by Don Keelan

There might be more than a few readers of my bi-weekly column who are unaware that for 40 years, I was involved in commercial and residential real estate development. Much of my effort was spent in seven states. Between 1993 and 2010, it was in Vermont.

Developing real estate in Vermont is much like it is in other states. The local and state reviews have notable parallels, especially regarding the State’s Environmental Act 250 review.  However, what distinguishes Vermont in developing a real estate project is the level of uncertainty, the costly aspect due to the litigious nature of abutters, and the absence of a younger generation of tradespeople. 

Vermont’s Act 250 gets a great deal of criticism in large part because it is painfully time-consuming to weave a project through its eleven sections and numerous subsections. The latter is the plethora of state and local agencies that must provide their ratification, and if you fail to obtain it, the application is denied. 

The process can be described as dealing with a giant octopus. The head is the regional Act 250 director, and the arms are the bureaucrats at the various agencies. Experience has shown that many of the bureaucrats are cooperative and helpful. Then, you have others who are authoritative and manifest such power by holding up the application review, asking for reams of additional data, only to ask for more. The state’s developers, engineers, and architects know who they are but are reluctant to take them on, fearing that their next project application will be side-tracked and delayed.

State land-use officials will echo that few projects are denied approval. True. What is not transparent is how many substantial residential and commercial projects have their applications withdrawn by the applicant due to the delay. The former Green Mountain College repurposing, in Poultney, is a recent example.

However, the above is a sidebar, but a valid reason for not wishing to build residential rental housing in Vermont. 

Putting forth, say, a 100-unit residential rental project in any Vermont county–with the notable exception of Chittenden, Washington, and Franklin–would be tantamount to self-inflicted trauma. Objectors would be drawn to social media–nameless, if possible–proposing, “Why would we want ‘those people’ living in our community?” Their objections to the proposed project would be camouflaged; “it would be an additional burden on our public wastewater, water, police, and fire services, add to our school costs, and be additional traffic.” All of which amounts to intellectual dishonesty on steroids.  

Even so, putting up with local intellectual dishonesty is not insurmountable. Nevertheless, it is not the principal reason for avoiding rental housing development. 

The Vermont political leadership, at the federal, state, and local levels (except for Governor Phil Scott’s administration), has made numerous announcements about how they wish to control residential rental housing in Vermont. They have made it their mission to stigmatize those who are residential rental landlords with comments such as, “they are gouging their tenants, making huge profits while providing minimum services.” 

For evidence of this, look no further than that of our continuously absent U.S. Senator. He has become bi-coastal, joining NYC’s Mayor Mamdani and the senator’s California cohorts in pushing for a revolution in the ownership of residential rental units. 

According to far-left-of-center politicians, the rental market needs rent controls, more government control over lease terms and evictions, and insistence on additional tenant services at no cost to renters. Landlords are piranhas, if not worse. In Vermont, you do not tell folks you are a landlord even if you are the most conscientious.

 The exceptions are landlords associated with nonprofit housing trusts. They can be altruistic; they are funded with federal and state grants and the costly housing tax credit schemes. By doing so, they are the major provider of rental housing today. 

All the above really does not matter anymore.  Even in the private sector, if scores of sites were shovel-ready, they would be just that, shovel-ready, with no construction tradespeople to pick up the shovels and build the project. Vermont paid little attention while its building workforce exited the state and went where the work was. It is doubtful they will be back.

The author is a U.S. Marine (retired), CPA, and columnist living in Arlington, VT.