Douglas addresses housing shortage 
By John Hausner 

For a couple of years now, politicians of all stripes have talked about the housing crisis in Vermont and their plans to address it. The governor proposed a New Neighborhoods bill to stimulate the development of housing by reducing the cost of permitting and passing the savings on to homebuyers. The Democratic majority in the Legislature disagreed without offering an alternative. Until now.

The bill passed by the House Committee on General, Housing, and Military Affairs, H.863, is a textbook example of legislation that purports to solve a problem while in fact doing nothing or even making it worse.

The problem of housing in Vermont is affordability. Vermont has a substantial housing shortage, particularly in the mid- to low-cost range, in large part because of a regulatory system that delays and adds costs to housing. The result is that families living in apartments or subsidized "affordable" housing who could afford to buy a starter home can't because there simply aren't any. That in turn backs up the housing market at those levels, pushing up prices.

Vermont had the tightest rental market in the nation last year and the third-lowest homeownership vacancy rate. The traditional system of "climbing the housing ladder" from a small apartment to a larger one, to a starter house and to a larger home is blocked. Vermont does well building traditional subsidized "affordable" housing for its most vulnerable residents, and the market produces expensive homes, but many middle-income, working Vermonters have been left behind.

The Democratic majority's response is to offer a bill that offers a meager incentive to towns to allow a few houses to be built in exchange for making it almost impossible to build houses anywhere else in the state. The bill also mandates creation of an unfunded mandate for creation of "affordable housing" in any new development -- to be sold at a price lower than the actual cost of construction, thereby substantially driving up the cost of every other home within any given new neighborhood -- making homes yet more unaffordable.

Cutting the fees for Act 250 in half sounds nice, but that's not the real cost of Act 250; the uncertainty, time, and ability for opponents to mount endless legal challenges. And the bill even includes the creation of a new regulatory bureaucracy for rental units with fees for landlords that will be passed on to tenants, making rents even higher. The problem isn't not enough regulation; it's too much.

The New Neighborhoods bill would let towns that already have a planning and zoning review process skip going through Act 250, essentially doing the same work twice. And towns would keep some of the new revenue raised by the increased value of the developed property for three years, so both the municipality and Education Fund start seeing more money immediately.

The governor's Urban Homesteads plan would provide incentives to convert upper floors in downtown buildings to condominiums, supplying needed downtown housing. The Democrats should be applauded for adopting the governor's "virtual land bank" proposal to make suitable surplus land owned by the state available to build affordable housing on.

But that's not enough to make up for the other provisions in this bill. The Legislature needs to pass New Neighborhoods and help make housing more affordable, not less.
 

John Hausner lives in South Burlington