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Committee outlines housing incentive changes: 10-year CHIP sunset, TIF adjustments and 15% affordable set-aside for 85% increment
Summary
During the May 30 meeting, members of the House Commerce & Economic Development committee reviewed compromises on housing incentives: the CHIP program sunset was extended to 10 years, a $200 million cap was discussed, primary-housing TIF language was removed, and an 85% increment is available when projects include at least 15% affordable housing.
MONTPELIER, Vt. — Members of the Vermont House Committee on Commerce & Economic Development discussed a package of housing-incentive changes on May 30 that committee participants described as a compromise intended to preserve key House positions while accommodating Senate adjustments.
Committee members said the package returns a retention formula (described in discussion as a 60 percent component) the House had sought, and staff noted a cap of $200 million included in the draft. The committee agreed to extend the CHIP program’s sunset to 10 years, up from a 5-year period described earlier in deliberations, and to remove a previously proposed primary-housing tax-increment financing (TIF) provision.
"I think it's a good result," said a committee member during the discussion, describing efforts to hold as much of the House position as possible while collaborating with the Senate.
The committee discussed how the 85% incremental benefit could be accessed: a project must include at least a 15% affordable-housing minimum for the full 85% increment to apply to the whole project. Committee members clarified that jurisdictions with existing ordinances that set a higher affordability requirement would continue to follow those local rules.
Staff also described changes to rulemaking: rulemaking authority referenced in the draft was narrowed to guidance, pointing program administrators back to existing TIF rules and a nonexhaustive list of eligible improvements. Committee members discussed that routine improvements already covered under TIF could remain eligible when they meet the bill's stated purpose, including potential floodplain remediation or reconstruction if the municipality chooses to apply for such uses.
Moderate-income definitions and their interaction with the affordable set-asides were discussed; committee members said the draft retains a distinction for moderate-income housing and that the 85% increment is not automatic without meeting the affordable-housing minimums spelled out in the bill text.
The discussion closed with members expressing satisfaction with the collaborative process and with staff noting that further technical refinements could continue. There was no recorded formal vote on these housing provisions during the session; the committee discussed the language and next steps informally.
Key points
- CHIP sunset: Extended to 10 years (from 5 years as previously discussed). - Cap: Staff referenced a $200,000,000 cap included in the draft. - Primary-housing TIF: Language on a primary-housing TIF was removed from the draft. - 85% increment and affordable housing: To access an 85% increment for a project, the draft requires a minimum 15% of units to be affordable; local ordinances with higher requirements remain controlling. - Rulemaking: Draft narrows some rulemaking to guidance and refers administrators to existing TIF rules and a nonexhaustive list of improvements.
Next steps
Committee members indicated support for continuing to refine the draft and to coordinate with the Senate. Staff said they will continue technical rule and drafting work; no formal committee action was recorded on the housing provisions that day.
