Evernorth brief to committee explains low‑income housing tax credits, perpetual affordability and financing constraints

Kathy Byer, senior vice president for Evernorth, told the House Committee on General & Housing on Jan. 15 that federal low‑income housing tax credits, state soft funds and long‑term affordability covenants are the backbone of much affordable rental production in Vermont.

Byer described the basic financing mechanics of LIHTC and the role of syndication: a project receives a tax‑credit allocation from the Vermont Housing Finance Agency, forms a limited partnership, and sells those credits to investors (typically banks or corporate investors) to raise equity. That equity replaces debt in the capital stack, allowing lower rents that preserve affordability. "The low income housing tax credit program allows you to replace some of that debt with equity," Byer said.

Byer emphasized three related points. First, Vermont needs housing of many types, not just single‑family homes, to meet targets such as the 30,000‑unit goal discussed in the session. "We can't address that all with single family homes," she said, noting multifamily rental and manufactured housing are part of the solution.

Second, Evernorth deploys substantial resources in Vermont: Byer said about 320 units were under construction (representing roughly $126 million in construction contracts) and 349 apartments were in predevelopment across 13 projects. She said those projects are located across the state in places including West Rutland, St. Johnsbury and Arlington.

Third, Byer described the state’s commitment to perpetual affordability. She said affordable rental owners record covenants in land records that commit units to affordability over the long term (with carve‑outs such as foreclosure). "We will be signing a document that goes in the land records and it says we are going to do that basically forever," Byer said, explaining that this permanence keeps affordable units in the housing stock for communities.

Byer outlined the practical difference between 9% and 4% LIHTC awards: 9% credits generate a larger equity share (often 60–70% of a project’s capital stack) but are limited and highly competitive; 4% credits generate less equity and usually require more supplementary soft funding. She told the committee the 9% credits are finite and applications are competitive, with an annual application cycle.

On syndication and investors, Byer said Evernorth helps assemble equity pools and cited a $75 million equity fund across three states involving multiple banks as an example of how equity is allocated to projects. She described syndication as a way to pool investor tax appetite and direct equity to projects across jurisdictions.

Committee members asked questions about program mechanics, project scale and construction risks. Byer said tariffs and other supply‑chain pressures are raising construction costs and could reduce the number of projects that can proceed. "It's going to add to construction costs," she said, noting that higher costs mean fewer homes built for a given level of resources.

Byer asked lawmakers to continue supporting state soft funds — including the Vermont Housing Conservation Board allocations and other programs — which she said are included in every project Evernorth builds. She said the company’s production pipeline had doubled since mid‑2020 and that state funding remains critical to closing financing gaps.

Less critical details: Byer described shared‑equity homeownership and historic preservation tax credits as additional tools used in some communities, and noted the federal mortgage interest deduction remains the largest federal housing program by dollar value (her remark was framed for context, not as a specific policy proposal).