The House General and Finance Committee voted to approve draft 4.1 of S.127, the committee’s housing bill vehicle, on May 2 after extended discussion of affordability definitions, tax-increment financing retention and changes that some members said alter landlord-tenant law.

Committee Chair (name not provided) moved the bill onto the floor after a roll-call vote approving draft 4.1. Legislative staff and members debated multiple technical and policy provisions in the 80-page draft before the motion passed.

The vote followed a line-by-line staff presentation of the draft. Cameron Wood, Office of Legislative Council, walked members through the text and identified changes from earlier drafts. "We are talking about S.127, our housing bill through the senate, which we are using as our vehicle," Wood said as the committee began review.

Why it matters: S.127 bundles statutory definitions, program criteria and funding rules that would guide a state housing infrastructure program and related tax-increment financing. The bill’s definitions and thresholds determine which developments qualify for larger shares of education property tax increment and what projects may be considered "low or moderate income" for program eligibility and retention calculations.

Key provisions and staff clarifications

- Definitions: The draft sets income thresholds tied to HUD area median income (AMI). As presented by legislative staff, the bill defines "household of low income" at 80% AMI and "moderate income" up to 120% AMI, each "as defined by HUD," and includes a definition tying affordability limits to 30% of gross annual income.

- Affordability floor: The bill defines a "lower moderate income housing development" as one in which at least 20% of the units are low- or moderate-income housing units, subject to covenants preserving affordability until housing infrastructure indebtedness is retired.

- Allocation of tax-increment (education property tax increment): The draft allows retention of up to 70% of the education property tax increment for a housing infrastructure project that does not meet the bill’s low-or-moderate affordability criterion, for up to 20 years. If the project does satisfy the low-or-moderate-income definition (the 20% unit threshold), staff explained the retention rate in the draft rises to 80%.

- Housing share and project intensity: The text was changed to require that at least 70% of the gross floor area of a projected housing development be dedicated to housing (up from 60% in an earlier draft).

- Location criteria and Act 250 interaction: The draft adds a third prong to the location criterion allowing projects in areas designated as Tier 2 (per the statute referenced in the bill) with permanent zoning and subdivision bylaws to qualify if the infrastructure funded by the housing project would make the site eligible for Tier 1. Staff repeatedly flagged that the board reviewing applications (referred to in the transcript as "Pepsi") makes determinations about location eligibility; the bill text includes a provision requiring that the Housing and Community Infrastructure Program Board determine whether a projected housing development will "meaningfully address the purposes" in the cited subchapter.

- Effective dates and other provisions: The draft contains numerous effective-date provisions; staff highlighted one standalone provision (now labeled section 26 in the draft) with an effective date of 01/01/2028. The draft also includes provisions on smoke and carbon-monoxide alarms and a VHFA off-site construction report that staff moved through in the review.

Debate and concerns expressed

- Landlord-tenant law: Committee member Jeff said he could not support the bill in its current form because it includes what he characterized as "a significant change to landlord-tenant law" that the committee had intended to address separately next year. "I'm slightly disappointed ... I can't vote for it because of that," Jeff said during final discussion.

- Implementation discretion and inter-board conflict: Members questioned how the board’s determinations about location and tier eligibility would interact with municipal land-use reviews and Act 250 decisions. One member asked what happens if the board determines a project would be "tier 1" because the infrastructure will make the area eligible but a municipal land-use board later disagrees; staff and other members acknowledged that differing decisions by separate bodies could occur and noted the issue could be addressed in future drafts.

- Broader planning coordination: Member Elizabeth (first name only in the record) said she would vote for the bill but warned that the package lacks coordination with other statewide plans, citing concerns about school consolidation and broader planning trade-offs. "I will vote in favor of this because I know we need more housing, but I see a lot of plans or a lot of problems taking a step back," Elizabeth said.

Vote and next steps

The committee voted to approve draft 4.1 of S.127 and sent the bill out of committee. During roll call several representatives recorded "yes" votes; Representative Parsons recorded a "no." Representative Peroz recorded "yes" and said she would explain her vote to colleagues. After the vote staff said the Office of Legislative Council would post the clean copy and the committee reporter would take the bill to the floor; staff indicated the bill was expected to appear on the floor Tuesday and be immediately referred to Ways and Means.

Attribution of quotes and sources

- Cameron Wood, Office of Legislative Council (legislative staff), presented the draft and the page-by-page changes.
- Ellen (legislative staff), presented the tax-increment and location criteria sections and walked the committee through AMI and retention provisions.
- Jeff (committee member) voiced opposition and said he would not vote for the draft as written because of the landlord-tenant changes.
- Elizabeth (member) said she would vote for the bill but warned of coordination problems with education planning.

Ending

The committee approved draft 4.1 of S.127 and directed staff to post the clean bill text and follow the usual process for floor referral and Ways and Means assignment. Members asking for further refinement identified landlord-tenant changes and the interaction between the housing program’s location decisions and municipal or Act 250 reviews as areas for follow-up.