By Peter G. de Krassel
Editor’s note: Peter G. de Krassel is the founder of Breaking Housing Matters and the author of the newly released book “Custom Maid Housing for New World Disorder.” He will host a book signing and presentation regarding innovative housing solutions at the Rutland Free Library on Thursday, Dec. 5 at 6 p.m.
In the recent election, Vermonters sent lawmakers a clear message: the state has become too expensive, and urgent action is needed to address issues threatening economic security. Chief among these challenges is the housing crisis.
Vermont’s housing costs are soaring, making homeownership and rental opportunities out of reach for many. The median sale price of a home now exceeds $400,000, while the average annual salary hovers just under $75,000. You don’t need to be a mathematician to see the problem: first-time homebuyers and working Vermonters face a near-impossible task in securing housing.
Add to this the fact that the Vermont Housing Finance Agency estimates that 40,000 new housing units will be needed by 2030 to meet demand—a daunting figure for a state with a population of just 645,000. Meanwhile, demographic trends paint an even bleaker picture.
Vermont’s population is aging rapidly, with more than 20% of residents over 65 and over 35% older than 54—the typical age at which Americans begin to exit the workforce. The share of residents in their prime working years is alarmingly small.
A labor shortage is already here, with Vermont’s unemployment rate at just 2.3% in October—nearly half the national rate. However, attracting new workers to Vermont is almost impossible without affordable housing options.
The data is clear: Vermont desperately needs affordable and workforce housing. While this is a daunting challenge, it is not impossible. With decisive, innovative action, this growing crisis can be addressed.
One promising solution is the Housing Subsidy Solution (HSS)—a public-private model designed to build affordable housing profitably. This approach would make housing accessible for homeowners and renters while ensuring developers and landlords earn a fair return on investment.
Here’s how it works:
The HSS would operate as a partnership between the government and private sector, managed by private stakeholders. The principle is simple: no one should pay more than 25% of their income on a mortgage or rent, while developers and landlords receive a reasonable return. A subsidy fund would bridge the gap between actual costs and renters’ or buyers’ affordability.
Five stakeholder groups would drive HSS:
1. Government: City councils, state legislatures, and agencies would collaborate with the federal government to streamline and direct grants and benefits to HSS projects.
2. Philanthropy: Public and private foundations, philanthropic organizations, and other private entities would contribute financial support.
3. Developers and landlords: These stakeholders would dedicate a portion of their profits to the fund.
4. Financial institutions: Banks and lenders could allocate a small percentage of every loan to HSS, offer innovative options like reverse mortgages, and encourage their charitable arms to support the fund.
5. Houses of worship: Faith-based organizations enjoying tax-exempt status could allocate up to 50% of donations to support affordable housing initiatives.
It’s time to reimagine our approach to housing—building homes that are affordable for buyers and renters while ensuring profitability for landlords and developers. Vermont needs a paradigm shift to address the housing crisis, and the Housing Subsidy Solution provides a pathway to do just that.
By taking bold, collective action, Vermont can lead the way in building affordable housing today, creating a model for the rest of the nation to follow.
