Champlain Housing Trust warns federal cuts could force staff reductions, slow development

Michael Monti, chief executive officer of Champlain Housing Trust, told the House Committee on General and Housing on April 9 that proposed federal funding reductions — including cuts to NeighborWorks funding and housing vouchers — could force the trust to cut staff and limit its ability to develop or support housing across Vermont.

Monti told committee members the NeighborWorks network provides roughly $1,900,000 a year that is distributed to five nonprofit organizations across the state and that those funds are used for both operating and flexible capital activities. "That capacity funds, if that was to disappear, would severely impact many of the organizations within the network," he said.

The committee chair asked Monti to explain who would be affected and how the funds are used. Monti said NeighborWorks dollars are often the flexible capital that can be "first in" to start a project or "last funds in" to close financing, and that the network uses those dollars to support development, home-buyer education, shared-equity homeownership and emergency responses such as flood recovery and COVID-era work. He said the NeighborWorks allocation to Vermont has yielded substantial leverage from other sources, citing a NeighborWorks report that $1.9 million can leverage roughly $61 million at a 32-to-1 ratio.

Monti warned that other federal programs also face uncertainty. He described concern about congressionally directed spending (sometimes called CDFI/Congressionally Directed Spending in the hearing) and said some projects in Burlington — including veteran housing — have benefited from that spending in recent years. He told the committee the 2023–24 congressionally-directed allocations that have already been committed appear to be moving forward, but said the future of such allocations is uncertain.

Monti also discussed the potential impact of cuts to rental assistance. "If major cuts continue to happen in vouchers and federal subsidies, the impacts could be pretty substantial to the residents, which will then impact the health of each of the properties," he said. He said Champlain Housing Trust manages properties where rents and subsidies together cover operating costs, and that a loss of vouchers would likely increase unpaid rent and could push some properties into financial stress.

Committee members asked whether the organization would have to reduce staffing if NeighborWorks funding and voucher support were reduced. Monti said the trust would likely need to "reduce our workforce in some way, by, a few folks," and that those reductions would probably affect resident services and development staff rather than maintenance or property managers. He said the trust has more than 1,000 households in subsidized situations across its portfolio and is watching local housing authorities for voucher impacts: "We know that [the Burlington Housing Authority] are looking to reduce over 200 vouchers…that's about 10% of the vouchers over the next year or so." (Committee members' exact names were not specified in the transcript.)

Monti argued that cutting development capacity while also reducing rental assistance would be harmful. Asked whether, if funds were limited, the trust would prioritize keeping people housed over building new units, Monti said the question is complex and the state needs both: production of housing for moderate-income and working households and support for very-low-income households reliant on vouchers. "If we don't produce that, they're not going to be able to afford any rent at all," he said of working and moderate-income households; he also warned that voucher reductions would hit seniors and disabled residents who rely on the assistance.

Monti described the role of tax credits in financing projects and said NeighborWorks funding helps projects leverage other sources such as federal Low-Income Housing Tax Credits, Vermont Housing Conservation Board funds and financing. He noted that 9% tax credits are limited, that 4% credit deals still require substantial additional funding, and that NeighborWorks funds often fill gaps in complex financing stacks.

Monti said his trip to Washington, D.C., with other network executives was "a little grim" and that NeighborWorks funding is at risk in the next federal fiscal year. "I would give it a 50-50 chance of it not being here…come next federal year starting October 1," he told the committee. He said U.S. Sen. Peter Welch has circulated a "dear colleague" letter to gather support and that the trust and other stakeholders are lobbying to preserve allocations.

The committee closed the hearing after additional questions. Monti said Champlain Housing Trust will continue to monitor developments and update the committee as federal decisions are announced.