Vermont housing bill boosts $4M for housing improvement and accessory dwelling unit programs

Vermont's Senate Appropriations Committee has taken significant steps to address the state's housing crisis during a meeting on March 21, 2025. The committee approved a housing bill that allocates $4 million to the Vermont Housing Improvement Program (VHIP) and introduces new incentives for creating accessory dwelling units (ADUs). This funding aims to revitalize vacant and non-compliant buildings, making them suitable for habitation and increasing the overall housing supply.

The bill emphasizes investing in proven programs rather than launching new initiatives. It includes a $2 million investment in downtown economic development, reinforcing the connection between housing and economic growth. The VHIP will provide $50,000 grants to property owners for bringing vacant buildings up to code, while also encouraging homeowners to create ADUs, which can be additional living spaces within existing properties.

A notable feature of the bill is a three-year pilot program that offers tax incentives for homeowners who construct ADUs. This initiative freezes the assessed value of the property before the ADU is added, providing a temporary tax break to encourage development. The committee highlighted the importance of ensuring that these units are not used as short-term rentals, thereby maintaining their availability for long-term housing solutions.

The discussions also underscored the critical need for affordable housing options, particularly for mobile home communities, which often serve as the most accessible homeownership choice for many Vermonters. The committee aims to ensure that these communities receive necessary support and improvements, recognizing their role in the broader housing landscape.

As Vermont continues to grapple with rising rent prices and homelessness, the committee's actions reflect a commitment to expanding housing availability and affordability. The approved measures are expected to have a tangible impact on the state's housing crisis, providing immediate relief and fostering long-term solutions for residents in need.