Senate committee reviews wide-ranging draft housing bill including VHIP changes, infrastructure fund and pilot programs

Cameron Wood, Office of Legislative Counsel, walked the Senate Economic Development, Housing & General Affairs Committee through a draft committee housing bill, describing program language changes, new statutory provisions and multiple funding requests the committee must consider before deciding what to send to the floor.

The draft combines amendments to the Vermont Rental Housing Improvement Program (VHIP), a permanent manufactured-home improvement and repair program, creation of a Vermont Bond Bank "Sustainability Fund" for water and sewer infrastructure, expansions or statutory placement of several Vermont Housing Finance Agency (VHFA) programs (including first-generation homebuyer and down payment assistance tax-credit provisions), a study committee on housing for people with developmental disabilities, a positive rental-payment reporting pilot, additions to fair-housing and public-accommodation protections, and brownfields and off-site construction provisions — together with appropriations and placeholders the committee will need to resolve.

Why it matters: Committee members said the package touches core housing production tools (grants/loans, infrastructure financing and tax credits), potential changes to eligibility and access rules for public dollars, and multiple new or expanded programs that would require separate appropriations and further administrative detail before enactment. The bill would affect landlords, tenants, municipalities and multiple state agencies if adopted.

Key Items and Details

Vermont Rental Housing Improvement Program (VHIP): The draft would amend VHIP eligibility and award structure. Under current program language discussed, an applicant could receive up to $50,000 for rehabilitation with up to an additional $20,000 for accessibility improvements; earlier language had a separate $70,000 cap for full accessibility projects. The administration proposes removing the 5-year forgivable loan option so awards would be either grants or 10-year forgivable loans. For grants, the draft would keep current lease/occupancy requirements (for example, leasing to individuals exiting homelessness or other prioritized groups). For the 10-year forgivable loan, the administration proposes dropping those occupancy requirements and instead require only that the unit be leased at a fair market rent as defined by a federal public source. Committee members described that change as "a substantial change" to how public funds are tied to tenant eligibility.

Manufactured Home Improvement and Repair Program: The draft moves an existing program from session law into permanent statute (cited draft placement at "10 BSA 700" in the walkthrough). The program authorizes awards to manufactured-home-community owners (up to $20,000) for small capital improvements, infill of vacant lots (removing abandoned homes, grading, septic improvements), and direct assistance to homeowners for habitability, accessibility, and foundation/site work when the home is a primary residence.

Infrastructure/Sustainability Fund (Vermont Bond Bank): The draft creates a sustainability fund within the Vermont Bond Bank to provide capital for extending or increasing water, sewer and other public infrastructure where lack of capacity is a barrier to housing production. The committee review described policy aims: enabling municipalities to pursue projects that unlock housing capacity, sometimes without going through other state processes. The draft sets eligibility criteria (project-readiness, direct link to housing production, municipal commitment to own/operate) and lists evaluation criteria including system expansion, project readiness, and the Vermont Community Index ranking.

VHFA tax-credit programs and first‑generation homebuyer definitions: The draft brings some VHFA programs into statute (continuing certain tax-credit authorizations and the down payment assistance program). It imports a definition of a "first-generation homebuyer" from prior session law language: an individual whose parents or legal guardians have not had residential ownership in the state during the applicant's lifetime, or who lost ownership due to foreclosure/short sale, or who has been placed in foster care. The draft includes year-one allocations (a referenced $250,000 first-year credit allocation and an aggregate cap described in the walkthrough) and extends one program through 2031 in current language.

Study Committee — Housing for Individuals with Developmental Disabilities: The bill would create a planning committee to produce an actionable state plan to develop housing for people with developmental disabilities. Membership would include legislative members, the AHS secretary, housing and developmental-disabilities representatives, advocates (e.g., Green Mountain Self Advocates) and others. The committee's charge would include producing a schedule for creation of at least 600 additional service‑supported housing units, describing support needs, anticipated funding requirements, and recommending statutory or policy changes that hinder development of housing tied to Medicaid-funded home and community‑based services. The draft schedules the report for November 2025.

Positive Rental-Payment Reporting Pilot: The draft would authorize a state-treasurer‑led pilot to report tenant rent-payment data to credit reporting agencies from 1/1/2026 through 12/31/2027. The state treasurer would enter into agreements with affordable-housing providers and may contract third parties to transmit data. The draft includes tenant consent and disclosure requirements (voluntary participation, potential termination of participation, reporting of timely/late/missed payments) and a recommended $100,000 appropriation (the treasurer's office had requested funding). The committee discussed measurable outcomes, asking for analysis of whether participant credit scores increase, and the inclusion of required financial education for participants.

Fair-housing and Public-accommodation Protections: The draft adds "citizenship and immigration status" as protected classes under Vermont's public‑accommodations and unfair-housing statutes. It also includes a carve-out clarifying that federal requirements (for example for federally funded programs that require verification of immigration status) would not themselves create a state-law violation.

Manufactured housing by-right and off-site construction: The bill contains provisions to permit manufactured or off-site constructed housing in areas where residential development is allowed (often described in draft as "by-right" manufactured housing). Committee members discussed stigma and regulatory barriers to manufactured housing, and a separate VHFA request would fund a study/program ($250,000 requested) to advance off-site construction opportunities, bulk purchasing and business planning for local manufacturers. Committee members flagged technical drafting questions (zoning term "district" vs. "zone") for the policy authors to clarify with presenters.

Brownfields and Appropriations: The draft reflects Brownfield revitalization funding and an appropriation package: the bill text discussed a $6,000,000 appropriation to a brownfield fund (with $2,000,000 to regional planning commission assessments and $4,000,000 to a revolving loan/grant fund). The bill also surfaces a set of larger appropriations embedded in the administration's housing request discussed in the walkthrough: $15,000,000 to VHFA for a middle‑income ownership program, $15,000,000 to VHFA for a rental revolving loan fund, approximately $9,100,000 to the Bond Bank for the infrastructure fund, $500,000 for homebuyer education and foreclosure‑prevention programs, and other line‑items (including the $250,000 off‑site construction study and a $100,000 pilot appropriation requested by the state treasurer). Committee staff noted that some appropriations had to be captured separately in the budget/appropriations process.

Committee concerns and next steps

Committee members repeatedly asked for clarifications from the administration on several items before acting: - How the proposed VHIP change (removing the 5‑year forgivable loan and changing tenant‑eligibility for 10‑year loans to only require fair-market rents) would operate in practice and whether it would narrow access to accessibility funding; staff said the administration maintains it would not prevent small awards for accessibility but committee members flagged the change as substantial and asked why the 5‑year option was removed. - Clarification and cost estimates from JFO (Joint Fiscal Office) on tax‑expenditure implications for continuing-care / entrance‑fee tax changes and other tax provisions in the draft. - Input from the state treasurer's office about pilot costs and the timing of the pilot report (committee staff proposed November 2028 as a report date for a two‑year pilot but will seek the treasurer's recommendation). - Technical drafting and zoning questions on the manufactured‑housing by‑right language (committee members asked whether "district" is the correct zoning term to use in statute).

Committee directions recorded in the walkthrough included requests to invite or schedule presentations from: Vermont Bond Bank staff and Michael (name in transcript), VHFA representatives (to clarify the first‑generation/homebuyer definitions and program mechanics), Ellen (to discuss manufactured‑housing by‑right language), David White and others on the "Chip"/infrastructure sequencing, the state treasurer for the rent‑reporting pilot, and representatives of brownfields and off‑site construction work.

No formal motions or votes were recorded in this walkthrough; the session was a draft-language walkthrough and list of items to pursue in subsequent hearings.

Quotes from the transcript

"So this is our committee housing bill at the moment," Cameron Wood said while introducing the draft and explaining that the document is a committee bill without a bill number.

Ending

The committee agreed to schedule additional witnesses (VHFA, Bond Bank, state treasurer, Ellen on manufactured housing and others) and to request cost estimates from JFO on selected tax provisions and pilots before voting on a draft to move to the floor. Committee staff flagged several draft placeholders and appropriations for resolution ahead of a planned vote later in the process.