Senate committee reviews housing bill draft 3.1; pauses on rental-reporting pilot and immigration-related language

The Senate Economic Development, Housing & General Affairs Committee met to review its housing omnibus, draft request 250841 (draft 3.1), and agreed to move most sections forward while tabling or flagging several items for further testimony or amendment.

Cameron Wood, legislative tax staff, opened the committee walkthrough, saying, “So we're walking through your committee bill related to housing, but we do not have a bill number yet. You can see it's draft request 250841 draft 3.1 is what we're looking at.” He briefly summarized the document and highlighted that recent testimony and edits were incorporated and that changes were highlighted in yellow in the current draft.

The bill retains a series of programs and changes across multiple subjects: modifications to the Vermont Home Improvement Program (VHIP), statutory placement of a manufactured-home repair program, creation of a Vermont Infrastructure Sustainability Fund at the bond bank, extensions and changes to VHFA-authorized tax credits for down-payment and first-generation homebuyer programs, study language on housing for people with developmental disabilities, brownfields funding requests, accessory-dwelling-unit (ADU) property-tax exemption language, and provisions on manufactured/off-site construction.

On VHIP, Wood summarized a primary change: “the primary changes to PHIP here are, doing away with the 5 year forgivable loan. So moving forward, it would only be grants for 10 year forgivable loans.” Committee members discussed aligning some allocations with the House position (one example raised: 30% of annual VHIP allocations to a 5-year requirement, per the House). Department of Housing stakeholders noted the draft removes a previous requirement tying a 10-year forgivable loan to leasing to specified populations and instead allows rent set to fair-market rent plus utilities in calculating eligibility.

Representatives from the Department of Housing and Community Development and VHFA participated in multiple discussions. Alex (Department of Housing and Community Development) indicated acceptance of some proposed income-targeting language, saying, “I don't have a problem with that,” while emphasizing policy choices remain with legislators. Chad Simmon, speaking for the Vermont Housing Finance Agency, described the tax-credit extension: “it would extend that, tax credit that funds the down payment assistance program another 5 years.” The committee discussed program design details, including repayment terms for first-time homebuyer assistance (forgivable 0% loans repaid at sale) and the first-generation grant (a straight grant of up to $15,000).

Manufactured-housing and mobile-home repair programming was a sustained topic. The committee discussed moving the existing manufactured-home improvement-and-repair program into statute to allow ongoing base funding and to improve predictability for program staff and partners. Some members argued for leaving the program as one-time appropriations to preserve annual legislative review; others argued ongoing base funding would allow predictable staffing and planning.

The committee created (in the draft) a Vermont Infrastructure Sustainability Fund to be administered by the Vermont Bond Bank for municipal infrastructure, and discussed appropriations the governor recommended for related programs. Brownfields cleanup funding generated strong support in committee testimony; members discussed the backlog of need and landed on a working figure of $4,000,000 in additional funds for the brownfields revolving and revitalization requests to present for appropriations negotiations.

Two items prompted extended debate and were not finalized: the positive rental-payment pilot and fair-housing language tied to citizenship/immigration status. On the rental-payment pilot — a program proposing to report tenant rental payments to credit bureaus — the committee reviewed changes requested by the State Treasurer's Office. The current draft makes participation voluntary and shifts administration to a third-party contractor; it also limits reported information to positive rental-payment information at the treasurer's request. Several members and stakeholders raised concerns about the accuracy and fairness of reporting only positive payments (and whether removing negative-payment reporting could mislead third-party credit users). The committee agreed to remove the pilot from the front of the draft and treat it as a possible amendment after further testimony; several members asked that if the pilot proceeds the draft must address removal-of-participation and accurate reporting when participants stop making timely payments.

On fair housing and immigration/citizenship status, the draft adds citizenship and immigration status to protected classes in multiple public-accommodation and housing sections, but also includes an explicit carve-out stating that verification of immigration status “if required by federal law” shall not be a violation of the state anti‑discrimination provision. Banking and mortgage stakeholders warned that secondary-market purchasers of mortgage loans may require certification of legal presence, and committee counsel and members said the language posed complex federal-state interaction issues. The committee directed staff to remove references to immigration status in specific paragraphs of Section 9 and to pause further action pending additional legal analysis and testimony; members indicated they would revisit the issue with stakeholders including municipal and banking representatives and may leave decisions for the House to resolve.

Other discrete items: the manufactured-housing "by-right" section and off-site construction work (including a VHFA study and a proposed $250,000 appropriation to develop off-site construction recommendations) drew requests for more testimony from VLCT, industry, and municipal leaders. The committee agreed to hold those sections for additional input and to consider them as amendments.

What the committee directed and next steps - Staff were asked to drop updated CHIP language and reconcile other edits into a new draft for the committee’s next meeting. - The positive rental-payment pilot (Section 6) was removed from the front of the draft and will be revisited as a potential amendment after additional testimony (committee outcome: tabled). - Language referencing immigration/citizenship status will be narrowed: committee members asked staff to remove immigration status references from the particular paragraphs of Section 9 and to solicit additional testimony from mortgage, banking and municipal stakeholders before resubmission (committee outcome: amended/tabled for further review). - Committee members indicated support for adding brownfields funding and agreed (in-committee) to pursue $4,000,000 as the working figure for negotiation in the appropriations process; final appropriation decisions were left to the Appropriations Committee.

The committee will meet again after staff post a revised draft that incorporates the agreed edits and any new CHIP language. Several members requested specific outside witnesses for the rental‑reporting pilot and manufactured/off-site construction sections.

Ending The draft remains a multi-part omnibus housing bill (draft 3.1). Committee members emphasized the need for further testimony and technical fixes before formal advancement to Appropriations or the floor; no formal floor motion or committee vote on the housing bill as a whole was recorded during this session.