CORRECTION BELOW: State invests another $55 mil, new home construction slow and expensive

Regulatory, labor, materials, supply chain problems contribute to inability to meet demand

VHFA photo

by Guy Page

Editor’s Correction: the median monthly cost of a Vermont one-room apartment rental is $848, not $2500 as stated in yesterday’s edition. $2500 is the maximum monthly rent for projects covered under the new state housing initiative. Also, the Invest in Vermont program, described in yesterday’s edition as a creation of ‘recent’ legislation, was created by the 2014 Legislature.

State Treasurer Michael Pieciak announced Wednesday, September 13 his office will invest $55.5 million in state funds into in-state housing development loans. 

Pieciak and other state officials at Gov. Phil Scott’s press conference yesterday said the loan initiative is an effort to stimulate new housing growth. 

Even with this latest infusion of investment capital, new home construction faces high hurdles – notably a shortage of skilled workers. 

“What came first, the chicken or the egg?,” Scott asked rhetorically. “We need workers to build the housing, and we need housing to attract the workers.”

Apart from the well-known demographic of aging Vermonters – the average age of a Vermont homebuilder is 47, above the national average – Vermont also faces serious contractor workforce regulatory, pay, and skills development problems, a recent Vermont Business Magazine report stated. Specifically:

  • The State’s new contractor licensing law is slowing contractor involvement in the work of flood repair
  • New, young trainees aren’t yet performing at peak capacity yet still must be paid unprecedented high wages needed to draw them into the labor force. 

It’s fair to ask just how ‘affordable’ new construction will be. Home construction costs rose 34% last year, Vermont Housing Finance Agency chief Maura Collins said.

In addition to materials, labor and interest increases, Vermont home developers have been delayed by supply chain problems. An Alburgh project took longer than expected because a statutorily-required elevator just wasn’t available. Over in New Hampshire, the troubling national shortage in grid transformers delayed the opening of a housing development, Collins said. 

Sen. Kesha Ram-Hinsdale (D-Chittenden) said at the press conference she believes the summer flooding and growing housing shortage may induce the 2024 Legislature to expand the Act 250 new housing construction exemption beyond the urban core areas established this year by S100.

Details on the Pieciak Plan – The Treasurer’s office invests tax, fee and interest revenue to provide a safe, profitable return into the state’s coffers. The $55.5 million sum represents about 2.5% of total “cash on hand” in state government accounts. 

The 2014 Legislature’s Invest in Vermont program allows Pieciak’s office to invest up to 10% if cash-on-hand in Vermont projects. Thanks to increased federal and Vermont taxes and fees since the pandemic, current cash-in-hand is at an all-time high: about $2.1 billion. 

The $55.5 million will leverage $340 million in private funding and will assist construction of 1100 units. 

Some of the State’s new housing revolving loan funds, supported by transfer tax payments, have an extremely poor record of payback. How will you avoid that, Pieciak was asked. 

“Vermonters can be assured their tax dollars will be well protected,” he said. “It [the loan] needs to be paid back,” Pieciak said. “That’s our most important requirement.” The loans aren’t going to prospective homeowners, but to established builders with strong balance sheets.

Housing Commissioner departs – Scott announced that Housing Commissioner Josh Hanford will be leaving soon to join the Vermont League of Cities and Towns. Hanford hss been a strong advocate for new housing construction. 

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Categories: Housing

13 replies »

  1. You are only investing in condos/apartments. What about building ranch and cape-cod style homes that people could actually afford to buy! You are not building the right type of homes to attract families! Not everyone wants to pay HOA fees,or live in a duplex or apartment and the currently houses being built by contractors are on tiny lots and starting at 500,000. You don’t need to have everything high end in a starter home.

    • Silly….haven’t you heard? Acreage and single-family homes are both “racist”! Obama’s dream (a nightmare to the rest of America) are high-density multi-family units just like most people live in in Communist countries. The allowance of this in most VT towns is going on now to enable these types of units REGARDLESS of how your area was zoned! Bypassing Act 250 or eliminating it altogether by the VT legislature is to allow for this as well.

      Here’s your great “affordable” housing who everyone, including Republicans, has bought into.

      The FREE market controls housing values – NOT the government! Stop buying into “affordable” or “workforce” housing, folks!!! It’s the Obama regime at work & meant to house criminals & illegals next to YOU to FORCE “diversity” and will be the nail in the coffin for Vermont!!!!!!

      Of course, all this ill be exempt on Martha’s Vineyard.

  2. Remember that the high costs of construction include building permit requirements along with delays for approval. Think about the requirements for an electric car charging system that needs a 200 amp service among other requirements.

  3. Where are all the people that will live in the new housing coming from? What will they do when stimulus money runs out?

    • This housing is meant to FORCE “diversity” & force law-abiding Vermonters to live amongst drug-dealing criminals & illegal aliens! It is the “open society, no borders, no prisons” leftist lunatics who are proposing all this under the GUISE of the affably-termed “affordable” housing or the even newer “workforce” housing moniker.

      STOP falling for this ruse people — if you work & steer clear of drugs you can eventually purchase a home – STOP asking the “government” to buy you a home…that is COMMUNISM and it is a ruse!

  4. Let me fix the headline. “State steals money from citizens and gives it to their cronies under the false pretense of helping the homeless.”

  5. “New, young trainees aren’t yet performing at peak capacity yet still must be paid unprecedented high wages needed to draw them into the labor force.”
    This speaks volumes. Young people sit on the sidelines unless you pay them a high wage that they don’t have the work ethic for.
    When the average work age is 47 in Vermont, it’s concerning. I’m 55 and a mechanic. Those that we interview of youth are talented but they need their pot which is a no-no in the mechanical world.

  6. After decades of throwing good money after bad, as well as stealing a good deal of it under the table and behind taxpayer’s backs, the chickens will find no way of dancing out this economic disaster unfolding here and across the entire country. The flooding everywhere and the fires (arson in the name of climate change!) is exposing, not only the incompetence, but the stark reality that the government corporations (federal, state and local) are all bankrupt! My local municipality says we have $100 million in damages. Who is going to pay for it? Don’t be looking to the worker bees, they are all insolvent according to the real numbers. Face the music Phil and company, the chicken dancing is coming to an abupt end. We all know it so stop lying and deceiving. Get prepared for the implosion while the bureaucrats run around like the chickens they are with their heads cut off.


    You have been duped! Yep, again! Your pleas for “affordable” housing or “workforce” housing are nothing more than getting you to have bought into Obama/Biden’s forced diversity plan that paves the way for building HIGH-DENSITY low-income housing for ex-cons & illegal immigrants & homeless to live in your rural & suburban neighborhoods on YOUR tax dollar!

    And the VT legislature is on board 110%!

  8. housing for Vermont men and women and children. NOT FOR EVERY ONE IN THE WORLD…VT TAXPAYERS CAN NOT AFFORD THAT even though they would like to build a home for every person IN THE WORLD !

  9. There is a 2-3 week wait for modular and manufactured homes, they have them on the lot for immediate sale.

    The affordable housing scam in Vermont is the biggest con ever, way bigger than EB5. They will never allow modest homes to be built, because they are making too much money keeping people trapped in government funded rental housing.

    They are making a ton of money off keeping people poor.

    • The people assist in making themselves poor.

      Dealing drugs, abusing drugs, run-ins with the law & becoming a felon, having children out of wedlock with fathers running off, dropping out of school, never advancing one’s education & never attending trade school, using the welfare system as your means to live, etc. ALL make you poor & keep you poor.

      The free market controls home values, not the government. And the biggest scam in Vermont is the “affordable housing” bunco. It is used & abused in every. single. state.

      It’s simply more Communism.

      Get a job, kiddies – there are PLENTY for those who want them.

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