Affordable housing in Vermont, a crisis in need of solutions

By Matthew Durkee

Editor’s note: Durkee is the New England Regional president and leads Community Bank’s team. He’s a native Vermonter and has been active in the local banking community for his entire 30+ year career.

Like many other states in the U.S., Vermont is facing a severe affordable housing crisis. Affordable Housing Month [May] provides an opportunity to raise awareness about the current crisis and the need for more affordable housing options. 

Affordable housing is defined by the U.S. Dept. of Housing and Urban Development as housing where the occupant is spending 30% or less of their gross income on total housing—including utilities—and is typically available in low- to moderate-income areas.

The housing crisis is particularly concentrated in cities where the cost of living is high and rental prices are skyrocketing. Chittenden County for example, is approximately 2,000 units of affordable housing short of demand. There is an urgent need, throughout Vermont, to meet the basic housing needs of its community members. Without actions to address the crisis, the situation is likely to worsen with more and more Vermonters facing housing insecurity.

The 2019 Vermont Housing Finance Agency (VHFA)’s Affordable Housing report contained several startling observations, including:

47,000 privately owned households (19% of total housing) were cost burdened, paying up to 49% of their income for housing.

38,000 privately owned households (15%) were severely cost burdened, paying over 50% of their income for housing.

This combination means that over one third of Vermont households are living in unaffordable housing.

This is even more severe for renter households, of which 51% live in unaffordable housing.

The VHFA report also outlined four drivers of housing costs: 1) land and labor costs; 2) investment for energy efficiency; 3) inefficiencies from regulations; and 4) financing costs. It’s important to note that this report was issued prior to the onset of the Covid-19 pandemic and the historic rise in inflation. 

So where are we since 2019?

Land and labor: Wages have risen significantly across almost all industries, and labor