Committee reviews project-based tax-increment financing plan to fund housing infrastructure

On the last day of February, the House committee on Economic Development, Housing & General Affairs heard a presentation on a draft statutory proposal to create a project-based tax-increment financing (TIF) program aimed at funding infrastructure to enable housing development in Vermont.

The proposal, presented by John Gray of the Office of Legislative Council, would let municipalities create narrowly defined “housing development sites” and enter housing infrastructure agreements with a sponsor — which may be the municipality, a developer, or an independent agency that meets state lending standards — to finance infrastructure such as water, sewer, parking, and certain remediation work. "This proposal accounts for the possibility of different kinds of sponsor beyond the municipality," Gray said, describing the approach as targeted to housing rather than broad TIF districts.

Committee members were given a one-stop draft that combines definitions, an application and VEPC review process, requirements for municipal public notice and vote, and technical tax-administration provisions. Under the draft, a municipality first would adopt a housing development plan and the municipal legislative body would create the housing development site (the parcel or parcels where housing will be built). The municipality must hold public hearings on the plan and record the site with the municipal clerk and lister. The draft sets the site’s original taxable value as of April 1 in the calendar year in which the Vermont Economic Progress Council (VEPC) approves use of tax-increment financing for the…