Lawmakers, industry witnesses urge tailoring of H.607 to avoid chilling housing investment

Chair Debbie Dalton convened the House General and Housing committee on March 12 to begin reviewing H.607, a bill aimed at addressing purchases of single-family and small multifamily housing by institutional and private-equity buyers. Witnesses told the committee the proposal raises tradeoffs that merit careful tailoring rather than a blanket prohibition.

Peter Tucker, director of advocacy and public policy for the Vermont Association of Realtors, said his organization will "oppose H.607 as constructed at this point," calling the measure a "big city problem" that does not reflect Vermont's largely rural housing market. "Policies that unintentionally discourage housing investment, particularly from out of state capital sources, risks slowing development and rehabilitation of housing at a time when Vermont needs more investment, not less," Tucker said.

Tucker and other witnesses urged lawmakers to focus on how the bill defines an "institutional investor." He noted counsel's three-category test and questioned a 10-unit threshold in the draft, citing an executive-order threshold of 100 single-family homes as a contrasting example. "Ten just seems like a very small number," Tucker said, adding that miscalibrated thresholds could sweep in local developers or small Vermont investors.

Tucker also raised practical concerns about the bill's proposed 90-day waiting period before an investor may close on a purchase. He said such a delay could "penalize the seller of the property" who needs to move quickly and could be problematic if market-driven price changes restart the waiting period. He used the Burlington Square housing project—cited in testimony as roughly a $300 million development—to illustrate the scale differences lawmakers must consider when setting thresholds.

Tax treatment was another point of emphasis. Tucker warned that classifying buyers as institutional investors and limiting their ability to claim depreciation and interest could "eliminate any interest in investing in real estate," deterring both small and large investors who finance construction or rehabilitation.

Chris Delia, president of the Vermont Bankers Association, told the committee H.607 appears focused on property acquisitions rather than mortgage sales in the secondary market. "It is clear that this bill is focusing on purchasing a single or two family home. It is not focusing on purchasing the mortgage," Delia said, adding that he did not see the bill affecting lenders' secondary-market sales practices in its current scope.

Delia raised a separate operational concern about foreclosure-related transactions. He explained that creditors typically do not hold title until a foreclosure sale is completed and described Vermont's judicial foreclosure process—often involving mediation and taking months or years. "I'm concerned... does this in any way impact the foreclosure process that we already have in Vermont?" he asked, and recommended the committee consider an exemption for foreclosure acquisitions to avoid keeping properties out of the market longer than necessary and undermining borrower protections.

Local officials from Stowe described on-the-ground impacts in resort communities. Charles Stafford, Stowe town manager, said Stowe's high assessed values and prevalence of seasonal or second-home ownership have pressured year-round residents and pushed down the homestead share of parcels. He said Stowe has created a housing task force, is developing rules to cap short-term rentals, and launched a short-term-rental registry that revealed some owners reap six-figure returns—making modest regulatory fees politically and economically fraught.

Committee members repeatedly framed the hearing as an early, investigative stage rather than a call for immediate votes. Chair Debbie Dalton said the committee is "not likely to be voting a bill out before crossover" and asked witnesses to return with specific suggestions on thresholds and targeted language so the panel can address problematic behaviors without constraining legitimate redevelopment or construction activity.

The chair said the committee will resume H.607 after the House floor session the next day; members also noted related bills under consideration, including an ADA coordinator measure scheduled for review. The hearing record showed agreement across several witnesses and members that thresholds, exemptions for foreclosure and redevelopment, and clearer behavioral targets would be essential to craft an effective Vermont-specific approach.