Vermont official urges passage of small‑municipality financing tool to spur housing

Secretary Lindsey Curley of the Agency of Commerce and Community Development told the Vermont House Committee on Commerce and Economic Development on April 22 that a project‑based increment financing proposal called CHIP could help unlock housing development in small municipalities.

Curley said Vermont needs many more homes — she cited figures of 40,000 by 2030 and 80,000 by 2050 — and described CHIP as “a tool that would be incredibly helpful” to bring infrastructure investments within reach for smaller towns and encourage builders to proceed on projects that currently do not “pencil out.”

The committee pressed Curley on several recurring concerns: limited municipal administrative capacity in small towns, the risk that incentives could be used for high‑end homes or nonresidential development, and the potential effect on the Education Fund if tax increments are diverted. Committee members noted that using CHIP will still require municipal agreement and warned that some towns may not be able to administer the program without outside technical assistance.

Curley said the Vermont Economic Progress Council (VEPC) — which she described as a quasi‑independent body supported by her agency — is prepared to manage review of projects. “There are a lot of check backs in here and a lot of different eyes on this,” she said, adding that VEPC and the tax department will monitor projects and that public comment will be part of the review process.

On timing, Curley and committee members discussed the bill’s stated effective date. Curley said in a hypothetical timeline the bill could take effect July 1, 2025, and she cautioned that, even so, municipalities would typically need months for local decisions and warning special meetings; she estimated a substantial impact on the Education Fund was unlikely before 2027. Committee members asked for a mechanism to reassess the program; Curley expressed support for a look‑back and said she was comfortable with a 10‑year review period to judge whether adjustments are needed.

Committee members and Curley discussed possible guardrails, including annual reassessments of project values and a way to preserve upward changes to the portion of tax revenue that supports education. Curley said it may be possible to include a provision that ties the original taxable value to surrounding property growth, but she said she would need to consider whether such a change would have unintended consequences.

Members also raised the point that existing state programs and reforms — Curley cited the HOME Act and Act 250 changes as examples — have helped move previously stalled projects forward by reducing unpredictability and permitting hurdles. Curley recommended keeping CHIP implementation relatively simple at first, tracking outcomes, and making adjustments based on data from VEPC and the tax department.

The exchange closed with Curley offering to provide more detailed language and estimates to the committee; she said staff would circulate bill language in the coming days and that VEPC and agency staff would produce periodic information for committee review. Committee staff indicated follow‑up work to assess drafting capacity and next steps.