DHCD outlines expansion of VHIP, scattered‑site repairs and manufactured‑home grants

Alex Farrell, commissioner of the Department of Housing and Community Development, told the House Human Services committee on Oct. 12 that the department has repositioned to add more direct unit production, rapid rehousing tools and targeted repairs for vulnerable homeowners.

Farrell said the department still manages the Vermont Community Development Program and federal Community Development Block Grants (CDBG), but those allocations (about $6–7 million annually) remain far smaller than what the state and housing partners have spent on production since 2021. "Don't feel like you need to look at all of those attachments, please," Farrell said, offering the committee written materials as reference.

Why it matters: Vermont's rental vacancy rate has fallen below commonly accepted healthy levels and homelessness rose sharply during that period, Farrell said. The department has used pandemic and recovery dollars to expand programs that quickly convert existing, underused housing into places to rehouse people and to shore up owner‑occupied units at risk of loss.

Most of Farrell's remarks focused on VHIP, a rapid response program that the department has funded with a mix of federal relief, ARPA dollars and, most recently, one‑time state funding. Farrell said VHIP crossed the 1,000‑unit threshold and remains cost‑effective for local placement: "We're gonna get either 5 or 10 years of of this covenant on this property where you need to meet these requirements, and then it's yours to rent however and to whomever you would like," he said, describing the typical short covenant tied to VHIP grants. He said the average public investment under VHIP has been about $39,000 per unit and that the department is proposing base funding and two staff positions to make VHIP a permanent program.

Farrell described multiple complementary approaches the department now runs alongside traditional funding sources: a scattered‑site revolving loan approach (a CDBG set‑aside) that provides low‑cost home repairs to keep low‑income owners sheltered; a Manufactured Home Improvement and Repair (MURR) program that issues grants to homeowners and capital upgrades to parks (roads, conduits, water and wastewater); and a "Homes for All" initiative to encourage small (1–4 unit) infill development and accessory dwelling units by small‑scale developers.

He said VHIP has worked especially well where many underused structures exist (he cited Rutland County and St. Johnsbury as examples), and that some municipalities have layered local grants with VHIP to extend impact (St. Johnsbury uses a registry fee to support complementary small grants). Farrell also noted the department will administer a large share of federal disaster relief tied to recent floods — roughly $68 million — and that the department will coordinate those funds with other units of government.

On program durability and oversight, Farrell said DHCD is instituting annual recertification for VHIP placements to track turnover and owner behavior as five‑year covenants begin to expire. He said waivers to the requirement that VHIP placements rehouse people exiting homelessness have been rare and are scrutinized; most approved waivers involve geographic pairing challenges and are evaluated with the coordinated entry organization. "We are very... not lenient at all. We do not want to issue a waiver," Farrell said.

Committee members asked about trade‑offs between quick, lower‑cost VHIP placements and longer‑term permanently affordable projects funded through VHCB or VHFA. Farrell acknowledged both have roles: VHIP is nimble and geographically broad but typically yields shorter‑term affordability; larger projects have perpetual affordability but long lead times. He also said the department is tracking uptake of the five‑year grant versus 10‑year forgivable options and will follow up with homeownership centers for more detailed outcome data.

The commissioner discussed land‑use reforms that have supported faster project approvals, citing the HOME Act and a subsequent package (Act 181) that included provisions to ease conversions and shelter siting and referenced the state's tiered jurisdiction framework in Act 250 implementation. He framed that work as removing regulatory hurdles and appeal risk that have delayed projects.

Farrell closed by noting DHCD's small staff capacity in the housing division (three permanent employees, with a governor proposal to double that number) and said the department's role is often to coordinate across agencies and local partners rather than to provide the largest dollar investments.

Looking ahead, Farrell said the department will continue to expand VHIP if base funding is approved, monitor outcomes as covenants expire, and pursue partnerships to prioritize placements for people exiting homelessness and for other priority populations (including people with intellectual disabilities and those leaving institutional settings).