Vermont House committee hears rural caucus amendment to housing package; straw poll is unfavorable

Representative Laura Sebelia of Windham II presented an amendment from the rural caucus to the House General & Housing Committee on May 22 that would alter the Ways and Means amendment to S127 by (1) restoring electricity infrastructure to eligible improvements, (2) lowering a minimum floor-area threshold for adaptive‑reuse projects to 51%, and (3) removing a "but for" test and a related rulemaking directive.

The amendment matters because committee members said it seeks to increase flexibility for rural communities trying to repurpose vacant buildings and to simplify eligibility rules staff and local officials find confusing. "We think the housing crisis speaks for itself. And, the but for is really challenging for Vermonters to understand," Sebelia told the committee.

Committee members spent more than an hour questioning and debating the amendment. Supporters and the amendment’s sponsor said rural towns have vacant schools and other large buildings that require flexible treatment in any floor-area calculation. Sebelia told the committee the rural caucus used a ranked process to identify its top three concerns with the earlier Ways and Means amendment and consolidated those into five instances of change across three substantive items.

Opponents raised two chief concerns. First, several members said including electricity infrastructure in the list of eligible improvements is complex because utilities are financed and regulated differently: Vermont has an investor‑owned utility, rural cooperatives, and municipal utilities, the committee heard. Committee members described a tradeoff between funding the infrastructure through tax increment financing — which shifts costs to property taxpayers via foregone tax receipts — and leaving utilities to recover costs through rates, which places costs on utility ratepayers. One representative summarized the difference: if electricity infrastructure is covered by tax increment, property taxpayers ultimately bear the cost; if it is left out, utility ratepayers or property owners near the development would carry the cost.

Second, several members said lowering the minimum floor-area threshold to 51% — the percentage of a building that must be housing to qualify — risks letting new mixed-use developments qualify the same as adaptive‑reuse projects. "Any project that’s half commercial would qualify, even if it was brand new," one member warned, urging that flexibility for reuse be handled through agency rulemaking rather than a statutory change.

Members also debated the "but for" test, which some said adds complexity and is difficult for implementers to apply on the ground; proponents of removing it argued other safeguards remain in the bill, including an overall program cap and a sunset for the chip program referenced in committee discussion.

The chair paused for a 10‑minute break and later held a nonbinding straw poll on the Sebelia amendment. The committee recorded 2 votes in favor, 8 opposed and 1 not present on the straw poll. The chair characterized the result as a committee signal, not a final determination: straw polls are advisory and do not by themselves change the bill.

Several members said they remain committed to pursuing rural housing solutions and recommended additional field visits and off‑session work to understand implementation challenges in small towns. The committee paused further action pending additional discussion and a planned procedural "drop hole" before 1:00 p.m. for members to reconsider strategy.

Next steps were not resolved on the floor: the straw poll will inform whether the Sebelia amendment remains in contention as the bill moves through committee and, potentially, to conference. No formal motion or binding vote on the amendment was taken during the hearing.