Senate accepts $2 billion housing infrastructure plan, sends bill to governor

The Vermont Senate on the floor accepted the committee of conference report on S.127, a $2 billion infrastructure program intended to support community and housing projects, and then voted to message the bill to the governor immediately.

Supporters said the Community and Housing Infrastructure Program, or CHIP, is intended to let communities use tax-increment financing-style tools more broadly to invest in infrastructure that enables housing construction. "You are about to vote on a $2,000,000,000 infrastructure program for the state of Vermont," the Senator from Chittenden Southeast said on the floor, summarizing the conference committee's work.

The senator who presented the report said the program includes a sunset through 2035, will leave the existing tax-increment financing (TIF) program in place, and provides higher increment-retention shares for affordable housing projects. "We gave an extra boost in the increment retention for affordable housing projects," she said, describing a split used in conference to favor affordability projects.

Discussion and key provisions

Supporters pointed to a series of numeric assumptions the conferees used to frame the program. The presenter said conference members used an illustrative $50,000 per housing unit estimate for the infrastructure component, citing data provided by Champlain Housing Trust: "$50,000 per unit is the average cost we were presented by the Champlain Housing Trust," she said. The report noted those per-unit infrastructure costs fall with greater density and scale but can be materially higher in rural projects.

The conference report includes a $200 million cap (described on the floor as a cap used in conference to limit annual approved increment) and a 10-year program term that, as presented, sunsets in 2035. The presenter described why conferees concluded the $200 million cap was an appropriate boundary after discussion of alternate figures earlier in the session.

The bill also includes nondiscrimination language on housing applications related to immigration status and identity documents. The presenter said the bill would allow applicants to provide a Social Security number, a tax identification number, or another government-issued ID and would prohibit making a Social Security number a required field that would render an application incomplete.

Education fund impact and fiscal framing

The presenter described modeling discussed in committee and conference to estimate impacts on the education fund and grand list growth from CHIP. She said the committees examined multiple spreadsheets and summarized that a $2 billion infrastructure investment over 20 years would yield about $2.66 billion in education-fund increment growth. The presenter also said, "At the peak, in about 2050, we would be using about $112,000,000 of increment and yielding about $150,000,000 of revenue to the education fund," a difference she characterized as roughly $38–$40 million at peak.

Concerns and questions

Senators pressed for clarifications on definitions and program mechanics. The Senator from Rutland asked for a definition of a "unit" and whether the $50,000 figure represented a complete housing unit; the presenter explained the $50,000 figure was an average cost for infrastructure per unit and not the cost to build a full housing unit, and stressed economies of scale when larger projects use the same infrastructure.

The Senator from Washington raised concern about language in the bill that could allow the bond bank and Vermont Housing & Conservation Board (referred to on the floor) to convert revolving loans into forgivable loans, saying, "a forgivable loan is not gonna be revolving" and that the decisionmaking criteria for such conversions were not specified in the text before the body.

Votes and next steps

The Senate accepted and adopted the committee of conference report on S.127 by voice vote and then voted to suspend the rules to message the actions taken on S.127 to the governor forthwith.

The presenter said all six conferees had signed the report and asked the body to concur. After the voice vote carried, the Senate suspended the rules and ordered the bill sent to the governor.

Ending

Senators framed S.127 as an infrastructure-focused initiative intended to expand where and how communities can invest in stormwater, transportation, and other systems that enable housing. The conference presenter said the package was designed to broaden access beyond a handful of communities that historically used TIF, while attempting to place guardrails on education-fund exposure and to prioritize affordable housing in increment-retention shares.