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VHCB: ARPA conversion to general funds narrows pipeline, developers may pause work
Summary
The board said an expected $30 million in ARPA funding became general‑fund replacement dollars, leaving roughly $13.5 million available and increasing uncertainty that may halt predevelopment activity.
The Vermont Housing & Conservation Board told the Senate Economic Development, Housing & General Affairs Committee that changes to how American Rescue Plan Act (ARPA) funds were treated reduced the available state housing dollars and disrupted developer confidence.
The reduction matters because when developers expect capital to be available they spend predevelopment dollars on permitting, design and option payments; if that capital is uncertain, the board said, developers may pause or stop predevelopment activity and projects can stall.
Majors said VHCB had been written into the budget for $30,000,000 in ARPA funding but that later action converted ARPA allocations into general‑fund replacement dollars, leaving the board with approximately $13,500,000 available for projects administered by VHCB and some federal grants the board manages. "If the capital resource — if you're a developer and you don't think the resources are gonna be there to fund your project, you're gonna stop also stop spending money," Majors told the committee.
Presenters said the ARPA change was intended to avoid returning federal dollars that missed federal expenditure deadlines, but it reduced new capital available to support the large project pipeline VHCB is carrying into fiscal 2026. The board estimated a pipeline near $80,000,000 in total project requests to VHCB for fiscal 2026 and said that the smaller state allocation will likely slow projects that rely on VHCB gap financing.
Committee members and presenters discussed whether budget adjustment or other state budget actions might replenish some funds; Majors said it remained unclear whether additional dollars would be made available through the budget adjustment process.
The board concluded that certainty about capital availability is a key factor for keeping projects moving through permitting, design and closing.
