House Commerce Committee advances amendment to S.127 to reshape housing infrastructure TIFs

Montpelier ' The Vermont House Committee on Commerce and Economic Development reviewed and moved forward with an amendment to S.127 on May 21, 2025, that replaces existing tax-increment financing (TIF) provisions for the state's housing infrastructure program (CHIP) and sets new application, oversight and prioritization rules.

The amendment replaces sections of S.127 that established CHIP's original structure, removes a separately constituted CHIP board, sets a $40 million aggregate lifetime cap on CHIP allocations with a possible one-time or annual increase mechanism, and directs the state agency that will administer applications to adopt rules prioritizing projects based on vacancy or dilapidation, regional equity, verifiable housing shortages and labor sheds.

The proposal's sponsor and legislative counsel described the amendment as a targeted revision to sections 25 through 27 of S.127, not a complete overhaul. "The purpose of the program is to encourage the development of new primary residences for households of low and moderate income," Senior Counsel John Ray said during the committee hearing. He told the committee that the amendment updates language to refer to "mixed-income" developments (noting in the discussion that the household incomes are not themselves mixed) and preserves flexibility for covenants that…