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League of Cities warns primary-residence clause in CHIP development agreements could be unenforceable for many towns
Summary
Samantha Sheehan and Josh Hanford of the Vermont League of Cities and Towns told the committee that a required 'primary residence' certification in CHIP development agreements could be practically unenforceable in many towns and urged either removing the obligation from municipal development agreements or pairing it with enforcement authority and resources.
Samantha Sheehan and Josh Hanford of the Vermont League of Cities and Towns (VLCT) told the House General & Housing Committee that the bill’s requirement that municipalities include a primary-residence certification in the housing infrastructure agreement (the development agreement) creates practical enforcement and capacity problems for many Vermont towns.
"What's in question is this tool in the CHIP program or this requirement in the CHIP program that requires a municipality to certify this in a development agreement when we have not heard how a municipality would be able to enforce this," Sheehan said. "That gives us pause."
VLCT witnesses said municipalities typically do not have existing authority or staff to monitor the ongoing occupancy status of individual units across the life of a development, and they raised multiple practical questions: who would be assessed fines or penalties; whether a town can realistically review homestead filings or rental leases over decades; and whether municipalities should be expected to police subsequent private sales and transfers.
"These are perfectly fine policy goals," Sheehan added, "but they don't belong in a municipal development agreement. They belong with a subsidy source and an organization that can monitor and enforce that."
Committee discussion explored possible remedies and enforcement pathways. Several members and witnesses noted standard development-agreement tools that can be used elsewhere: recorded covenants that "run with the land," performance assurances, and developer obligations to post security. One committee member suggested a covenant recorded on the deed as an enforceable remedy; VLCT representatives said those contractual remedies are more commonly associated with subsidy programs that include a monitoring entity, not with routine municipal development agreements in small towns.
The committee did not vote on the provision at the April 30 hearing. VLCT asked either to remove the requirement from the municipal development agreement or to pair it with clear authority and resources for enforcement; lawmakers said they will continue to draft compromise language and consider whether to require primary-residence protections at initial offering rather than for the perpetual life of a development.
"We support the intent behind this section," Josh Hanford said. "Our concern is capacity and enforceability at the municipal level."
