VLCT tells committee CHIP can close a $240M municipal infrastructure gap needed for housing

Representatives of the Vermont League of Cities and Towns told the House Committee on Commerce & Economic Development on April 16 that S.127’s CHIP would create a new financing tool allowing municipalities to finance public infrastructure for housing without a direct general‑fund appropriation.

Samantha Sheehan, municipal policy and advocacy specialist at VLCT, said a VLCT survey of members found 35 municipalities already planning or designing water or sewer projects, with an average project cost of about $14 million and a median just over $10 million. Sheehan said the survey identified an approximate $240 million funding shortfall among projects that are designed or underway and that figure likely undercounts total need.

Why it matters: VLCT argued that Act 181’s connection of housing density to municipal water and sewer means capital improvements underlie the state’s ability to build housing. The witness said CHIP would allow towns to fund infrastructure tied to specific housing projects without raising current homeowners’ taxes or water rates and without a direct one‑time appropriation from the state general fund.

VLCT’s primary points: - Scale of need: VLCT’s October survey identified 35 municipal projects with an aggregate funding gap of roughly $240 million (survey covered projects already designed or underway and excluded Burlington’s large bonded projects). - CHIP design and flexibility: VLCT emphasized CHIP as “housing‑type agnostic” — usable for manufactured housing, infill, multiuse redevelopment and brownfield remediation — and said local governments and affordable‑housing developers could both benefit. - Timing and mechanics: VLCT suggested that, if enacted and implemented promptly, municipalities could begin infrastructure work as early as 2028–2029 and that the program should include technical assistance for project‑management and finance. - Public‑benefit and reporting: VLCT defended the bill’s lack of a strict inclusionary affordability mandate, arguing that adding affordability conditions could be a “deal killer” and that affordable‑housing developers already benefit from CHIP because they typically receive other subsidies and would not have to budget separately for infrastructure.

VLCT followed with an explanation of how property revaluation and grand‑list growth interact with TIF: reappraisals are revenue neutral while new development produces new taxable capacity. The witnesses argued that public investment enabling new development is one way to expand the grand list and support education and municipal revenues.

Ending: VLCT closed by urging the committee to view CHIP as a broadly available financing tool that can be paired with other funding sources to accelerate municipal infrastructure and housing construction, especially in places with identified projects and permitting in hand.