company maybe be based on mailing address, have five or six LLCs that they create for a particular home. So I believe there are some investors that are larger than just one. But we don't see the BlackRocks, the investment firms really in this market. So that is that is one

[Marc Mihaly (Chair)]: You you should know, are you in touch with the Rutgers project on private equity? No. You you ought to talk to the people or be aware that at Rutgers Law School, they did extensive research on several cities in the East Coast in in I guess, was it Rhode Island or Pennsylvania? Anyway, what they found was the same, they found half of what you said. They found that the large institutional investors were not playing in the Northeastern market. They play in the, you know, Florida and in the Southwest, but not and in the South, but not the Northeastern market. However, there were institutional investors who bought repeatedly in these markets under different LLCs, but they were pretty small fry, but they were definitely repeat investors. So, I think it's worth your time to sort of look a little further in the data to see whether any of that is happening in Burlington, and we would sure like to know whether your work that you do sustains your no repeats view or modifies it. Because I think it would be modified already. Yeah. We're likely to take this up next year for next session. We're likely to get into this and wanna know, are we ahead of the problem or is it already here? Yeah.

[Dr. Joe Ament (University of Vermont)]: I mean, the other thing too is like, I don't know if we'll ever get a perfect answer, if I'm being completely honest. I've looked at the data quite quite extensively. What what we've done is looked at mailing addresses. But we've also found out that the same corporation can use multiple mailing addresses. So there's really, when you're looking at 4,000 home sales, it's next to impossible when investors are using multiple shell companies, multiple mailing addresses to see who's doing what. So we we that is a project that my PhD student and I are working on. It's just next to impossible to get a definitive answer. But what at least what we do think from what we can see, most most of these investors own between two and six properties. But again, that could be one who has broken it. Oh, it's not. But, you know, that could be fewer that have just been really smart on avoiding it.

[Marc Mihaly (Chair)]: Right. You should I would suggest you get yourself in contact with the Rutgers Law School project because they spend a lot of time wrestling with exactly what you're talking about, and they perhaps have insights that might help you. Fair.

[Joseph Parsons (Member)]: Yeah. Great. Tom?

[Thomas "Tom" Charlton (Member)]: Yes. So there is a, I don't remember the details, but there's a loophole in the property transfer tax that some buyers, take advantage of by creating an LLC, purchase the home, and then they rent it from their LLC. And there has some effects on the on the property transfer tax. I don't know what it is, but do you have a in your methodology, do you have a way to screen those out? Filter for those? Because it would appear as an LLC, but it's been set up to shield the buyer from a portion of their taxes.

[Dr. Joe Ament (University of Vermont)]: There's two ways that we I I think I have two answers to your question. One is, yes, we do have a way. We look at mailing address of owner, And where mailing address of owner matched property, even if it was an LLC, we did not call it an LLC because we figured that was happening. So if an owner purchased a home under an LLC and the mailing address for that LLC is that home's address, we did not include them as an investor. That being said, if the mailing address was a different place and someone took advantage of that, we would not see that.

[Marc Mihaly (Chair)]: Go ahead. As you can see Joe, we're

[Dr. Joe Ament (University of Vermont)]: it's a fairly active committee here. But please go ahead. Okay. Great. So this is so I was I I I thought you all might want to know a little bit about Vermont in general. What I'm about to present is stuff that I pulled together yesterday after being asked to to talk with you all. So I think I just wanna caveat this since I'm on the record as what I'm about to present is stuff I pulled together in a day with publicly available data. And I think the trends hold, but if the numbers are slightly off, that is what it is. But I looked at households and homes in Vermont over the last ten years, and that upper green line here is homes in Vermont. So we see it's ticking up a little bit, but household is actually in that lower line, the orange line ticking up a little faster, which shows that homes per household in blue is decreasing. Right? So I think that that would corroborate the we need more homes story. Right? We have decreasing homes per household.

[Marc Mihaly (Chair)]: Yeah, But there's a lot of go ahead. What

[Saudia LaMont (Member)]: does that mean? What is a home per household?

[Dr. Joe Ament (University of Vermont)]: So how many homes you have in the state divided by how many households you have in the state?

[Ashley Bartley (Vice Chair)]: So it's a ratio rather than a home in it.

[Dr. Joe Ament (University of Vermont)]: And the reason I chose household instead of population, and this is where these numbers get quite tricky, population is not great for this because of how individuals live. Household is also not great for this because you can have four individuals living in a house and that's a household. So population dynamics play into this. And one of the things that's interesting is we actually see at the census level individuals starting to live by themselves more in Vermont in the last three years. There is sort of go ahead.

[Marc Mihaly (Chair)]: So in other words, if the homes per household, homes divided by households, goes down, it means that it's a it becomes a smaller and smaller fraction, which in turn means that the number of households is larger and larger compared to the number of homes, means that the households

[Gayle Pezzo (Member)]: The households are are

[Marc Mihaly (Chair)]: and the homes aren't Growing as fast, is pretty much what we heard, although the numbers are different, yesterday from Moira, who was saying that you could account for 20,000, the need, if you looked at the housing targets, the 20,000 of the need was simply because people have changed, number of people per household has gone down.

[Gayle Pezzo (Member)]: Gone

[Marc Mihaly (Chair)]: up. She said gone down. Yeah, the number of people per household used to be like, you know, families with two, three kids, five people, and now it's individuals, and so that increases that if you're going to house those people as single, you need more housing, you need more houses.

[Gayle Pezzo (Member)]: Is he saying the opposite? He's saying the

[Dr. Joe Ament (University of Vermont)]: same thing. I'm saying the same thing. Where I will add is we actually see this starting to tick up as you see from 2024 to getting back to normal. And what I actually think is is going on here is a bit a bit of a I think people assume COVID is done. To be honest, I just don't believe it is. I think there's shakeouts that are still with us. So we see these housing houses per household decreasing, which would suggest we need more houses. But that's starting to come back to a normal level. And this five thousand number that I have here, if we just change that by about 5,000 and got back to a normal level, we're just right back to where we were pre COVID. My point with saying five thousand is, this is just a small little blip of things shaking out. And I just wanna put that into some context. This is the immigration and out migration of The US and you can see California and New Mexico and then New York have the large like sort of the largest out migration. But by far people are leaving Vermont faster than any state in the country by far. As you can see by it being the the light blue here. And we can see this is county wide. The number the colors switch. The census did it weird. People are leaving Bennington County, Rutland County really quickly, staying about the same in Burlington. And then this I find really interesting. This is population changes in Vermont. And this is actually the story that I think most aptly explains this dynamic of the household dynamic. And it also kind of gets at some of the questions I had around the Vermont Housing Finance Agency report. That report is based on a low level 1.1% immigration into the state at a high level 1.8%. We actually see an out migration. So that report with the 40,000 number 24 on the low end is really rooted in these kind of immigration dynamics. And we actually see these kind of out migration dynamics. And my point isn't to call into question the VHFA study, but rather when the assumptions about immigration go into that study and they're incorrect within a year, that study should probably be recalculated. If you ran that study with these new numbers, we likely have a housing surplus. Now does that mean we don't have other problems? Yes. This is not wonderful. Right? There are demographic issues that that is gonna cause with a tax base. All of that is very real. My point here is just to say that household dynamic, I believe is a function of COVID and the shakeouts from COVID. And I just urge you all and my peer here to think about how to engage with this beyond just the we need more housing. Because I think there's a chance that within five to ten years, we might not need that housing. And then if we've built it, what happens? Again, that's where the opinion goes. So I'm gonna kinda pull back on that, but but this is the data that I'm seeing. Saudia, please.

[Saudia LaMont (Member)]: Hi. Thank I just have a question on the thank you for all this data. Appreciate it. Question around the quality of the housing and the housing stock on accessibility. It has does your data look at

[Marc Mihaly (Chair)]: whether

[Saudia LaMont (Member)]: it's habitable or whether it's available? Because we have an aging housing stock, right, as well. And some, you know, I'm not including dilapidated buildings. I'm just There's a lot of fixer uppers on the market, and that require a lot of investment on the front end. And I don't know, and some of the housing stock, well, these are two parts. So the one, do you look at the quality of the housing stock is one of the first question. And then the second question is, is this this is only for homes, not for units. Correct?

[Leonora Dodge (Member)]: Oh, shit.

[Saudia LaMont (Member)]: So those are my two questions.

[Dr. Joe Ament (University of Vermont)]: Yeah. Great. I love the question. You're a touch ahead of me, which when I'm teaching, I love it. So good good on you. To answer your age and no. So to answer your first question, we don't really look at quality of homes, because again we're looking at Burlington property database level. Burlington property database however does say quality and it's average good. And I forget the other qualifiers. We ran average good and quality in our model and it was we decided to remove it in our the model we decided upon because it didn't seem to have much relationship. Investors and non investors were buying those at a really similar rate and they were pretty much correlated to price. We also looked at age of home to say, is there something like investors are buying really old homes, which might be more fixer uppers and then fixing them and flipping them. We also pulled that from the model because it just wasn't strong and telling us anything. So to the extent that that's a non answer, I think it is a non answer. We didn't look at it. But I think partially too, the reason we didn't look at it is it just doesn't sometimes yes, sometimes no, which means it's not really telling us much information. Units, I I might be able to answer your question moving in here to this next part of my presentation. If I don't, Saudia, please interrupt me. This is Burlington construction over the last fifteen years. This is pulled from BTV stat. And we see we've been constructing quite a lot in Burlington. In fact, in the years 2000 to 2010, we built six seventy houses I believe. And 2010 to 2025 is something like 1,600. So huge increase in what we're building. This is the makeup of what we're building. You don't need to really look at this too closely but what you can see is this blue that we start seeing post 2010 are apartments. So we're tending to really focus on apartments in in in the city. But we definitely still see single family and two to four unit unit homes. So I looked at the the

[Marc Mihaly (Chair)]: Hold on a minute. Go ahead.

[Dr. Joe Ament (University of Vermont)]: Yeah. Yeah. Shoot.

[Ashley Bartley (Vice Chair)]: Tom, do you wanna ask your question?

[Thomas "Tom" Charlton (Member)]: Maybe before we go too far ahead, because I I I have a list of questions that I've been I've been accumulating.

[Dr. Joe Ament (University of Vermont)]: Yeah. Please. Of course.

[Thomas "Tom" Charlton (Member)]: First thing I I I think is very similar to Saudi is on the graph that shows homes per number of households. Are we counting at the bottom of that graph? It indicates that we're counting homes and at the top it's housing units. Are we how do rental? Are we including apartments in housing units? Yes. Or just we are. Okay. That was This is

[Dr. Joe Ament (University of Vermont)]: this is out. So this stuff that I've just presented here is after my study. This is the stuff that I pulled yesterday.

[Thomas "Tom" Charlton (Member)]: Right. Sure. Okay. So, second question I have, the bar chart that is showing, population gain and out migration. This may not be a question for you as much as the Census Bureau, but can we parse that data a little more and find out, for instance, who is increasing and who is decreasing? Do we have everybody stuck at home in 2020 and a lot of babies in 2021? Do we have, I think we know we had a lot of people moving into the state in 2021, but as we see the net out migration, is this the same population that came here during COVID and they've said, the heck with mud season, we're not doing it again? Is it people who have been here and would like to stay but can't afford it? Do we know who is moving out? That's the question. I

[Dr. Joe Ament (University of Vermont)]: mean, I think you're getting at the frustration of my life. It's really hard to look at these big level databases, and this is why for my particular study, I did what I could and look at every single mortgage document because that's easy. So the answer is we don't know who these people are. But we can do some back of the envelope math and compare this out out grouping of individuals leaving with this where we see households households increasing. And what those two pieces of information tell me, and this is not perfect, but it means a lot of people came here during COVID. We saw some leave. We don't know who they are. The people who tended to stay after COVID tended to live in smaller households. So maybe someone moved here and they said, you know, I'm staying here. I'm 28. It's time for me to live by myself now, so they get their own place. So taking those two things together, we don't know if someone moved in and then moved away. But what we do see is a ton of people moved in. And as people moved away, that sort of dynamic shifted of how people are living and building households together. And then we do see that transitioning somewhat back. But I honestly believe that the next five, ten years will give us more data on that. That's a long winded way to say it. I'm not perfectly Okay,

[Ashley Bartley (Vice Chair)]: go ahead. Forgive me. I looked at the census data from 2003. That's what looks like most of your data was started with to 2023. And there's roughly a 13.7% increase of individuals living, residing in Burlington. I'm not sure whether the census takes into consideration that Burlington is a college town. Not all college students actually declare residency in Burlington at the time that they're in school. But we're, I mean, that's a significant increase in a dense area. Does your data pinpoint anything where there is appropriate housing for that type of increase in population? I just wondering.

[Marc Mihaly (Chair)]: You

[Dr. Joe Ament (University of Vermont)]: know, I'll be honest to say, I don't I don't know what you're referring to. When I've looked at population across those twenty years, I don't see it increasing 13.7%. I've seen it pretty steady in the in the low forties across

[Marc Mihaly (Chair)]: that

[Dr. Joe Ament (University of Vermont)]: time period. So I I I I the answer is I don't really know. And and part of the reason I don't know is we don't know who moves here, how old they are, how much they make, where they live, what rent they pay. There's just a lot that is really opaque for a researcher. So I think your question was, do we have enough homes for an increasing population? And I think when we run those statistics on homes per population, we actually see that in Burlington, we have at least enough units for the population changes that we've seen. Maybe not the household changes, but unit wise, we're we're pretty steady in Burlington. Vermont, Okay, not

[Ashley Bartley (Vice Chair)]: and then in COVID, we saw a rise in people experiencing homelessness who don't declare residency at all, does your data take into consideration those who currently housed?

[Dr. Joe Ament (University of Vermont)]: No. Again, I didn't really look at population much, so I don't I didn't look at makeups of population. I'm just looking here. This is what I pulled yesterday on who's moving in and who's moving out. There's a chance that more individuals moved into the state here who were unhoused and never declared residency. So yeah. Certainly.

[Marc Mihaly (Chair)]: Those are net numbers in the graph.

[Dr. Joe Ament (University of Vermont)]: Right. Exactly. So this could include deaths as well. It it does include deaths. Yes.

[Marc Mihaly (Chair)]: Okay. It's interesting. There were numbers reported in the recent press analyses about the net decrease in population, but they weren't as big as 2,000. They were more like but anyway, okay. Where do these numbers come from?

[Dr. Joe Ament (University of Vermont)]: These are US census.

[Marc Mihaly (Chair)]: Okay. Alright. Go ahead.

[Dr. Joe Ament (University of Vermont)]: So real quick, I just I pulled from Burlington housing database. And again, this is just Burlington. I wanted to get a sense. I I felt there was a question that was what is the what type of houses are being built? What type of units? So this is data, and this is messy. So bear with me for just a moment. I looked at the last fifteen years of homes that were built. And, you know, we have two family units, apartments, condos, residential condos, and single family homes. What we see here is these are the average assessed values of the homes that were built in these last ten years. So ranging from 590,000 up to 1,300,000. And now these are assessed values. Everyone who knows how assessed in market works, it's about 60% on on the dollar. So what we've built in the last ten years are million and a half dollar homes. Two families, you see a similar story though a little bit lower. So we're we're building less expensive two family homes. So duplexes assessed in the 600 to $5,500 to $600,000 range. But again, that's assessed. So what those sell for is is much higher. And then what we see is like this is Bayberry Place on Grant Road in in Burlington, Cambrian Rise, The Nest on on on North Pine Street, and then City Place is a huge piece of that. So I I only bring this up not to overwhelm you all with a terrible graph that I've put together, but rather just to show that what is being built. You know, Burlington has a a report that says we're 90% toward our goal, which is great, but 90% toward a goal when you look at the actual homes that were built, these are million dollar single family homes. They're $900,000 two family duplexes, and then they're luxury apartments and condos. So I I I I there was a question that was sent through the email that sort of was like, what types of homes are being built? And at least in Burlington, they're not affordable homes. They're extremely expensive homes and extremely expensive luxury condos. So just to sort of pull back, like I said earlier, I don't really have I have my own opinions, but this this research is is as opinionless as it can be, but I believe, you know, we might need some homes. I think then it's incumbent upon us to build homes that are affordable if that is our goal. And that's a lot harder to do to say we're gonna build an affordable home because it takes public policy. It takes city buy in. It takes a lot of different things rather than incentivizing investors because we see what incentivized investors will build. And this just goes to a little bit of a an anecdote. This is a home in the in the New North End. This top picture is the home toward and then the backyard. It's on a dead end street. So this is the home and this is its backyard. Someone bought the the home, remodeled this home and sold it, put up a fence right here in the lower picture that you can see and put up a duplex. And each of the units in this duplex are being sold for $600,000 So this is what we keep seeing again and again in Burlington. If you look at what is being built, these numbers would show we've built two more units. That's great. But these are $600,000 condos with no backyard, extremely small footprint on the inside. So on the one hand, that is not that is an example of increasing supply, driving down prices. And it's just an example of the focus on supply that is not focused on affordable housing, as focused on supply writ large. And I just find this to be a really good example. There are examples kind of all over the city where you see similar things being built that that are not focused on being affordable.

[Thomas "Tom" Charlton (Member)]: Tom, go ahead. Do you have a kind of an operating definition of affordable that you use in doing your research? Because in Burlington, 600 doesn't sound affordable to me, but I'm not from Burlington. Is this middle class housing? What what is $600,000 in that market? Is that

[Dr. Joe Ament (University of Vermont)]: Yeah. 600 well, so mean, affordability is even contentious. I actually believe that the affordability threshold is too high. I believe it's 30% of median income. So right now, a studio in Burlington is that is affordable is $1,200. But it's relative to median income. So a $600,000 condo is affordable to someone who makes two and a half million. So it's it's always relative to median income and that's where these things start getting tricky. I would argue that the these homes in this picture below are wildly unaffordable.

[Marc Mihaly (Chair)]: It's John, let me let me voice a doubt here and please react. It seems to me that your entire analysis is based on a very constrained market. One which is in which the vacancy rate is very low. People are arguing to us that increasing supply over time does decrease price over time, and for all the reasons we've heard before, and they cite to studies in Miami and other places where a lot of housing units are built, and you start to see a weakness in the market, even if the housing units are built. We know that it costs $600,000 to produce a new housing unit. I mean, there are exceptions, but, you know, manufactured homes, etcetera, but a state built home is hard to to buy, to build for less than 500 or $600,000 The argument is that the people who buy that move out of older homes, etcetera, and we've heard, even yesterday, studies cited that tracked that and concluded that prices were moving downward. We also heard evidence that even in Burlington, there's been more construction in the last few years and that we're seeing vacancy rates go up and rents go down. Comment?

[Dr. Joe Ament (University of Vermont)]: Again, I think yeah. I mean, part of the vacancy rates going down is, like I said, people are leaving the state. So it's a lot of like causation. It's like, is are prices going down because more homes were built? Perhaps. Or are they going down because people are leaving or changing household dynamics? I think it's really tricky. And I think my only if I had any goal for writing this paper was I believe the supply argument is far too simple and it's not corroborated by evidence in Burlington. And therefore the conversation needs to be more complicated. That's that's essentially I'm not even here to say housing supply won't create a lowering of prices. What I will say is over the last twenty years, we see that if we build homes in Burlington, we need to outstrip demand by such a pace that it's ultimately, I believe impossible. I don't know how we're gonna build 5,000 more homes in Burlington. And that's about where we see the downward pressure on prices starting to come in. I just think it needs to be a more nuanced conversation. That's essentially it. So my response would be individuals when they say we need more supply, have a pretty weak understanding of the data behind causality in Burlington, and they're jumping to some conclusions. That's all. We've seen more homes being built in the last ten years in Burlington than we've ever seen, and yet prices continue to rise. Now they have plateaued a bit, but we don't really see them coming down and we see it's in, they're not flat lining. They're going up at a slower rate. Someone could say, keep doing that for ten more years and then you'll start seeing it. Again, that could be the case. But given the data we have now, we don't see a relationship between increased supply and decreased prices. Again, talk to me in ten years. Maybe use in ten years you say, Joe, we kept building, kept building, kept building, and prices came down and I'll be like, Hey, I'm wrong. Because I don't have an opinion here. This is just me looking at the data to see what is causal, what is correlated, what's going on.

[Leonora Dodge (Member)]: Can I ask you, have you looked at what happened? I think that the last spike that we've learned about in terms of building was in the eighties. And can you tell us a little bit if you've looked into more historically, maybe without the benefit of the database, but just generally the the effect of increasing supply in the eighties?

[Dr. Joe Ament (University of Vermont)]: I I actually haven't in detail. And part of the reason I didn't is just dynamics are so different. Banking dynamics, banking law, just there's so many things that are different. No. I've not looked at that.

[Thomas "Tom" Charlton (Member)]: I'm good. Claudia?

[Leonora Dodge (Member)]: I have I have oh, sorry. Go ahead, Claudia. Yeah.

[Dr. Joe Ament (University of Vermont)]: Can't We

[Leonora Dodge (Member)]: see it. We can't see with the screen that she's on.

[Dr. Joe Ament (University of Vermont)]: Okay. Okay.

[Saudia LaMont (Member)]: Finish, Leonora. Go ahead. I'll go after you.

[Leonora Dodge (Member)]: I was also just curious about I had this crazy notion because I have friends in Canada. They don't have anything like we do, like a thirty year fixed. They don't have thirty year fixed mortgage mortgages in Canada. They only have variable mortgages. And I feel like that has a far greater effect on people basically needing to stay in their homes and not selling unless they can sell for a huge amount so that they can then move into a smaller place for it to be worth it. So I'm just putting that in your research bucket or wondering whether you have anywhere to send me to to look to look at look at research comparing that. You know, like, I have friends that now can rent a place in Toronto with a two bedroom, brand new building, swimming pool and gym, just next to the downtown for 1,500 Canadian a month. Yeah.

[Dr. Joe Ament (University of Vermont)]: Yeah. I mean, I think there's a lot within that question. One is what are those interest rates doing? So those very is it a variable interest rate mortgage? Or is it like in The UK, they don't have thirty year mortgages. They mostly have ten or fifteen, which means you have a higher monthly payment, but it's paid off faster and you pay a much smaller piece in interest. They have done studies that actually show in The UK at least that those tighter, faster mortgages actually can cause some inflationary pressures. So we see actually bigger inflationary pressures in The UK housing market that relative to The US housing market because our thirty year mortgage with a fixed interest rate can be a little stabilizing. That being said, going in much further than that, I would just say there are a lot of dynamics to consider between Canada and Toronto and Burlington and in The UK that I don't wanna answer because I just don't know. I I do think there's an effect. I just don't know which way the effect goes. Sometimes it's one way, sometimes it's the other.

[Marc Mihaly (Chair)]: Saudia, did you have a question?

[Saudia LaMont (Member)]: I did. Thank you. I was just curious, if if at any point in the research you can Can you hear me okay?

[Dr. Joe Ament (University of Vermont)]: Yeah. Yes, now you popped off for a second.

[Saudia LaMont (Member)]: All right, thank you. Yeah, I was just curious if at any point in your research, would you consider factoring in population? Because I think the narrative around we need more housing is very much correlated to the increasing rise of homelessness and not only homelessness, but the risk of homelessness. Because I represent Lamoille, Washington District and in my county, we look at people who are literally homeless and also people who are at risk of homelessness. And that means people who are couch surfing or, know, doubled up and things like that. And I think as you look at the data of the household size, I think you alluded to this a little bit, you know, people are living together. And so that is showing up in that household size. However, I think if I mean, scientists, please, like, can you help us understand the dynamic of how that plays out in population correlation, because we have such a rise in homelessness and risk of homelessness. So people who are really on the brink at any moment of becoming unhoused, and unhoused is the actual term we should be using. But I just really, I know that the household size can impart. I mean, I'm saying this not scientifically, but just really from witnessing. So what is the word? Anyways, you know what I'm trying to say. But from the people who are doubled up increasing household size. And so how do we establish if our units are there and we are saying, no, we have housing stuff, we don't need more homes, and yet people are unhoused, what is the missing ground to gap? I don't know if there is a way, if that's something that you'll be looking at in your research going forward, if that exists somewhere, if you could point me in the right direction.

[Dr. Joe Ament (University of Vermont)]: Yeah, mean, I think that you I really appreciate the question. And I think it kind of goes to my The first slide I had is like, do we have a housing Do we have a lack of supply? And do we have a high price? And I think the answer is no. Ultimately, I would say that I don't believe we have a lack of supply based on the population dynamics that I've seen. Or if we do, it's it's tight. It's in a narrow time window. And after some population dynamics shake out in the next few years, I think we'll be fine. But I I actually don't think we have a lack of supply. That doesn't mean we don't have high prices. I don't believe the two are related. I believe the reason we have high prices is because Burlington is Burlington and in in Vermont is Vermont. Investors feel that it's strong, and they want to be here, and that is driving up prices. People with money want to be here, are able to be here, work remotely, bring a DC, New York, Boston, San Francisco, Houston, Miami salary and purchase homes here. I think to answer your question, there could be a very good sit a very understandable situation where you have plenty of homes in a city and still plenty of people sleeping outside because the affordability. And that doesn't mean that we don't have enough homes. There's a bunch of empty homes. It means we have an end a population who's unable to afford the homes that we do have. I think that's where I think your question, Saudia, is perfectly apropos of

[Marc Mihaly (Chair)]: my

[Dr. Joe Ament (University of Vermont)]: research because I was more interested in is lack of supply driving house prices? And my answer was strongly no. That means we've got political and social questions to be asking ourselves. How do we get individuals housed? How do we get individuals into the homes that we have because I believe we have enough? How do we get individuals incomes to align with the cost of homes and housing? These are all, I believe, outside of the economic realm or in the political realm. So unfortunately, you all are politicians. That's your job. But that's the tough stuff. The economics I believe is somewhat easy and somewhat straightforward. I asked, is this related? I don't really find it to be related. In my paper that wasn't really covered in the Seven Days article, the conclusion is this conversation needs to move from the economics into the sociopolitical about real democratic conversation about what is the right to housing and how do we house individuals in a humane way affordably. And I don't believe that is done through creating more houses. I think it's done through having an empathetic approach to the right to live in a home.

[Marc Mihaly (Chair)]: Yes, go ahead. Go ahead. Saudia, did you have more?

[Saudia LaMont (Member)]: Yeah, I wasn't Yeah, thank you. Thank you, Joe. I just wanted to follow-up with that and wrap that up with I really do appreciate that and thank you for that sentiment. I just I'm wondering if because here's the thing, right? In the political realm, we rely on data and research and all of the information that you all provide. We rely on the testimony that we hear to input, to impact how we put forth policy. And so for me, because, and I asked the question, I wanna explain to you just for the record that I posed the question that I did, because I think when we talk about the unhoused population, there's a certain image of what that looks like and what that means. And I've experienced people who had two or three jobs at a time working for the state as, you know, working for the schools and multiple jobs at a time and still were unable to afford. So I think we're very much in alignment. And I would like to connect with you further from this to further this conversation. But thank you for your research and I just wanted to just get that on the record, so thank you.

[Dr. Joe Ament (University of Vermont)]: Thanks for your question.

[Gayle Pezzo (Member)]: Gayle? So I just want to understand a little bit better, over the last five years I've worked with probably about 20 UVM capstone students, and all of them have said they would love to stay here, but they can't find housing, especially affordable housing. So is it the affordable housing that you feel we're lacking or housing in general?

[Dr. Joe Ament (University of Vermont)]: Yeah. I mean, think that's the absolutely perfect. Actually, I keep telling everyone their questions are perfect because they're all great. I think I think you're getting at it. So often I hear people say, we need more housing. And my response is, we need more houses to be affordable. That doesn't mean we need more in an absolute number, but we need more affordable housing. That doesn't mean we need to build more. That, in my opinion, means we need to take our current stock and make it affordable. And it goes to to the Burlington data that I was sharing. The the the homes that are being built in Burlington are not what we would call affordable. The apartments that are being built, city place is not where a UVM grad is gonna go live. It is we if we do need any homes built, they should be affordable homes being built. Affordability though is still problematic. There's if anyone knows Maine and Winooski, there used to be the VFW there. The housing trust has put up a 31 unit apartment complex and those are $1,200 studios. And those are considered affordable based on the median income. I do not believe a $1,200 studio apartment is affordable. So calculations around what is affordable, I think needs to be looked at. And then what are the dynamics of making Champlain Housing Trust who's not pulling a profit on that? How do they build a studio apartment that's $1,200 They've got numbers. Like they've got finance people. They've built out the numbers. What makes it work for them. How could the state step in to make that work such that those are $700 studio apartments, for example? So that's a long winded way of saying yes. I believe when we talk about supply, we need to use that adjective affordable. And that doesn't mean more in absolute terms necessarily, but it means more homes that are affordable. And I think that's where the population gets tricked up. If you say we need more affordable housing, they're like build affordable housing. I say, how do we get our current housing to be affordable? And those are two different dynamics.

[Marc Mihaly (Chair)]: I have a question an observation that I'd like you to react to or two. One is, I'm really, in parts of the state outside of Burlington, the testimony that we've received or things I've heard have led us to believe that there just aren't houses. There's actual shortage of houses. In other words, a school district hires a teacher and they literally can't find a house. It's not that they can't find a house at a price they can afford, they can't find a house. But what I'm hearing from you is, even if that's true, building more houses won't mean that that solves that problem, because they won't be affordable to that school teacher,

[Dr. Joe Ament (University of Vermont)]: Right? I think the the second piece of what you said is is definitely what I'm saying, and I believe it is true. The first part, I also believe is true, but I also wanna be clear on I looked at Burlington specifically. I haven't looked at every municipality in the state. So while I've looked at state level and I've looked at Burlington, Saint Johnsbury could definitely have an absolute shortage. Linden, I believe actually might have, because I know people in in in Linden.

[Marc Mihaly (Chair)]: And Joe

[Dr. Joe Ament (University of Vermont)]: So there are places where that

[Marc Mihaly (Chair)]: Johnsbury's a big town in this state. I mean, a lot of places that we're talking about, you know, there's no city.

[Dr. Joe Ament (University of Vermont)]: Right. Right. Right. Well, right. Yes. But but I guess my point is there I believe there are gonna be some cities or towns where there might absolute absolutely be be a shortage. At the macro Vermont level, we don't see that. In Burlington, I don't believe we see that. But there there are going to be some places where that is true. And I think that's really a function of changing dynamics and demographics. But go ahead. I see you have another question.

[Marc Mihaly (Chair)]: Just one more. Being someone myself who's an aging baby boomer, I keep wondering what's the state gonna look like when my generation dies. I mean, I don't mean ages into, you know, one bedroom units. I mean, it's gone. My generation is gone. In twenty years, what's the state gonna look like from a housing perspective? Have you thought about that? If you haven't, don't bother with my question.

[Dr. Joe Ament (University of Vermont)]: I've thought about it a ton, and this is where it goes into, I think, the opinion space. But this is where I believe there are individuals who see Vermont in different ways. I just chatted with a student yesterday who's doing some research for me, and he said he thinks all of Burlington should be brownstones like Brooklyn. I chatted with a person who said he was 80 last week and said we should have 29,000 houses on the waterfront in Burlington. There are different visions for what this state looks like. If if you speak to a generational Vermonter, a working landscape is really important. I think there are ways we can address the needs of the future in ways that make everyone happy. What I do fear is if you look around the development you see, it is, in my opinion, ugly because it's been built fast. And I don't think it will be something that people will enjoy seeing in twenty years. And that's another piece that I raise in my paper is that if we don't engage with population dynamics and pricing pressures and supply in a way that works for everyone, the reason people come to Vermont in the first place might be gone. And then we'll have a larger exodus because why would you withstand the cold to live in an ugly place, right? Right now we love living here because it's beautiful and we deal with the cold. That's an opinion that I have. I love the Vermont working landscape. I love Burlington being low rise and a lot of trees. And I think that if we're not smart about building, it could look like a lot of gray squares, which is what we see going up in Dallas and San Francisco and Miami and along the Jersey Shore. And everywhere you look where they've decided to build, there is massive pushback on what those places look like. So That also, I I do understand, gets into a little bit of fear mongering about changing in working landscape and the privilege that comes with that. I I understand those complications. But with family who, you know, who who have been on the working landscape for generations, it's sort of that is really important to a lot of people in this state. And I think that that should at least be considered. Not the only thing, but should be part of the conversation.

[Marc Mihaly (Chair)]: Joe, did you have a question?

[Thomas "Tom" Charlton (Member)]: Yeah. I guess bit of

[Joseph Parsons (Member)]: a comment question. If you have anything to say about it when I'm done, feel free. If not, you don't have to call it the best question of the day. One of the things I think missing from the conversation is, we keep talking about housing and affordable housing and, you know, what what price is affordable for who, and that's different in different areas. We build zero affordable housing in the state. What we do is we build unaffordable housing and then subsidize it. And one of the problems, like, if what I'm taking from your testimony is that maybe we do have enough homes in Burlington, or maybe in more rural parts, don't have the the housing actually isn't there. It doesn't it doesn't matter what the price of it is. It's just there isn't a house for sale on the market. And part of the problem for me is always that we do these land use things where we say, well, we have this tier one a. We have this tier one b. The housing needs the subsidy to be affordable. It's the the housing we're we're gonna build is not afford subsidizing it makes it that way. We don't really subsidize projects in large scale at all outside of these larger cities. We're not subsidizing a one bedroom in Groton. We're not subsidizing all this stuff. So any comments on that?

[Marc Mihaly (Chair)]: Yeah. We have less money than we ever did to subsidize. Well, we spend a lot

[Joseph Parsons (Member)]: on subsidies. We just don't spend it outside of large cities because that's where we wanna build all these, you know, 12 story walkable downtowns. So that's just my soapbox. Yeah.

[Dr. Joe Ament (University of Vermont)]: I mean, I I don't I think you're right, and I think there's an equity issue. And I think we saw that equity pushback in in the one eighty one conversation of the rural versus the the city divide. And there is conversation around should Burlington be hyper developed and have the rest of the state left less developed. I hear that kind of conversation all the time. Again, I ask this as an economist to say, is lack of supply driving prices? I don't believe so. And therefore, I think this needs to go into the democratic space. And then that's where that conversation should come is like, what should we look like? What cities should be developed? Where should subsidies be going? So I don't really have anything other than that. But it was the second best question of the day.

[Marc Mihaly (Chair)]: Tom, do you have a question? Yes. Do you have a question?

[Thomas "Tom" Charlton (Member)]: So the demand side of the equation can change very abruptly and unexpectedly. It did in 2008, when fuel prices were only a little bit higher than they are right now, and people decided to get gas and go to work instead of paying their mortgage.

[Marc Mihaly (Chair)]: It is

[Thomas "Tom" Charlton (Member)]: only about 3% of them, and it was enough to cause a crisis. Do we have good enough economic forecasting in this housing world to anticipate ahead of time if we are let's say we do create housing that that we can make affordable and appealing? Do we run the risk of creating a surplus at some point if demand drops and then the price starts to plummet, we have another problem, which is that people are suddenly losing equity. How do we gauge any approach to know that we can change course before we contribute to a situation like that? Is that even possible?

[Dr. Joe Ament (University of Vermont)]: I mean, is honestly what keeps me up at night. And is why I do this work to to and and why I've tried to get it out in front of people like you all is that I I do feel that if we overbuild in all markets, single family apartments, condos, and we see at the same time an aging population leave us, that could contribute to a surplus of housing that sees people underwater on their mortgage. And like you said, it doesn't take much to flip that dynamic. And then people start to say, well, I was gonna sell next year. I'm gonna sell this year. I'll take 10% lower. That happens very fast. With two to 3%, it can happen. Where I've been thinking about doing a research study, which it takes a lot. I've just been trying to think about it, is trying to figure out where people are on their mortgages, what kind of equity positions they have, and therefore what kind of sensitivity to shocks in price could a municipality or a state withhold. What I will say is individuals who have been in their home for fifteen years likely have an equity position that they can weather quite big downturns because houses have doubled since 2020, which means if they halved, those people are still fine. I do feel that everyone who's bought since 2020 is in an equity position where they might be very sensitive. That being said, we do know that there's been a lot of cash purchases within that. So their equity position would likely be okay even if they took a loss. So it's I've been trying to figure out methodologically how to get that data. It's it's next to impossible, but there are ways to figure it out. And I'm just trying to figure out what is our sensitivity. I would say we are within the threshold of overbuilding and having a crisis. I wanna figure out exactly how close.

[Marc Mihaly (Chair)]: Joe, I take it. You have to take off at eleven ish?

[Dr. Joe Ament (University of Vermont)]: I have a meeting at eleven, but this has been a joy, so I will tell them that I'm gonna be late.

[Marc Mihaly (Chair)]: Okay. I'd like to know, and if could do it by email to Miriam, are there and are you alone, or are there other people whose research and opinions agree with you?

[Dr. Joe Ament (University of Vermont)]: That's a great question. I thought I was alone, or at least I thought I was a weirdo in saying this. There is one paper that I have found that looks at house housing surpluses. And it shows that rather than a housing shortage in The United States broadly, we've got a broad housing surplus. There are about four to six municipalities that actually have some shortages. Everyone else has a surplus. One study. So I knew I was sort of alone. But when this seven days article came out, you would not believe, you might actually, but the response that I have gotten. I have received emails, I've received hundreds of emails a day. Everyone I know has texted me and my wife, like people are largely in agreement with me to at least to say, thank you for thinking about something other than lack of supply, that we actually have wealthy individuals driving a problem here. So I would say in the literature, I'm alone somewhat. And in Vermont, thought I was gonna be a little bit weird, and it's turned out that I am not weird at all. And this is what people have been I think it's three things. I think it's a change in the narrative that they're refreshed to hear. It corroborates what they might have been thinking. And then the other third people think I'm crazy. And that those are sort of the buckets that I've seen, but it's been overwhelming that that that people agree with this story.

[Marc Mihaly (Chair)]: Any further questions by the committee? Thank you. Joe, a thousand thank yous. I have a feeling maybe you haven't seen the last of us.

[Dr. Joe Ament (University of Vermont)]: Yeah. That's great. I mean, you all are a complete joy to chat with. It was it was really a pleasure to speak with you, I appreciate being invited. And feel free to reach out. Miriam knows how to get ahold of me.

[Marc Mihaly (Chair)]: Okay. Thank you very much.

[Dr. Joe Ament (University of Vermont)]: Thanks all, and you take care.

[Marc Mihaly (Chair)]: Okay. Take care. Members of the committee, a couple of things before we adjourn. One is I'm just letting you know that a version, a very truncated version of our landlord tenant bill passed out of senate out of the senate judiciary committee where it was really held up and will five zip and will now move to senate economic develop get it out. But I'm not sure. The importance of that is, I think you all know, if the senate doesn't move a bill, well, then it dies because there's nothing to conference. It just did. If the senate moves it and it comes back in a form that is, it it will be referred to us, and we will have a quick choice, which is do we concur or do we request a conference? I suspect it will come back to us in a form in which this committee will probably elect the conference, but it's good news that it passed out of that committee, because without that, it was never gonna happen at all. The other thing I'd like you to think about is, in light of this testimony, what's next? This is unfortunately a very politicized issue. I do think it would be good for us to get to the bottom of it. Should we have, for example, should we ask the people who came to us yesterday from the Department of Taxes and others who were behind the growth numbers, should we have them back in after they've had time to absorb this study and think about it? I mean, my first reaction is, I'd really like to know what they have to say in light of the assertion that recent out migration numbers means that they ought to be recalculated. Anyway, I would appreciate you all giving thought to that and letting me know what you think, because we do have time in the ensuing week to have more testimony if we want we want to spend time on it.

[Thomas "Tom" Charlton (Member)]: Would our state economists have insight into some of the market forces that Joe was talking about?

[Marc Mihaly (Chair)]: You mean, we have economists, By state economists, who do you mean? Like the people who are hired by the legislature to as our economists? Who?

[Thomas "Tom" Charlton (Member)]: Who? I don't have a specific person in mind. Just any that might any economist, really.

[Marc Mihaly (Chair)]: Well, we did have we did have some, but but we can look into that.

[Joseph Parsons (Member)]: I think he makes a very valid point of, I mean, one of the metrics you're using to come up with your number is not only off, it's completely inverse of reality of the reality that we now know. And that warrants it re warrants a second look, I'd say, and maybe a recalculation. Yeah.

[Marc Mihaly (Chair)]: He is making the point. I I realize he's making the point that this out migration is not a dip, but rather that, remember what he said early on, I'm not saying he's right, I'm just absorbing it, he said early on, still in the post COVID period, even though we think we're not, I think what he's referring to is, we had this huge in migration because of COVID, and now, and maybe that was causing the problem, and now we're seeing that level out as people migrate out, back out. Anyway, yes, Elizabeth, I see you have your hand up.

[Elizabeth Burrows (Member)]: Thank you, Marc. If we're going to have an economist talk about this, I would really like to know what the implications are in other areas such as the impact to the education fund based on property taxation and the of the other possibilities brought by the Act 181 and other Act two fifty reforms, which allow and also current use and so forth, because I think it all is tied together. It's not just housing, it's property. And we don't look at the financial implications for any of that over a long period of time.

[Marc Mihaly (Chair)]: Got it. It's important. Okay, tomorrow, do we have anything? Okay, so tomorrow our testimony here begins after the floor, whenever that is. Other than that, we do not have any more testimony today, which is a good thing because it gives you an hour before or a couple hours before what appears to be a very long blood study. According to BA, yes, I think she shows us going through 05:30. Did anyone do it? I'll be starting a baseball game. Oh, let's let's