Through a partnership with AARP Vermont and as part of AARP’s Livable Communities Technical Assistance Program, SGA evaluated the proposed Community Housing Infrastructure (CHIP) program for its potential impact on housing development. The CHIP program offers a new approach to fund infrastructure for housing at the project scale —a common and challenging funding gap to make housing in established communities.. The program presents particular potential to encourage housing in well-connected locations with good access to resources, civic facilities and economic activity.
On Wednesday, May 7, SGA testified before the Vermont House of Representatives’ House Committee on Ways and Means on how Vermont’s proposed Community Housing Infrastructure Program (CHIP) supports capital stacks for much-needed housing in the state.
We presented our recent evaluation, which revealed that at least 24,000 additional homes are needed in Vermont by 2029. As the 10th most expensive state, half of all Vermont renters spend more than 30 percent of their income on housing, and a quarter spend more than 50 percent. Further, construction and land costs are high, while regulatory challenges that can delay projects and inflate costs. Given the high demand for housing and challenges with financing, and the more acute challenges with infrastructure costs in rural and small communities, Vermont is looking to strategies that offset the infrastructure costs to make projects feasible, particularly those with an affordable housing component that limits rental income.
“We find that when you plan for aging in place – and supporting communities to have ample housing close to services, transportation and community facilities – it’s beneficial for everyone in the community.” – Katharine Burgess, Vice President for Land Use & Development
Our analysis was based on two types of housing scenarios: a 60-unit mixed-income building in a dense area, and a smaller 4-unit adaptive reuse project. In both cases, we found that CHIP funding would fill key financial gaps, reduce risk for investors, and make it more likely the projects move forward. Without it, these developments could stall or fail—especially when delivering affordable to low and moderate income units and accessible units. Additionally, lenders and investors would likely view the project as less risky with public infrastructure support. By boosting feasibility early, the program helps deliver the right housing in the right places, supporting Vermont’s smart growth goals.
As part of his testimony, our Director of Research Michael Rodriquez shared that “this incentive program is based on a TIF (tax increment financing) style structure that gives a positive boost to an uncertain project with slim returns on investment. Think of how many units were on the edge but were not built…this program, this boost could have made the difference.”
SGA previously worked directly with Vermont’s Department of Housing and Community Development on Designation 2050, an assessment of Vermont’s state-level designation program, which informed Act 181 that made changes to the state’s land use and housing development laws and simplified the Designation Program to better provide development incentives.
The AARP Livable Communities program provides capacity to help AARP state offices guide policies and projects to support communities to be vibrant and accessible for people of all ages. Addressing housing needs is a vital goal for the Livable Communities Program, including supporting the delivery of homes appropriate for multi-generational living, aging in place and meeting accessibility needs. We look forward to continuing working together to support smart growth in Vermont.