Workforce Housing

In the first week of the session, the House Committee on General and Housing came out of the gate with a sharp focus. The housing crisis is real, state dollars are limited, and lawmakers are seeking clear answers on what is working, what is not, and what comes next. The Vermont Chamber of Commerce testified with firsthand insights from businesses, builders, and communities struggling with housing shortages that directly affect workforce recruitment and retention. Other organizations reinforced these themes, pointing to both effective tools and persistent barriers.

Several state housing programs are demonstrating real results. The Vermont Housing Improvement Program (VHIP) in particular is accelerating unit creation while also bringing new builders into the market, including small, local, and first-time developers who are critical to expanding housing production statewide. Programs such as VHIP, the Middle-Income Homeownership Development Program, and the Rental Revolving Loan Fund are stretching limited funding and lowering per-unit costs, outcomes that are especially important as resources tighten.

Testimony also made clear that regulatory and implementation challenges are limiting the full potential of these investments. Issues with the rollout of Act 181 and HOME act, persistent challenges with exclusionary zoning as well as restrictive deed covenants and bylaws, and increasing regulatory gatekeeping are adding cost, delay, and uncertainty to projects. These hurdles reduce the return on public investment and make it harder for developers to move housing projects forward.

These concerns mirror what Vermont employers are reporting. The 2025 Vermont Business Climate Survey found that housing availability and affordability remain among the top barriers to hiring and business growth, with many employers linking workforce shortages directly to housing constraints. The Chamber’s testimony reinforced that without addressing regulatory and implementation barriers, even strong programs will struggle to deliver housing at the scale Vermont needs.

Housing is economic infrastructure and central to Vermont’s long-term growth. The Vermont Economic Action Plan identifies housing production as a foundational strategy for supporting workforce growth, affordability, and economic resilience. The Vermont Chamber will continue working with lawmakers to protect and scale what is working, improve implementation where it is falling short, and ensure state policy supports the housing supply Vermont’s businesses, workers, and communities depend on.

The House Committee on General and Housing and the Senate Committee on Economic Development, Housing, and General Affairs convened this week for an out-of-session hearing to assess how federal housing cuts affecting Vermont families and communities. The impacts are both immediate and long term, affecting families who rely on rental subsidies today and limiting the state’s ability to finance new housing through federal tax dollars and credits in the years ahead.

Testimony from the Vermont State Housing Authority made clear that federally funded voucher programs are stretched to their limit. For the first time, the payment assistance fund for housing authorities no longer has any reserves, and by January, public housing authorities may be unable to make voucher payments for hundreds of households. Representatives from Vermont’s federal delegation also highlighted steep reductions to Community Development Block Grants, stalled HUD programs due to the federal shutdown, and growing uncertainty in critical housing initiatives.

The loss of federal funding is felt especially hard in Vermont, where construction is already among the most difficult and expensive in the nation. The extremely state’s extremely limited supply of affordable and available housing leaves a growing number of Vermonters dependent on subsidies simply to live in their own communities. Overlapping regulations, complex program requirements, and slow permitting processes continue to make drive up costs and create uncertainty for developers. While these systems sustain a network of programs and agencies, they too often divert energy away from what matters most: building homes that all Vermonters can afford.

The Vermont Chamber has long maintained that while funding is essential, Vermont cannot spend its way out of the housing crisis. Real progress depends on policy changes that simplify systems, reduce costs, and prioritize housing over bureaucracy. To truly put housing first, Vermont must make it faster and less expensive to build across income levels and for all types of developers, not just large nonprofit entities.

Looking ahead to the 2026 session, lawmakers discussed a slate of housing priorities that will shape Vermont’s path forward. Central to that effort will be continued permit and appeals reform, along with cleanup from the 2024 Act 250 bill, which are critical steps toward lowering costs and shortening development timelines. Additional areas of focus include landlord-tenant and short-term rental reform, streamlining tax sales for abandoned properties, expanding off-site construction, and strengthening programs such as the Vermont Rental Housing Investment Program (VHIP) and the Community Housing Investment Program (CHIP).

Lawmakers also raised the idea of creating a new permanent tax to fund affordable housing, but with Vermonters and businesses already stretched to the affordability brink, it remains unclear where such funding would come from. Senator Randy Brock closed the hearing by urging committees to reduce the time it takes to build, improve accountability in program operations, and create a lean, efficient approach that prioritizes building housing over building bureaucracy.

The Vermont Chamber will continue to advocate for reforms that lower costs, accelerate development, and ensure every public and private dollar invested translates into more homes for Vermonters.