Vermont housing board urges mix of shelter expansion and permanent affordable homes as bill H91 advances

Beth Stewart, director of the Vermont Housing & Conservation Board, and Polly Major, the board’s policy director, told a legislative committee that Vermont must balance investments in emergency shelter capacity with longer-term construction of permanently affordable homes as lawmakers consider changes in bill H91. "We have taken in close to 1,600 households" into housing during the pandemic, Stewart said, describing the scale of the state’s recent response.

The testimony centered on why a dollar of state investment can produce either a shelter bed or a permanent home and how the mix of leverage from federal tax credits and private capital makes permanent housing cost-effective over time. The board recommended integrating hotel- and shelter-based programs under a single administration, using coordinated entry for referrals, and allowing services to follow tenants after placement to improve housing stability.

The committee heard examples of conversions and new developments across Vermont that the board supports: a formerly vacant upper story project in Montpelier that now provides 19 apartments (five with explicit protections), multiple Rutland-area projects including an 86-unit pipeline, and several hotel-to-housing conversions that expanded shelter and later became apartments. Stewart said conversions have helped triple capacity at one domestic-violence shelter from seven to 21 units.

Polly Major outlined the board’s comments on H91 and emphasized program design details that affect rehousing outcomes. She urged careful eligibility rules so families do not avoid seeking help out of concern that only households with recorded evictions will qualify. Major also stressed that success often depends on service providers staying involved beyond the short post-placement period available in some programs.

Witnesses discussed cost comparisons the board presented: shelter projects typically have lower overall development costs than permanent homes, but state per-unit investment is roughly similar because more outside leverage is available for permanent projects (for example, low-income housing tax credits and historic tax credits). Major described how tax-credit leverage (the "yellow" portion on the board’s chart) is generally not available for shelter projects, which limits outside capital for shelters.

Committee members asked about convertible shelter design, capacity estimates, and pipeline funding. Stewart said the board looks for properties that can plausibly convert from emergency shelter to housing (citing one Williston Road hotel that became 20 apartments) but that not every shelter site can be converted. The board also noted operational strain on property managers from integrating households who entered housing through emergency placements and described a new philanthropic grant to bolster service coordination: "We just got a $3,000,000 philanthropic grant," Stewart said, to hire roughly 10 staff over three years to increase service coordination capacity.

On funding, Stewart told lawmakers the board has about $13 million remaining this year against roughly $37 million in applications, that an $8.5 million adjustment had been added in the current budget action, and that the board expects at least $50 million in applications next year. She cautioned that housing development will slow if developers cannot count on state resources before spending on permits or designs.

Witnesses flagged the state formula that ties board funding to the property transfer tax and noted the governor’s budget recommends full funding from that source; the board warned that reliance on transfer tax revenue means housing funding will fall in downturns and that recent ARPA (American Rescue Plan Act) and one-time funding cannot be replicated indefinitely. Stewart said policymakers will need “an additional tool” beyond the transfer-tax formula to address the scale of need.

Committee members pressed for more data on unit counts and per-unit costs; the board confirmed that their charts show per-unit development costs. Representative Ashley Inkumsah asked whether shelters can be planned to convert to apartments later; Stewart said conversion is an evaluation criterion but not universally feasible. A resident quoted in Stewart’s remarks summarized the human impact: "That's what housing can do," the resident said, describing improved health and stability after obtaining housing.

The board emphasized permanent affordability as a policy priority: restrictions that keep public investments affordable in perpetuity protect the public asset from market-driven gentrification and allow recycling of the investment for future households. Major and Stewart also highlighted targeted programs—shared-equity homeownership, mobile-home community support, recovery residences (four projects for 59 beds), and permanent supportive housing tied to on-site services—as parts of a broader strategy.

The committee will continue testimony on H91 the next day; witnesses scheduled include nonprofit shelter and housing operators who the board said could provide operational perspectives on proposed program rules and nonprofit hotel-operator models.