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The Future of Vermont Depends on an Equitable Housing Market
By Megan Sullivan, Vermont Chamber of Commerce.
As the pandemic approaches the two-year mark, businesses continue to experience a severe workforce shortage. The harsh reality is that even if every young Vermonter committed to staying here into adulthood, we still wouldn’t have enough people to fill all 23,000 open jobs. While funding workforce development and capital investment opportunities remain crucial, there is only one ultimate solution. We need more people to call Vermont home. This requires a robust and sustained marketing effort of Vermont as a welcoming community, with job opportunities and an unmatched quality of life. It also requires taking immediate action to address the glaring barrier to workforce growth: an overwhelming lack of suitable and affordable housing stock for middle-income families.
While our members have raised this issue for years, the pandemic has heightened the impact on recruiting and retaining workers. One manufacturer in Essex has hired new Americans for over a decade as the core of their workforce with most of their team originally from Nepal or Bhutan. With years of good wages and benefits, these valued employees dream of deepening their community commitment through home ownership. One couple spent years searching for middle-income housing to no avail and just this past year gave up and the moved their entire extended family to Scranton, Pennsylvania, where they were able to find modern, efficient, single-family homes. Without change, this story will be repeated, exactly the opposite of our policy goals to attract a diverse population and welcome them into our communities.
If we don’t address the availability of suitable housing options, we cannot expect to attract the new population we so desperately need. According to Zillow, the average home listed in Vermont is valued at $326,063, up from $205,000 in 2019. The housing stock that was once available to the middle-income demographic is dwindling. In 2020 the Vermont housing needs assessment found the year-round housing stock increasing at only 0.6% per year. Considering the amount of aging housing stock removed from the market each year, Vermont is set to lose 1,247 renter units and 1,392 owner housing units by 2025 due to destruction, conversion to other usage, or other causes.
Over the last year, Vermont committed significant funds to develop affordable housing, prioritizing housing insecurity for our most vulnerable. These are crucial discussions; however, in this pivotal moment, with unprecedented federal funds available, we have an opportunity to expand our focus and invest in strategic solutions aimed at our workforce crisis by addressing middle-income housing. To achieve this, the Vermont Chamber is focused on five housing initiatives that directly address this problem:
- The Homeownership Development Proposal addresses housing supply by creating opportunities for middle-income families. This program will confront the value gap between the cost of building a modest home and the selling price. The program will also maintain a subsidy in the home, so it remains at a modest price point while allowing homeowners to build equity, an essential factor to creating generational wealth and eliminating generational poverty.
- National moving trends indicate families are migrating to micropolitan areas and small towns. Vermont can capitalize on this by ensuring predictable housing investment practices in downtowns and neighborhoods by modernizing State and local land use regulations, making designation programs more accessible, and expanding Downtown Tax Credits to Neighborhood Development Areas where housing is concentrated.
- Increasing supply doesn’t always mean building new. The State should provide regulatory and financial incentives to convert commercial buildings into housing. With remote and hybrid work arrangements growing, the need for office space will be reviewed over the next few years. These buildings are already located in smart growth areas, presenting an advantageous opportunity to redeploy them as housing units.
- Furthering investments in initiatives like the Vermont Rental Housing Investment Program will change the trajectory of housing stock being removed from the market each year by rehabilitating uninhabitable rental stock and will create new accessory dwelling units within existing structures.
- Finally, for Vermont to attract more people, we need to understand how short-term rentals impact housing scarcity and affordability. Towns researching this independently have already produced shocking data on the number of units removed from the housing market to instead be managed as short-term rentals. The State should begin collecting this data to inform housing policy.
The time for action is now. The current housing market trajectory will only exacerbate Vermont’s workforce crisis. To change that, we have a responsibility to invest in solutions that address housing for middle-income workers to stay in the communities they love and ensure the opportunity of moving to Vermont is achievable for all. The future of Vermont depends on it.
Megan Sullivan, of Jericho, is the Vice President of Government Affairs at the Vermont Chamber of Commerce, whose mission is focused on creating an economic climate conducive to business growth while enhancing Vermont’s quality of life.
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