Vermont must invest to end our housing crisis
by Rep. Mike Rice (D, Bennington-Rutland)
During the two years I’ve served in the legislature, Vermont’s housing crisis has been constantly top of mind. I’ve heard heart-wrenching stories of Vermonters with disabilities facing homelessness, seen tears in the eyes of constituents on the brink of losing their long-term rental home and unsure of where they would find a new place, and learned time and time again about the teachers, nurses, childcare workers, and others who wanted to move to my community to accept a job, but didn’t, because they couldn’t find a home.
The legislature has worked to address the crisis. We have invested what funds we could, much of them one-time pandemic-era federal funds intended to keep people housed during the emergency, but also to build more housing, to help bring rentals up to code, and to enable homeowners to build ADUs. We’ve also addressed the regulatory barriers to housing, including through the HOME Act of 2023 and H. 687, the major Act 250 modernization bill that recently passed the House.
But the pandemic-era federal funds have ended, and while regulatory modernization is necessary, it alone won’t fix this crisis. If we intend to ensure that the communities we love remain – that is, that they remain places where a socioeconomically diverse array of neighbors can live, work, and raise their families – we need to commit to making the investments that can truly end this housing crisis. That is why I support the creation of two new revenue streams that would be used to fund a comprehensive, ten-year plan to do so.
The first is an update to the transfer tax, which is a one-time tax paid by the buyer in a real estate transaction. Currently, that tax is levied at 0.5% of the purchase price, up to $100,000, and 1.25% beyond $100,000. Under the House proposal, it would shift to 0.5% on the first $200,000, 1.25% on the price between $200,000-$750,000, and 3.65% above $750,000.
This would result in a decrease in the transfer tax for homes costing less than $750,000, a direct reduction in cost for the vast majority of Vermonters purchasing a home. Further, the increased tax on sales over $750,000 is marginal, meaning the higher rate is charged only on the amount of the sale price over that threshold, with the cost up to that threshold taxed at the lower rates. If implemented, this change would bring in about $17.5 million in additional revenue annually on the sales of properties that cost over $750,000, while reducing taxes for homebuyers seeking houses priced under $750,000.
The second new revenue stream under consideration comes from the creation of a new tax bracket for households with annual incomes over $500,000. Currently, every household with an income over $229,550 is taxed at the same rate, whether it’s a household with two earners each earning $115,000/year, or it’s a household with an annual income of $1,000,000 or more. This proposal would address that lack of progressivity at the top of our income tax brackets.
This tax would also be marginal, meaning annual income up to $500,000 would still be taxed at the existing rate (8.25%), with only portions of income above the new threshold being taxed at the new rate (11.25%). In other words, if a family earns $510,000, the first $500,000 would still be taxed at 8.25%, and just $10,000 would be taxed at 11.25%. This change would raise $75 million annually for housing, beginning in fiscal year 2026.
In Vermont, middle-income earners actually pay a higher portion of their income in total taxes than higher-income earners. Our system does a good job of ensuring that the lowest-income Vermonters don’t pay more than they can afford. But it doesn’t do a good job of ensuring that
same progressivity from the middle class up. For instance, a family earning $140,000 per year pays a higher share of their household income in taxes than a family earning $1,000,000 per year. This exacerbates the challenges faced by Vermont’s middle class.
I don’t consider these two tax changes on their own, and I don’t take them lightly. I consider them in the context of Vermont’s housing crisis, and in response to the Governor’s recommended budget for the next fiscal year, which proposes a nearly 90% cut to housing investments. That’s unacceptable. Instead of cutting all meaningful investments in ending the housing crisis, the additional revenue from these two tax updates would fund a comprehensive plan to end Vermont’s housing crisis, designed by the statewide experts working to do so everyday.
Any tax proposal must come with deep consideration of the impact it will have on all Vermonters, and how it fits in with our broader need for public investment to build stronger communities. As we continue to confront the housing crisis, these changes can help ensure we build a Vermont where everyone can afford to live and thrive. Our communities are depending on it.
Rep. Mike Rice (D) represents the Bennington-Rutland district (Danby, Dorset, Landgrove, Mount Tabor, and Peru) in the Vermont House. He serves on the Committee on Agriculture, Food Resiliency, and Forestry.
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It is becoming increasingly clear that the vast number of new homes will be to accommodate all the non-working freeloaders in the state.
Remember that welfare is calculated by ” per head per household” so we are incentivizing people with no parenting skills to have as many kids as possible. Now we are starting to see what a failure no-strings attached welfare is
You hit the nail on the head: NO-STRINGS-ATTACHED.
“It is becoming increasingly clear that the vast number of new homes will be to accommodate all the non-working freeloaders in the state.” The cost of the average house in Chittenden County is now over $500,000.
” so we are incentivizing people with no parenting skills to have as many kids as possible.”
So why isn’t the population exploding with all these incentives to have children? Literally nothing that you said is true.
Chris Whoever-you-are: While Vermont’s school population has declined more than 12% since 2010, the percentage of students eligible for free or reduced lunch, based on household income, has increased from 23% to over 34% (a 67% increase) in the same time period. Now what is it again that you say isn’t true?
As a conservative, I have to admit the writer makes some good arguments.
Re: “I consider them in the context of Vermont’s housing crisis, and in response to the Governor’s recommended budget for the next fiscal year, which proposes a nearly 90% cut to housing investments.”
Sorry, Mr. Rice. I don’t believe you. Nor do I believe Mr. Cina or Rep. Mihaly. We’ve been investing millions on the housing issue and still it persists. It seems that the only people who really benefit are the employees and executives in the Home Ownership Centers like the Champlain Housing Trust. It has $41 million in annual revenue. Its key employees earn six-figure salaries, plus benefits, and it pays a total of $7.3 Million in other annual employee wages and benefits, or 35% of its annual revenue. And you guys are going to funnel even more money into it.
Your proposals are ludicrous. And, like Mr. Mihaly before you, I predict we’ll not hear another word of discussion beyond this continued stream of perfunctory press releases.
If you really want to convince Vermonters to go along with your proposals, try answering the questions I recently put forth to Mr. Mihaly. Explain specifically to what extent this increased funding will solve Vermont’s housing problem – and when. After all, if you take just the Champlain Housing Trust’s annual revenue and divide it by $400 per square ft. (a reasonable cost of new construction), you could build more than 60 two-bedroom, 1500 square foot apartments from scratch every year. That’s the annual revenue from just one of the five Vermont Home ownership centers.
And explain what is meant by a ‘permanently affordable’ apartment. Where is there anything that’s ‘permanently affordable’?
Why not support legislation lowering taxes and incentivizing the independent businesses in Vermont that can hire and pay people to be self-sufficient and pay for their own housing? Do you not understand that the more you subsidize so-called ‘permanently affordable’ housing, the less affordable it becomes – because landlords and builders increase what they charge in direct proportion to the subsidies you provide. It’s the proverbial dog chasing its tail. ‘Permanently affordable’ is an oxymoron. A fool’s errand.
There are many things you can do to be more efficient rather than throwing money at a problem. But you and your colleagues simply persist at putting forth a deluge of perfunctory nonsensical press releases – because you have a super-majority, and you can do whatever you please.
VDC readers – understand this: Messrs. Rice, Cina, and Mihaly are the enablers of wealthy government employees and NGO executives pulling in six-figure salaries. Their livelihoods are inextricably dependent on being able to confiscate our property to fund their folly. Efficiency and success are antithetical to their existence. After all, if they were ever successful in their management of the dystopia they’ve created, they know they’d have to go out and earn an honest living, like those of us from whom they’re robbing.
“When government– in pursuit of good intentions tries to rearrange the economy, legislate morality, or help special interests, the costs come in inefficiency, lack of motivation, and loss of freedom.” – Milton Friedman.
Re: “In Vermont, middle-income earners actually pay a higher portion of their income in total taxes than higher-income earners.”
Well, duh. This is an example of legislative sophistry. With the increased tax credits in 2019, many middle-income earners don’t pay tax.
But how about when an earner, paid $60K per year, pays 20% (or $12K) of his or her income in taxes. And the earner paid $200K per year, pays 18% (or $36K per year) of his or her income in taxes. And the earner paid $500K per year, pays 15% (or $75K per year) of his or her income in taxes. Yes, the portion of income decreases. But the net increase in tax revenue from the higher income earner is significant.
Three points to consider.
First, raising the rates on high income earners will simply drive them to NH or other low tax States. This is a fact. And it’s happening right now. So instead of receiving $36K in tax revenue from a $200K earner, Vermont receives nothing.
Second, why does anyone expect the government to more efficiently spend this wealth than the very people who earn it? How’s that working these days? Consider this truism from my hero, Milton Friedman.
“The key insight of Adam Smith’s Wealth of Nations is misleadingly simple: if an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.”
And third, if the consensus of opinion is that the wealthy can’t be trusted to do the right thing, that they will cut off their collective noses to spite their own faces and ruin the economy, just what do you think those very same people are doing when they hide behind the unaccountable veil of government? At least when the wealthy invest their own money, they tend to spend it carefully, as opposed to bribing a select portion of taxpayers with the money they’ve confiscated from others.
“Half the harm that is done in this world is due to people who want to feel important. They don’t mean to do harm; but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves.” T.S. Eliot
H. Jay, This is brilliant stuff. Your short bit on the CHT is spot on, along with everything else.
Oh, H. Jay Eschelman, how COULD you be so callous?! Think of those tears of the disabled Vermonters on the verge of being unhoused!
I’m sure the good citizens of Dorset will be more than happy to have new multi-unit housing built on the town green, which currently serves no purpose whatsoever, other than to have 70% of rainfall become runoff due to all that grass thatch. Environmentally sustainable multi-unit apartment buildings, homes for all those educators, nurses, and formerly unhoused, can tie in with existing utility infrastructure, and all just a 9-iron form the Dorset Field Club, where the newcomers can recreate during the summer months: A win-win-win no-brainer, O Ye of Little Faith!
Just ask the good citizens of Putney how excited THEY are to have new multi-unit housing being built over the former community garden!
NIMBYs aside, Tyler, my point is that if we are truly concerned about the homeless and low income among us, the last thing we should be doing to mitigate the circumstance is what our self-righteous legislators and political appointees are doing as they struggle to think well of themselves – all the while feathering their own nests with six figure salaries.
And motive is a legitimate consideration. What I can’t figure out is whether or not these people are doing this because they’re being told to do so (Milgram Experiment), or they are simply ignorant and careless, or they are actually lawless. I’m beginning to suspect the latter. Their livelihoods are dependent on their ability to confiscate our property, and they will continue to do so until they are stopped.
In the final analysis, whatever their motive, how much more evidence do reasonable people need to see that the longer these officials manage our affairs, the worse the problems they are trying to solve become? From homelessness, to income, to education, to healthcare, to the taxes they levy to support their charade – their policies are, by virtually every measure, failing miserably.
Postscript:
Re: “What I can’t figure out is whether or not these people are doing this because they’re being told to do so (Milgram Experiment), or they are simply ignorant and careless, or they are actually lawless. I’m beginning to suspect the latter.”
The proof is in the pudding. Try as we do to engage these officials in debate, they refuse the invitation. Their ‘political transparency’ is yet another oxymoron.
All your points are well made and well taken, Jay. I was just throwing in the Nimby as a cherry on top, and piggy-backing on your fine commentary as a sign of appreciation and respect.
The one aspect where we might differ, to split hairs, is whether these grifters seek to think well of themselves. I think they don’t even try; the cognitive dissonance is a bridge too far.
rep. rice apparently wants us to pretend along with him.
First, Legislative diktat has fueled the housing problem in Vermont for decades.
Act 250 at it’s initial passage had promise, but legislative tinkering has morphed it into way more than the anti-development law it started out as. Compliance with the myriad of regulation, permitting and fees has added a hefty chunk of cash to the cost of all housing, from a single family home to a mobile home park owned and managed by a NGO non-profit- and business development, be it a ice cream stand or manufacturing facility. 2020’s GWSA has already started to increase housing costs- and the real effects have yet to be felt by homebuyers and renters.
Second, one of the effects of the SARS-CoV-2 scare of 2020 was inflated home prices as pressure came from out of state buyers, inflating the sales price by 30-50% in less than a year. Prices have not gone down since 2020, putting many formerly 3-400K homes into the 600+ range. It won’t be long before that 750K and above 3.65% hits the middle class home. Assuming the legislature doesn’t meddle yet again- because the additional tax fails to bring in enough revenue- and lower the 3.75% threshold…
Third, increasing Vermont’s top income tax rate to 11.75%- to kick in at 500K is truly disingenuous, a deception that only “millionaires” will pay that rate. Not true. Many middle class folk will pay up- because their incomes temporarily increase, due to land or other asset sales- (sometimes farmers have to sell land to pay taxes, in a circular firing squad, I suppose). So it won’t be the evil high earners alone, continuing to do the heavy lifting….and certainly not the evil high earners leaving Vermont for lower taxed states. Yes, that’s been happening for years- even though the official state propaganda says not. That 11.75% top rate will be lowered down very quickly, as the marxist demand “to pay your fair share” increases.
rep. rice was trotted out by legislative leadership to put the spin on this years’ batch of marxist diktats- hoping to get you to pretend along with him. Don’t be drawn into the rhetoric.
rice, by his own words is a NY raised fighter-“mike will fight for, and work to codify, racial equity, environmental justice, gender equity, reproductive freedom, and LGBTQIA+ rights. He’ll work to root out injustice everywhere. We should also better implement practices of restorative justice, and when we must turn to the carceral system, it is our obligation to make sure that system is meeting the values we hold dear. Finally, Vermont must address environmental and climate justice, and the reality of the disproportionate burdens of pollution and negative health outcomes carried by under-resourced and marginalized communities throughout our communities, the state, and the country.”
I suppose he came here from there, because he didn’t like it there. Now he wants to make here like there.
Next week, someone different will be front and center to explain why an unrealized assets tax is “fair” and required to subsidize housing- or education- or whatever the hot-button cause may be. The Vermont legislature going far back to sessions during the malaise era of madeline kunin have obfuscated their intentions and intended direction for Vermont as dictated by their donor/NGO masters.
“Racial equity”, “gender equity”, “LGBTQIA+ rights”…goodness this guy is the full leftist menu.
more goat herder housing coming to st. albans city vermont/// they wish to thank all you tax payers that be on the hook to pay back all those bonds/// got to wonder who might be buying all these bonds and are they state and federal tax exempt//// inquiring minds would like to know//// ops, i almost forgot/// your tax money will help pay for the building and future rent///
If you dont like socialism, then stop asking the government to control building costs or subsidize housing. The two are synonymous and you’re buying into their game. Just. Stop.
Housing prices are based upon supply and demand.
Only in a free market system. Vermont’s onerous regulations add cost to all housing.
Well in a well-greased government operation, the more people you hire, the more successful the program. They’ll need more positions to get through the permitting process they put in place themselves.
They just don’t want homes for regular people, ruffles their sensibilities.
The housing issue wont be solved by more spending and taxes! It can be partially solved by removing the insane amount of regulation and costs associated with building! Removing laws doesn’t cost money. Let the free market fix the rest via supply and demand. Very simple.
Stop trying to drive your tax and spend agendas through a simple economic 101 issue.
We don’t need you to spend our money to build our homes. We only need you to get out the frn’ way and let us do it.
How did we rebuild vermont after Irene, we declared no permits necessary, to do the fix and every vermonter with a backhoe fixed our entire state within 2 years. We’d still be asking for permits otherwise.
Just say every town has to build $250k homes 24 of them next year or get a tax bill for $2,000,000. No permits needed, just get it done….
You know what….it would get done in a heart beat. Well done and Vermont would be the better for it.
Instead they want to build rental properties at $500/ft so we can over pay for that, overpay for the leases and give their best friends a tax break, while Vermonters
will own nothing and be happy, little slaves to the united nations. May God have mercy on your soul….
I predict that representative rice’s housing plan will help the homeless in Vermont the same way Act 46 lowered education property taxes and improved outcomes for students.
You are absolutely correct, Stu. In simple terms, these plans being hatched are of the type that embody this idiom, and it works this way every time, because in this case we have people from everywhere in the world here. “We build it, and more will come or be sent”.
You can’t see the end of the line of Democrats thinking that their answer to everything is “fleece the rich”. They make their idea sound like its just a little nick, and the rich won’t notice, conveniently overlooking that the hundred dips in front of them and the hundred clowns behind them have the EXACT SAME PITCH. Democrats can’t stop spending. But they can suck your corpse dry. Say it with me, because we all know the words: THE LEFT RUINS EVERYTHING.
So funny! Back only about 12 or so years ago, the buzz was that VT’s younger generations were exiting the state in droves & that the state was failing due to this declining population & the end was near…
Now, over the past few years, we suddenly have a “housing crisis” with droves not being able to locate any structures to dwell within & homelessness a pending danger for nearly all!. The end is near…..Again.
Vermonters: You are being PLAYED by your leftist government. There are plenty of homes for sale here at the same rate as there are homes for sale there! (Wherever there might in within the USA). What IS difficult now is Bidenomics – where mortgage interest rates are 8% compared to Trump’s 2.5%!!!!!!!
WARNING: Stop the Communist Push to have government control your food supply, your health care, and your housing market!!!!! Resist this NONSENSE!!!!!
Want a house? Try Realtor.com. Voila!!!!!!!!!!!
Indeed.
https://www.realtor.com/realestateandhomes-search/Vermont?cid=sem_149490225_674908966_1230354532441861_:G:s&s_kwcid=AL!15120!3!!e!!s!!vt%20real%20estate&&msclkid=154e9ddf2d89103ba6a4fbce606acbc4&gclsrc=ds
A fine is a tax for doing wrong.
A tax is a fine for doing well.
Vermont has been unaffordable for some time now. Respectfully, you guys haven’t tried to find a rental otherwise you’d be singing a different tune. Try and find an affordable home it’s not easy….Vermont doesn’t make things easy for the common man to get ahead.
Younger are still exiting the state, believe me, it’s the migration that’s making things more difficult, rich liberals and people who are on the system….interesting match up. They are bringing their big city mentality, solutions….which lead to the same problems from whence they came.
Which is why little Vermont towns are having big city issues. Why we have crime, killings, beatings and rampant drug dealing across our state, it’s all there in plain sight for all to see.
Vermont “affordable housing” is the biggest scam in the state, way bigger than EB5….I’d say bigger than our education scam.
One of the major causes of lack of affordable housing is the permitting process in this state. As someone who deals with this everyday the rules and the way they are administrated are a huge reason in the cost delays. I have spoken with my representative Caleb Elder and he dismisses this because they don’t have any control over the state agencies. I reminded him of the power of the purse but they continue to put there head in the sand and want to throw money at the problem. The biggest problem of housing is the state and until they figure this out nothing is going to be accomplished.
if the population in vermont is not increasing, it is because as the old people die off they are replaced with new comers to fill the goat herder housing/// always follow the money trail/// what group of people are buying the bonds and living off this system///
ops i almost forgot/// in vermont you could have a shadow banking system laundering dirty money in the cayman islands buying up these bonds/// our secretary of state and auditor should be well aware of this////
Homes are expensive EVERYWHERE. Trying to make a case that home prices should remain static or be approximately the same as they were a decade or two ago are ridiculous. The Real Estate market has historically increased everywhere. NOT just in Vermont.
Prices that you see correspond similarly to prices throughout N.H., R.I., & Maine. Prices are astronomically higher in parts of the Northwest, Long Island & Westchester County NY, and in parts of NJ. Waterfront is a premium EVERYWHERE, etc.
Vermont is not an island unto itself. It’s the 21st century and low & behold we are witnessing 21st century market values. There is nothing remarkable about this nor is it unique to VT.
Try a look-see on Realtor.com & search lots of COMPARABLE areas in lots of states.
Life. Welcome.
Cease asking for hand-outs – or if you want them, stop at least complaining about Communism or socialism.
BTW, also respectfully – these market values include rentals.
Cost of a typical L.I., NY one bedroom/one bath apartment in a decent area on LI? $3500 per month or more.
stop covering up for the federal reserve and their interest rates policy/// this has caused a massive house value bubble with their zero interest rate policy
,along with higher automobile costs///
According to election records, Rep. Mike Rice raised $19K for his seat, frequently from out-of-state donors. ActBlue shows a rousing endorsement from the alphabet acronym party. Fun fact: Did anyone know that Act 76, the 2023 childcare bill and the organization known as Let’s Grow Kids, is directly linked to a coordinated pac, Vote Child Care fund donating to the Dem/Progs? $125 million of taxpayer money utilized for political purposes and oodles of corporate (NGOs and non-profiteers) kicking into the kitty?
Is the picture getting any clearer? They ramrod legislation through to funnel the money to subordiante political action committees. A well organized, well-funded, installed grifter extravaganza to push their agenda and we get to pay for it? Is it no wonder where all the money is going? Audit every single piece of garbage legislation pushed through over the last decade. I bet the sponsors and non-profits all got paid, appointed, and elected with misappropriated taxpayer money. Vermont is a cesspool of corruption and a grifter’s paradise.
Vermont has always been known as a cheap place for special interests to buy legislation (or legislators), either more directly through lobbying or by this style of indirect, phony advocacy. The demo-prog legislators do the bidding of the free babysitting and free housing advocates like the Public Assets Institute and the Vote Child Care fund. The lobbying organizations then put it in their promotional material that “your contribution went to strengthen Vermont’s ……. laws, see how effective we are at righting the wrongs of capitalism and colonialism?” And then their donors send them more money. It’s a vicious cycle. The way to end it is to stop voting for these jackass legislators and stop donating money to these groups that hate decent, productive, responsible people and use us as pawns for their globalist aspirations.
this would be called a shadow banking operation laundering money/// public private partnerships/// now, you must find out if this is a covert operation and how many shell companies are used in this operation/// you must study how money is laundered/// in vermont, this is a massive thief of private property///
When someone from the government proposes “investing”, hang on to your wallet with both hands. If this democrat wants to do something about the number of unhoused Americans, he needs to appeal to the President who has allowed by his executive actions almost 10 million new, unhoused people to swarm into our country.
How come no one mentioned BlackRock, a WEF/United States government conglomerate that is on track to own over half of all US housing?
Good point. I guess because Vermonters are too busy chronically complaining that housing prices are higher now than they were five, ten and 20 years ago to understand that that same phenomenon happens EVERYWHERE & always has.
That is why a home purchase has, throughout time, been considered an “investment”.
Got History?