Yeah, I think we are.
Two items in the news:
First, from VTDigger’s Erin Petenko, sales of Vermont homes to out-of-staters reached historic levels last year, presumably driven by the pandemic, and
Second, from Seven Days‘ Anne Wallace Allen, the home building industry has given up on large swaths of Vermont and concentrated its activity in high-flying Chittenden County.
We had a big affordable-housing problem back when we thought coronavirus was something you caught from a tainted beer. It’s gotten worse since then, and the trends are all in the wrong direction.
That $37 million affordable housing bond we proudly enacted in the pre-Covid days of 2017 looks like a drop in the bucket. And Sen. Michael Sirotkin’s proposal for an even bigger Housing Bond 2.0, which has languished in the Legislature for the past two years*, is looking more and more vital.
*Thanks in no small part to the opposition of Treasurer Beth Pearce, whose aversion to public debt rivals the Scroogiest of conservatives.
Petenko’s story would be a good news/bad news kind of thing, except that I suspect a lot of the 38% increase in home sales to non-Vermonters was driven by affluent outsiders seeking getaway housing. If those people relocated to Vermont for good, they’re contributing to the economy. But every home that’s bought as a pied-a-terre is an economic setback because absentee owners aren’t spending any money here, and they’re exacerbating the affordability problem.
We can’t check home buyers’ IDs at the state line, so we’re at the mercy of this market boom. I can only think of two things we could do: Crank up property taxes for second homes (and I mean really cranking them up, not just a quarter-turn of the spigot), or do whatever we can to encourage affordable-housing construction.
That brings us to Allen’s piece, which says that many home builders don’t venture outside Chittenden County because they can get so much more for a house in Vermont’s only growth market. And, they say, obstacles to construction are too much to overcome in many areas. Patrick O’Brien of S.D. Ireland:
“I hate to say it: There are no-growth towns,” said O’Brien. Without some background knowledge of a municipality’s political climate and permitting processes, he said, it doesn’t make financial sense to build somewhere new. “There are no towns that roll out the red carpet,” he said.
He specifically referred to Montpelier. Our capital city is prime for growth, but local opposition is a bear. See the recently scuttled plan to build a new hotel and parking garage downtown, or the still-vacant-after-all-these-years Sabin’s Pasture. It’s a big vacant parcel less than a mile from downtown that’s been sitting there for years, thanks to staunch NIMBYism from the affluent homeowners on College Hill. They like having a free, rough-and-tumble “park” in their backyards and don’t want any houses or apartments junking it up. But really, the entire city is a wellspring of NIMBY.
Which is fine, if that’s what you really want. But the city’s property taxes are very high, its school enrollments are shrinking, and infill development is much better for the environment than countryside sprawl.
Looking at the question more broadly, I wouldn’t want to take home builders’ word at face value. They’ve been trying to gut Act 250 for years. But their concerns are worthy of attention, and I’d like to see what Vermont’s environmental groups would say about how to effectively address our housing crisis. Allen could have asked some of them, but hey, she’s a business reporter who’s reporting on business.
The one bit of good news is that, despite the banishment Sirotkin’s bond proposal to legislative purgatory, affordable housing is in line for a significant investment. Gov. Phil Scott has proposed using $250 million in federal Covid relief funds to build affordable housing; the House approved a budget that spends $50 million for the purpose. Either figure would be a big win for affordable housing — but would it be enough to make a dent in the problem?
That’s unclear. Scott’s plan would build a total of 5,000 housing units at what seems like a low, low price of $50,000 per unit. Allen says many developers won’t bother building median-level housing ($250,000 to $350,000), so I don’t know what the state can expect to build for 50 grand a pop. Especially given another passage in Allen’s story, which says that prices for building materials have gone through the metaphorical roof.
But anything is a bonus, given the situation we’re in. The big unanswered question is, will outsiders continue to invest big bucks in Vermont houses? Or was this a pandemic-specific phenomenon? If things get back to “normal,” we have at least a chance of addressing the housing crisis. If out-of-staters continue their spending spree due to fears about pandemics or big-city crime or rising sea levels, then Vermonters will continue to be priced out of the market.
4th para, million not billion
…and pretty soon we’re talking real money.