On April 24, 2024
State News

VHFA awards $40 million for affordable housing

Rutland and Woodstock are two of the five communities selected for apartment developments

The Vermont Housing Finance Agency (VHFA) Board of Commissioners announced April 15, that its annual award of federal housing tax credits will support the construction of 156 in “perpetually affordable” apartment buildings in five communities across the state. The sale of this year’s tax credits to investors is expected to yield over $40 million in funds, covering an estimated 60% of total project development costs.   

Two of the five apartment projects will be developed locally, in Rutland and Woodstock. The other three will be located in Middlebury, St. Johnsbury and Waterbury.

These housing construction projects will take place in a uniquely challenging environment. Elevated development costs, interest rates and housing needs among Vermonters heavily influence project planning. The cost of developing a unit of rental housing in Vermont has increased by approximately 50% since 2020.

“It’s no secret that we are in the midst of a housing crisis here in Vermont and across the country,” said Senator Bernie Sanders. “To my mind: Safe, quality, affordable housing is a human right — period. I look forward to seeing this federal funding go a long way in providing essential housing for working families, seniors, and those experiencing or exiting homelessness in Vermont.” 

Of these apartments, 27 will be service-supported homes for people exiting or at-risk of homelessness. Since 2020, the number of people in Vermont experiencing homelessness has more than doubled, even tripling in some parts of the state. 

Courtesy VHFA
Rendering of Marsh House in Waterbury, one of the projects approved for tax credit funding.

“Affordable housing is an investment in our economy and the wellbeing of Vermonters,” said Senator Peter Welch. “These new and affordable homes will help Vermonters plant roots in their community and provide the stability to access the services and job opportunities they need. We fought for these federal tax credits to help Vermont build more affordable housing in five communities at a time of extreme challenges — a housing crisis, high inflation and development costs, and urgently needed affordable housing across Vermont.”   

Rutland: 30 new apartments

The 133 Forest Street development will create approximately 30 new apartments in the southwest neighborhood of Rutland City, in proximity to the city’s Designated Downtown District. Of the 30 apartments, 24 will be housing credit units. The Housing Trust of Rutland County (HTRC), the property manager, employs a resident service coordinator who will provide project-wide on-site services. Additionally, in collaboration with the Homeless Prevention Center, the sponsor will designate six apartments to address the needs of chronically homeless individuals. Finally, eviction prevention and housing retention focused services will be provided by HTRC. 

Woodstock: 39 new apartments

Mellishwood will be three buildings of approximately 39 apartments for seniors in the Village of Woodstock managed by Twin Pines Housing Trust. Of the 39 apartments, 37 will be housing credit units affordable to households at or below 60% Area Median Income (AMI). All 39 of the units in this project are eligible for support from Twin Pines’ Supportive Service staff. Four of the apartments on site and six off site but within the Twin Pines’ portfolio, will be targeted for formerly homeless/at risk of homelessness individuals.  

As for the other three towns selected: Middlebury will gain 35 new apartments and St. Johnsbury and Waterbury will each gain 26 new apartments.

“Housing is central to every challenge we face, it is the foundation of support for working families,” said Congresswoman Becca Balint. “We are facing a housing crisis in Vermont and these Low Income Housing Tax Credits will allow Vermonters to build more housing to meet our critical need. This will be so impactful for working families, providing the stability children and families need to thrive.” 

Vermont’s federal delegation continues to support legislation increasing the amount of housing credits available to Vermont and expanding eligibility that could create an additional 2,600 affordable housing units over the next 10 years.

In addition to the housing credits awarded by VHFA, other funding sources for these developments include grants and loans from the Vermont Housing and Conservation Board, federal HOME program, the American Rescue Plan Act, the Federal Home Loan Bank’s Affordable Housing Program, the Town of St. Johnsbury, the City of Rutland, Efficiency Vermont, as well as various programs from Vermont Agency of Commerce & Community Development  including the Vermont Community Development Program, Brownfield Remediation program, and Community Partnership for Neighborhood Development. When the apartments come online, Vermont State Housing Authority and Rutland Housing Authority will provide project-based rental assistance, which will further reduce rent for several units, allowing the projects to provide deeper affordability 

With construction of some of the buildings starting in September 2024, the initial occupancy for the apartments is projected in December 2025 through September 2026.

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