House Appropriations hears H.938 to create Vermont homelessness response continuum, carry $82.6M in FY27

The House Appropriations Committee on March 17 heard H.938, a bill that would establish a statutory Vermont homelessness response continuum administered by the Office of Economic Opportunity (OEO) and carried $82.6 million in the fiscal‑year 2027 budget proposal. Committee counsel said the bill aims to reduce reliance on hotel and motel placements and create a predictable, implementable system of prevention, shelter and permanent supportive housing.

The bill would create a new chapter in Title 33 to define eligibility, assign administration to OEO, and set a multi‑level continuum with prevention and diversion as the primary entry point, shelter options ranging from low‑barrier to highly structured and specialized beds, permanent supportive housing, and limited hotel/motel use when appropriate. ‘‘This creates in statute an ongoing program that provides a continuum of services and attempts to place a household in the service that best meets their need,’’ said Katie McLennon, Office of Legislative Counsel.

Sponsors and staff told the committee the proposal mirrors the governor’s funding recommendation for these services. Nolan of the Joint Fiscal Office confirmed the bill ‘‘talks about the $82.6 million of expenditure’’ carried in the budget and said the proposal uses the same budget lines (one‑time, base, GC federal funds) the governor recommended. He noted capacity limits and the bill’s direction that departments implement ‘‘to the fullest extent of their ability’’ in FY27 while building toward full implementation in FY28.

Key program details in H.938 include: - Prevention and diversion as primary entry, with a brief standardized assessment and flexible funds intended to resolve immediate barriers. - Shelter tiers: highly structured shelter beds with case management and programming; low‑barrier shelters with fewer entry rules; and specialized shelters for needs such as substance use disorder or severe mental health conditions. - Permanent supportive housing combining long‑term rental assistance with voluntary supportive services and case management. - Hotel and motel use permitted only until sufficient alternatives exist; statutory caps of 700 rooms per night from April 1–Nov. 30 and 1,000 rooms per night from Dec. 1–March 31 (placements related to domestic or sexual violence are excluded from the caps). - Time limits: non‑rental prevention/diversion housing capped at 30 days per rolling 12‑month period; hotel/motel stays capped at 70 days during April–November (cold‑weather continuous use between Dec.–Mar. is treated differently and not counted toward the 70‑day cap); DCF may grant rule‑based extensions for medical necessity or lack of reasonable alternatives. - A bridge rental assistance program through the Vermont State Housing Authority limited to 24 months that does not cover full rent but pays landlords directly and prioritizes current HOME recipients. - Reporting and oversight requirements, including annual reporting in the department’s budget presentation on households served, average and median lengths of stay, hotel/motel utilization and nights, returns to homelessness at six and 12 months, regional capacity gaps, total expenditures by funding source, and cost‑efficiency analysis.

McLennon said the bill also includes rulemaking deadlines: emergency rules to take effect July 1, 2026, and permanent rules to be adopted by Oct. 1, 2027. The statute directs work with HUD and existing continuums of care to establish a single statewide continuum by Oct. 1, 2028.

Committee members raised operational questions. One member noted municipal cold‑weather supports are designed to be low‑barrier and told the committee those municipal popup shelters were intended not to be burdened with coordinated‑entry data collection. A separate line of questioning asked about legal assistance, fair hearings and whether additional resources would be provided to help households navigate appeals; sponsors said the bill clarifies notice and fair hearing procedures but does not add new resources for legal representation.

Members also pressed on fiscal scale and per‑person costs during the hearing. A participant cited an estimated per‑person annual cost of about $35,578; Nolan and sponsors responded that the committee did not have a definitive per‑person fiscal study at the hearing and that caseload estimates (people served at a point vs. over time) vary. Nolan reiterated that the bill carries the governor’s recommended funding and that more granular finance details would be available in a spreadsheet to be reviewed at the committee’s follow‑up session.

Said Representative Julie McGill, a bill sponsor: ‘‘This bill is designed to move away from the de facto hotel model and establish a stable, structured, measurable system that moves people toward stable, supportive, independent housing.’’

The committee did not vote on H.938 at the March 17 hearing; members scheduled a follow‑up session with Representative Wood and planned a detailed budget spreadsheet review the next day. The bill’s phased implementation and the statutory rulemaking timeline — emergency rules July 1, 2026, and permanent rules by Oct. 1, 2027 — remain the committee’s principal guideposts for moving the program into operation.