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.