Vermont report urges bulk purchases and statewide codes to scale off‑site homebuilding

A joint hearing of the House Commerce & Economic Development Committee and the House General and Housing Committee in Montpelier on Feb. 5, 2025 heard a report recommending bulk purchases, expanded factory capacity and statewide building‑code standards to scale off‑site homebuilding across Vermont.

The report, presented by consultant Jeff Lubell and co‑authored by Seth Leonard, was commissioned by the Vermont Housing Finance Agency, the Department of Housing and Community Development and other state partners to study “opportunities to utilize off‑site construction to meet Vermont’s housing, workforce and climate goals.” Lubell told lawmakers that “off‑site construction is the production of housing in a factory environment rather than on‑site.”

Why it matters: Vermont faces a shortage of housing affordable to working families and very high construction costs. Lubell said projects that applied for 9% low‑income housing tax credits to VHFA in February 2024 averaged about $520 per square foot — “over $500,000 a unit” — which he said makes affordability without large subsidies impractical. The report and agency witnesses described off‑site methods — manufactured housing, volumetric modular and panelized construction — as tools to reduce unit costs, build faster and create year‑round factory jobs.

Report findings and examples: Lubell outlined three common off‑site approaches and their tradeoffs. Manufactured housing is governed by the federal HUD code and typically rides on a chassis; volumetric modular construction produces boxed modules that are joined on site; panelized systems deliver wall and ceiling panels for on‑site assembly. He cited Vermont manufacturers such as Huntington Homes and noted an accessory dwelling unit example built with compressed straw‑bale exterior walls. Lubell also described recent HUD code changes that allow assemblies of multiple manufactured modules to form duplexes or small multi‑unit buildings.

Benefits and limitations: Witnesses said off‑site construction can shorten timelines, reduce waste, and broaden the labor pool by creating repeatable factory tasks. Lubell warned, however, that cost savings require standardization and volume; bespoke factory builds can retain many of the same architecture and engineering costs as site‑built housing. He also cited high upfront capital costs for factories, workforce constraints, and public perception challenges around “trailer park” stigma as barriers to wider adoption.

State pilots and investments: Deputy Commissioner Nate Formulare, Department of Housing, described an existing mobile home infill pilot launched after recent flooding. Formulare said the state, working with Vermont State Housing Authority (VSHA) and other partners, purchased 30 manufactured homes under the program; those homes “were placed as they arrived in the state” and were under contract or headed to closing by December. Formulare also confirmed the department awarded a $60,000 Community Development Block Grant (CDBG) to support a feasibility study for restarting an idle manufactured‑housing facility in Fairhaven.

Policy options discussed: The report’s recommended next steps — discussed by Maura Collins, executive director of the Vermont Housing Finance Agency (VHFA), and agency staff — included exploring bulk purchase guarantees to aggregate statewide demand, investing in expanded factory capacity (including support for restarting Fairhaven), developing catalogued standardized multifamily designs, adopting statewide codes and preapproval processes for off‑site products, and targeted business assistance or small grants for existing manufacturers considering expansion or automation.

Financing and regulatory issues: Lubell and panelists noted that modular and panelized homes can access the same mortgage financing as site‑built houses when entitled as real property; manufactured homes face financing limitations if treated as personal property and not sited on permanent foundations. Formulare and Collins said local zoning variation, local permitting and differing municipal building code requirements currently complicate deployments across multiple towns. Lubell recommended statewide technical standards and inspection processes to reduce that barrier.

Next steps: Collins said VHFA, DHCD and other partners are interested in advancing several of the report’s recommendations but warned the agencies lack staff capacity to lead all implementation work without outside help. She estimated additional support would likely require hiring a consultant or temporary capacity “in the hundreds of thousands of dollars” to scope bulk‑purchase models, catalog designs and detail implementation steps. Committee members asked for a clear proposal and cost estimate to consider action during the session; Collins and agency staff said they would return with timelines and budget estimates.

The hearing closed with lawmakers and agency staff agreeing to continue discussions and to explore regional coordination with neighboring states to increase volume and reduce pipeline risk.