By Briana Bocelli, a freelance writer for True North Reports. 12/6/17
“The House and Senate tax bills could be detrimental to an already struggling affordable housing situation in Vermont, according to estimates released by the Vermont Affordable Housing Coalition.”
(This piece first appeared on the Burlington Free Press opinion page on September 20, 2017)
Safe, stable and affordable housing is essential for a community to thrive economically, socially and culturally. Vermont continues to struggle with housing affordability, and unfortunately the state’s largest city of Burlington is no exception.
A Burlington resident needs to earn over $26 an hour to afford the fair market rent for a two bedroom apartment – that’s more than $5 per hour above the national average.
This is troubling and we hear about the ramifications from families and seniors who can’t find places to live, from young people who are choosing to leave the state for more affordable areas, from agencies serving the homeless, and from our employers who struggle to find qualified employees due to the high cost of housing.
There are several components to addressing the issue of affordable housing, and one of the most critical is the need for capital investment to build new housing and to renovate existing properties. While many additional homes have been built over the past several years, many more are needed to accommodate the growth of 2,375 new households projected for Chittenden County by 2020. Current production is being absorbed into the market quickly, and the long-term vacancy rate for rentals still hovers between 1 and 2 percent, putting supply and demand out of whack.
Not surprisingly, according to Census data, over half of Chittenden County renters are “cost-burdened,” meaning they pay too much of their income for housing, leaving them without enough for other basic necessities.
In terms of affordable housing, last month the Champlain Housing Trust had just five vacancies among their 2,000 plus apartments, and only one vacancy in Chittenden County. Cathedral Square Corp. had over 800 seniors and people with special needs on its waiting list looking to move into affordable housing.
Furthermore, the effective vacancy rate for subsidized rentals in Chittenden County was literally 0 percent for all bedroom sizes. These shocking numbers help explain why the Burlington Housing Authority typically measures their waiting list in years rather than weeks or even months.
These numbers are astonishing, but the good news is that there are clear steps we can take to address the cost of housing. No one project will be the panacea for Burlington’s affordable housing crisis, but developments like the proposed Cambrian Rise project in Burlington’s North End can significantly improve housing options for residents and relieve the pressure on a strained system.
As proposed, Cambrian Rise will be a 739-apartment mixed-income housing neighborhood with an impressive number of affordable homes. The neighborhood will offer Burlington residents housing options for all income levels.
Under Burlington’s inclusionary zoning ordinance, the development will include 128 affordable rentals for families and seniors with household incomes of less than 65 percent of the Chittenden County median income. In English that translates into housing that is affordable for a one-person household making $37,500, or $53,600 for a family of four.
However, with federal, state and local dollars available to Champlain Housing Trust and Cathedral Square, which are partnering to help create Cambrian Rise, many apartments will be even more affordable.
Furthermore, another 60 homes will be affordable to homebuyers earning below 75 to 80 percent of median income, or below at most $46,150 for a single individual and $65,900 for a family of four. In all, the development will offer 188 permanently affordable homes to low income Vermonters. In addition, Cambrian Rise will offer “workforce housing” for sale and rent targeted to more moderate income people up to 120 percent of the median income. Our working families, our seniors and people with disabilities, and our employers desperately need these new homes.
Cambrian Rise not only offers a diverse neighborhood, it is also a model for sustainable development. The project features alternative transportation options, energy efficiency, a state of the art stormwater system to protect the lake, and a conserved 12-acre public park – giving us continuous public access to Lake Champlain from Perkins Pier to North Beach.
Convenient access to the bike path, car share opportunities and a heated bus terminal for year-round use will ease the financial burden for residents of the neighborhood. This mixed-use development is a model for the future, where diverse residents of all income levels, abilities and ages can live, work and play in one neighborhood.
Erhard Mahnke, of Burlington, is coordinator for the Vermont Affordable Housing Coalition. The Vermont Affordable Housing Coalition is a partner organization in the Thriving Communities- Building a Vibrant Inclusive Vermont campaign.
” … we applaud efforts in Montpelier and are excited to work with local municipalities that want to make bold investments in affordable housing, realizing that such investments are winners in accomplishing Governor Scott’s three priorities: supporting our economy, making Vermont more affordable for Vermonters, and protecting our most vulnerable community members. Several proposals have been made – we welcome all efforts that satisfy each of these three objectives.”
by Michael Monte
There seems to be a burst of housing construction in Chittenden County, and some are even suggesting that the tide has turned in making the rental market more affordable, or that the vacancy rate is high enough, or we’re building too fast. At the Champlain Housing Trust, our assessment is that although the trend line is improving, more needs to be done – especially for low wage earners priced out of the market, and certainly for the 350 people on any given night in the county who have no home at all.
According to Mark Brooks, co-author of a report that provides a comprehensive semi-annual analysis of the real estate market, the long-term market vacancy rate in Chittenden County is 2%. The December, 2016 report indicated a market vacancy of 4.4% – a number offered as a point-in-time rate of what’s available without taking in consideration the timing of apartments just completing construction or other factors.
This lower rate is a more accurate assessment, as it takes into account the time in which newly-constructed apartments are absorbed into the market. Most will agree that a 5% rate will yield a healthy market for renters and owners alike. While we were close at a point in time in December, we’ve not sustainably reached this target.
In the last two years alone, over 1,200 apartments have been constructed. The new construction does give some renters more choices: according to the report, “…landlords are offering incentives such as one month free rent, flexible lease terms, or lower rents.” Rent rates across the board have been stable and closer in-line with inflation – unlike the previous six years.
New households are forming every day in Chittenden County, and large numbers of people are still commuting long distances from less expensive housing in more rural counties to get to work. In fact, in 2002, 73% of Chittenden County workers lived in the county; that percentage dropped to 63% in 2014. Lack of housing opportunity is leading more and more workers to commute longer distances.
Demand is still high as younger people, sometimes saddled with high college debt, are renting instead of purchasing a new home. And employers are still viewing rents and housing availability as being barriers to economic growth. A representative of one business told us recently that her company added jobs in the mid-west instead of Burlington because of the lack of housing.
In order to push the underlying market rate from 2% to a sustained 5%, we need to continue to provide additional growth. Can we sustain this growth and increase the vacancy rate in the future? We hope so. But next year fewer apartments are on track to be coming on line, less than half the number built this year. And although there are an additional 2,400 apartments in the development pipeline county-wide, those won’t be here next year, or even the year after that.
As importantly, the resources available for affordable housing are seriously limited. Although there is enormous opportunity and capacity to build more affordable housing, the equity or cash needed to insure that rents remain affordable are not available. Non-profit owners continue to struggle with meeting the demand for more affordable housing, as evidenced by long waiting lists for subsidized housing or the 150 applications CHT gets every month for the 20-25 apartments available.
That’s why we applaud efforts in Montpelier and are excited to work with local municipalities that want to make bold investments in affordable housing, realizing that such investments are winners in accomplishing Governor Scott’s three priorities: supporting our economy, making Vermont more affordable for Vermonters, and protecting our most vulnerable community members. Several proposals have been made – we welcome all efforts that satisfy each of these three objectives.
————————————————————————————————————————-
Michael Monte, is Chief Operations & Financial Officer at The Champlain Housing Trust, founded in 1984, it is the largest community land trust in the country. Throughout Chittenden, Franklin and Grand Isle counties, CHT manages 2,200 apartments, stewards 565 owner-occupied homes in its signature shared-equity program, offers homebuyer education and financial fitness counseling, provides services to five housing cooperatives, and offers affordable energy efficiency and rehab loans. In 2008, CHT won the prestigious United Nations World Habitat Award, recognizing its innovative, sustainable programs.
The insufficient supply of housing at a range of affordable prices, especially for rental housing, has important negative impacts on local economic development. Housing costs and availability impacts adequate workforce availability. The causes of high housing costs are multiple but a few factors are controllable by local municipalities, counties and regions with the understanding and political will. Exclusionary housing development zoning regulations for example fall into that category. Housing supply constraints affect local employment opportunities and wage dynamics especially in areas where the degree of zoning regulation barriers are more severe.
It’s getting much tougher to find good jobs in areas with adequate affordable housing opportunities. Even when job markets improve, the absence of strong sustained real income growth means that for more and more communities, the relative cost of housing will continue to climb at the same time the availability of adequately affordable housing is decreasing.
Research shows (see, “The Role of Affordable Housing in Creating Jobs and Stimulating Local Economic Development: A Review of the Literature” Center for Housing Policy) that adequate affordable housing in communities has benefits extending beyond its occupants to the community at large. Without a sufficient supply of affordable housing, employers and entire regional economies can be at a competitive disadvantage because of their increased difficulty attracting and retaining workers.
The excellent study referenced above provides a clear discussion of this issue. The primary thesis of the study is that developing more affordable housing in communities creates jobs — both during construction and through new consumer spending after the homes have been occupied. The positive impacts of building affordable rental housing are on par with and in many respects exceed the impacts of developing comparable market-rate units.
The take away from this is that housing affordability, inclusive communities and vibrant economic development, are intertwined in substantial ways. Communities can positively change the dynamics with various policies including favoring appropriate density in zoning laws.
A higher percentage of people are renting their homes in the U.S. than has been the case for many decades. The market is responding with more rental housing development – but there is a big glitch – too much of that new rental housing now being developed is on the high end of the affordability spectrum.
This article: “Surge in New Rental Construction Fails to Meet Need for Low-Cost Housing,” by Irene Lew, at the Harvard Joint Center for Housing Studies, offers a thorough and informative analysis of the current situation – which is not a good one for moderate to low income people in our communities.
“…the housing affordability crisis has shown little signs of abating in recent years, as renter incomes continue to lag behind rising housing costs. Though there has been a ramp-up in rental housing construction, much of this new housing is intended for renters at the upper end of the income spectrum…”
This is a partial remedy to the affordable rental shortage that afflicts municipalities all over North America, including Vermont. It also affords an optional living arrangement for older people who want to age in place. In Vancouver, these appendages are called “laneway houses,” and some of them are pretty handsome. There’s plenty of room for additions like this in Burlington, even if we don’t have alleys — and in plenty of other Vermont communities, too.
It’s just a couple of miles from the neighborhood where complaints about a proposal for a smaller affordable housing complex prevailed.First, the bad news:
This might not be in the spirit of affirmatively furthering fair housing. That site, next to a neighborhood of single family homes, might well be a “high-opportunity” location for affordable housing in a city with a median family income of $81,000. Whole Foods, we suspect, does not as a general rule move in to low-opportunity areas.The good news comes in two forms, tangible and intangible.
by Downstreet Housing and Community Development, with an array of collaborators. These are studios and one-bedrooms on Barre Street, all a short walk to downtown. This is the sort of transit-friendly positioning that we’d like to see more of.
who also happens to be a member of the board of J. Ronald Terwilliger Foundation for Housing America’s Families. In an opinion piece, Brown lamented that housing has been missing from the debates, and said that if he were moderator, he’d ask the candidates what they’d do about the shortage of affordable rentals. Meanwhile, another opinion piece, by foundation president Pamela Patenaude in a housing industry publication, calls for an increase in federal support for the low-income housing tax credit. Hear, hear.The Greater Boston Housing Report Card 2015 is out, and it’s an eye-opener. Prepared for the Boston Foundation by the Dukakis Center for Urban and Regional Policy at Northeastern University, it’s a detailed analysis of Massachusetts’ housing-unaffordability crisis –a crisis that results, in part, from not enough housing being produced. What accounts for the insufficiency?
“We have failed to meet housing production targets because there is no way to do so given the high cost of producing housing for working and middle-income households.”
That’s from the executive summary, which goes on to make the same point in another way:
“(T)he cost of developing new housing for working and middle-income households has become prohibitive in Massachusetts. Radical remedies will be needed to overcome the barriers to housing production …”
And what are the barriers? High development costs, of course ($274 per square foot for urban projects, of which $159 is construction and $41 is land acquisition). And zoning regulations that limit density and where multi-family projects can be built.
Now, you might be thinking, what does any of this have to do with us, up here in our little, rural, unprepossessing state? Metro Boston is another world — far pricier and denser than any place around here.
Well, we’d argue that the problems that Massachusetts is facing are problems we share — albeit on a smaller scale. And remember, Massachusetts has an affordable housing zoning law (Chapter 40B) that’s arguably stronger than what’s on Vermont’s books.
Yes, it would be nice if we could get a comparable report card for housing in Vermont, but failing that, perhaps we can learn something from what the one for Massachusetts.
The report notes that “Although there is a lot of vacant land, most vacant sites are not zoned for multi-family residential development.”
As for zoning:
“Highly restrictive zoning, present in virtually every one of the state’s 351 municipalities, creates an artificially high barrier to development. It pushes developers to propose smaller projects (i.e., fewer units) and smaller units (i.e., fewer bedrooms per unit) in order to reduce the perceived impact on the neighborhoods and — in the case of larger units attractive to families with school-age children — the perceived impact on the town or city’s education budget. The complexity of getting zoning changes approved dramatically extends the development period and increases carrying and soft costs. The cumulative effect drives up both the cost of development (seen in the high level of site costs, financing, and soft costs) and rents.
“Thus, significant resistance to any change in the local community ambience has also meant that local support has heavily favored low-density, smaller projects, both of which are far more expensive to produce. Higher density housing maximizes the efficiency of land use, and larger projects create economies of scale in development and construction. Massachusetts residents opposed to zoning for multi-family housing at 20 units per acre are astounded to learn that the city of Paris — a pretty nice place to live with undeniable “character” — has a density of approximately 120 units per acre!
“When developers are given permission only to build projects of very low density, they will do so. As a result, the housing that is built will be expensive and affordable only for the very well-to-do or, if public subsidies are involved, to people with very low incomes. Working and moderate-income families will not be able to afford these units. This state of affairs, of course, causes the average cost of producing multifamily housing in the Commonwealth to increase.”
Here we note that merely increasing the housing supply (as some are advocating) isn’t going to solve the affordability problem if the added supply happens to be … luxury-scale and thus … unaffordable to all but the wealthy.
Nowhere, seemingly, is the U.S. housing crisis more acute than in California.
So you might suppose that here, in unassuming, modestly-overpriced Vermont, we can safely ignore what’s unfolding in California. To the contrary, it does make sense to pay some attention, for these reasons:
Any dreams you have of moving out there should be dispelled by this short film, “Million Dollar Shack,”
a middle-class lament is filled with tales of egregiously over-priced properties, skyrocketing rents, absentee overseas investors, etc.
If you think New Hampshire is a socio-political backwater, from its license plate slogan to its lack of an income tax, think again. The state has been grappling with its affordable housing shortage for years — certainly since 2008, when a “landmark law” (as state housing officials termed it) sought to goad towns into taking action.
New Hampshire’s Workforce Housing Law mandates that every municipality provide “reasonable and realistic opportunities” for the development of workforce housing. What is “workforce housing”? As defined by the law, it means housing for that’s affordable (a cost burden of no more than 30 percent of income) for families making up to 100 percent of median income, and for renter families who make up to 60 percent of median income. (Click here for the income numbers.)
Now, “reasonable” and “realistic” may be subject to varying interpretations, as a recent discussion at a City Council meeting in Londonderry suggests. Londonderry officials are trying to open up more opportunities after an examination of the towns ordinances last year revealed impediments. The current push, as this news article indicates, is both for multi-family developments and increasing density in single-family zones.
The latter got pushback at the meeting. (We’d recommend that people in Londonderry and elsewhere watch our “Thriving Communities” webinar when it becomes available on our site, because it shows, among other things, how neighborhoods of the same density can be designed well (aesthetically pleasing) or badly (cookie-cutter ugly).
In any case, we’d argue that this kind of discussion – from the opening up of restrictive land-use practices to the acceptance of residential density in workable and appealing forms — could be going on in Vermont towns, as well. Never mind that Londonderry, N.H., with population of about 24,000, is bigger than every Vermont community except Burlington. The same challenges apply here, on a Vermont scale.