This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and 开云体育.
A marquee infrastructure financing program that鈥檚 meant to spur housing in smaller towns has passed a key hurdle in the Legislature 鈥� but Gov. Phil Scott, senators and housing boosters say House lawmakers have added too many restrictions for the program to work.
鈥淚t鈥檚 just much too complicated for anyone to understand, and will not be utilized by small communities,鈥� Scott said at his regular Wednesday press conference. 鈥淚t鈥檚 taking a step backwards.鈥�
The initiative, called the Community and Housing Infrastructure Program, would allow municipalities or developers to borrow money for infrastructure like water lines, roads and sidewalks for a particular housing project 鈥� and then use the increased tax revenue from the development to pay off the infrastructure debt.
Proponents say it provides a new avenue to pay for costly public infrastructure 鈥� without the Legislature or municipalities needing to cut a check, or developers baking the cost into the price of housing.
Critics have argued the tax incentive鈥檚 benefits don鈥檛 outweigh the foregone property tax revenue to the state鈥檚 overstretched Education Fund. In that vein, the House Committee on Ways and Means placed a $40 million annual limit on the amount of tax increment dedicated to housing project debt before advancing the bill on Wednesday.
But housing advocates say that cap severely limits the number of homes that could be built through the program amid Vermont鈥檚 acute housing shortage.
鈥淲hy do we want to cap the ability to see that housing growth happen, especially if we鈥檙e using this program to incentivize it in smart-growth areas, whether that鈥檚 rural or urban?鈥� said Megan Sullivan, a lobbyist for the Vermont Chamber of Commerce.
The tax-writing panel also added a test that would occur as part of each housing project application to determine whether a project would not have occurred without financing from the program.
鈥淭here鈥檚 actually development happening all over the state,鈥� said Rep. Emilie Kornheiser, D-Brattleboro, who chairs the committee. 鈥淲e want to make sure that we aren鈥檛 putting public dollars towards projects that would happen regardless.鈥�
Yet CHIP鈥檚 proponents point out that Vermont is currently building less than half the homes needed annually in order to meet demand, ease housing vacancy rates and make progress on eliminating homelessness, based on .
House lawmakers also added a host of other rules to the program, including floor-area minimums for housing, location criteria, affordability incentives, and additional layers of oversight. Their version of the bill also sunsets Vermont鈥檚 existing tax-increment financing program in 2028, a move intended to assess its usefulness going forward, Kornheiser said.
Taken together, the CHIP鈥檚 proponents say the House鈥檚 direction curbs access to the program too severely.
鈥淲e would probably say they have put maybe so many guardrails in place that it keeps people out of being able to participate,鈥� said Sen. Kesha Ram Hinsdale, D-Chittenden Southeast.
The housing package that contains CHIP still needs to clear the House floor. After that, Ram Hinsdale said she expects the bill to ultimately land in a conference committee, where House and Senate lawmakers can hash out their differences of opinion.
鈥淭his is by far the most significant housing action in front of the Legislature this session,鈥� said Miro Weinberger, former Burlington mayor and executive chair of Let鈥檚 Build Homes, a new housing advocacy group that has thrown its weight behind the CHIP proposal. If lawmakers fumble the policy, he said, it 鈥渨ould just be a breathtaking legislative failure.鈥�
