Senate panel advances draft committee housing bill after review of governor's budget allocations

Montpelier — The Senate Economic Development, Housing & General Affairs Committee spent its Jan. 27 session walking through a draft committee housing bill that combines elements of the administration's budget, sponsor proposals and prior housing bills, with the goal of introducing and voting on the measure later in the week.

Chair opened the meeting by saying the committee intends to —move forward on our committee housing bill— and asked staff and witnesses to help clarify the draft's components. The session included a presentation from Ted Barnett of the Joint Fiscal Office, who summarized the governor's recommended housing investments.

Barnett said the GovRec would make $4,000,000 in funding for the Vermont Housing Improvement Program (VHIP) base funding, add an $800,000 one-time appropriation for infrastructure repair in addition to $2,000,000 in base funding from last year's Act 27, and allocate property transfer tax (PTT) revenue under existing statutory formulas. He described the PTT forecast at about $82,000,000 overall, with $37,600,000 allocated to the Housing and Conservation Trust Fund and roughly 60% of that trust allocation expected to support housing — about $22,600,000 under the statutory calculation. Barnett also noted the administration's estimates are broadly in line with recent forecasts but slightly lower than earlier projections.

Committee members pressed staff for more detail on how the PTT revenues are calculated and on whether the new or one-time funding items are sufficient. Members asked the Joint Fiscal Office to post a table of PTT allocations and for DHCD and other administration witnesses to explain program-level impacts and performance metrics.

The committee then conducted a section-by-section review of drafting request 260748. Legislative counsel Cameron Wood said the draft remains unedited and will receive a title and purpose before introduction. The bill as drafted would:

- Add municipal planning requirements that would require municipalities to include specified analyses in their next comprehensive-plan update; staff advised the requirement would generally apply at the next update cycle rather than retroactively.

- Extend the Vermont Housing Finance Agency's authority to issue certain housing tax credits through 2031 (language to be finalized), and flag related release/payment thresholds for later discussion.

- Create an off-site construction pilot (bulk purchasing, streamlined regulations) that currently lacks the $6,000,000 appropriation the administration sought; members requested testimony from the treasurer and DHCD about funding and land costs.

- Place new limits on common-interest communities: ban unreasonable restrictions on long-term leasing of owner units and prevent HOAs from prohibiting in-home family childcare when the home operator complies with state and federal childcare regulations; the bill would preserve HOA authority to restrict transient short-term rentals. Sponsors argued the changes would expand renter access and child-care options; members asked for input from the Human Rights Commission, homeowners association representatives and childcare providers and raised questions about retroactive application and possible constitutional issues.

- Add a provision to allow condo owners to install EV chargers at their cost where they own parking spaces and to restrict HOAs from unreasonably prohibiting such installations.

- Cap increases in mobile-home lot rent and clarify mediation: the draft references a limit framework (members discussed 1% plus CPI in current practice) and noted that statute requires DHCD to pay reasonable mediation fees; members requested economic analysis to understand displacement risks.

- Give Vermont Economic Development Authority (VEDA) authority to finance multiunit housing projects (5+ units) in coordination with VHFA, using previously provided state funds as a financing tool.

- Continue oversight for service-supported housing via a task force or oversight mechanism, while members urged alignment with existing disability-council work inside AHS to avoid duplication.

- Make multiple municipal-zoning reforms: require municipalities that allow single-family residential development to allow manufactured homes and make duplexes and small multifamily (up to four units) a permitted use in districts served by municipal sewer and water; the bill refines the definition of —served by municipal sewer and water,— adding a quarter-mile buffer and capacity tests. Local officials and planning advocates will be asked to testify about capacity, definitions and implementation burdens.

- Authorize density bonuses for projects that use union labor or apprenticeships, increasing housing capacity in exchange for labor or workforce commitments; members asked for cost/benefit and capacity analysis before moving forward.

- Extend Act 250 interim exemptions and tweak tiered mapping rules (Tier 1a/1b), including a proposal to turn Tier 1b into an opt-out model for municipalities; the chair signaled that related land-use sections will likely be reviewed by Senate Natural Resources & Energy.

Throughout the hearing, members agreed to collect additional evidence and witnesses: DHCD, VHFA, VEDA, the treasurer's office, municipal officials (VLCT), the Human Rights Commission, disability-council staff and other stakeholders. The committee asked staff to produce a revised draft that incorporates agreed additions and to circulate supporting spreadsheets and technical clarifications.

The chair closed the session by scheduling continuation of markup the following morning at 9:00 a.m. and reminding members the committee aims to introduce and vote the committee bill later in the week.