Rep. Stevens: Address the housing crisis instead of passing the buck

March 7, 2024  |  By Rep. Tom Stevens

The General Assembly is gearing up for a difficult end to the biennium, and of the many issues tightening the screws on our society, housing remains at the top of the list. It’s not because housing holds more importance than education, health care or justice, but because the social and financial costs have outweighed the others. This increase in fundamental costs has made it difficult to address the fundamental needs, for no other reason than we’re also in the midst of chronic and deep homelessness, which requires emergency spending.

We are in the middle of a housing crisis. And yet the governor refuses to call for a housing state of emergency, which would expedite the on-the-ground and in-the-moment decision-making process we need.

We are not alone. States around the country and countries around the world are reporting a shortage of housing, as well as an increase in the unhoused. Families are being displaced because of rising rents, and employers say attracting out-of-staters to live and work here in Vermont has become more difficult due to high prices and limited supply, a notion also not unique to us.  

Why  have prices increased? If we look back to March 2020, we would see market prices that increased about 3% a year, with matching raises in wages, taxes, food, etc. In other words, what passed for normal for about a generation. Interest rates were dropping slowly, but health insurance costs were rising and housing, affordable or otherwise — except for the most expensive homes — was not being built fast enough. When the pandemic shut down the world, real estate prices and rentals dropped, sometimes by as much as 25%. 

As we emerged from the pandemic, “normal” did not return. First, commodity prices rose due to supply chain interruptions. Wallboard, plywood and other homebuilding components doubled or tripled in price, and delivery time was substantially delayed. Second, labor costs grew but the labor workforce dropped. Construction prices per square foot increased; the sales market exploded and so did the rental market. And third, the price of money doubled, with interest rates going from below 4% to 8%, before receding to 7% now. All of a sudden, it was too expensive to build, too expensive to buy, and too expensive to live.

In the legislature, this meant the money allocated to investing and constructing new homes and multi-units was going to build fewer than anticipated and far fewer than needed.

On a positive note, since 2020 we have seen hundreds of new units of varying sizes completed — homes, multi-units, and rehabs. These investments are expensive and have been done with mostly federal dollars. Now that those federal dollars have stopped flowing, what’s happened?

For starters, a proposed 90% decrease in housing investments, at a time when we all agree we are in crisis. Gov. Phil Scott mentioned housing as a top priority in his January 2024 budget address, but then delivered a proposed budget with a 90% funding drop. 

The method espoused by some is to build more, faster and cheaper. But there’s nothing we can do to fulfill these methods in the short term. With a lack of labor, constant increases in the commodities needed to build (including interest rates), and the necessary time to plan homes and communities with an eye on climate change and to the due process we allow those in the community to oppose building, we are unlikely to see “faster” construction. 

What can be done first is to keep people in their homes. During the pandemic, we kept thousands of Vermonters in their homes, be they single-family or multi-unit, which prevented a further public health crisis. Programs for upstream eviction prevention, already passed by the legislature, would provide back rent for landlords and full representation for tenants in eviction court — programs that may reduce evictions by over 50%. Keeping people in their homes is far less expensive than eviction proceedings which may lead to more families and individuals becoming unhoused, which leads to more funds spent placing these Vermonters in substandard housing without services.

What can be done, most of all, is to continue our investment, which is another way of saying “more money.” We will need additional funding for building, for services, for rental support. If we are to use state tax dollars for middle-income housing, we must use those dollars wisely, and consider expanding the necessary water and sewer components that have, too, become very expensive to build.

Proclaiming “housing” to be a priority and then cutting investment by 90% is not addressing the problem soberly. It is literally passing the buck.

Rep. Tom Stevens, D-Waterbury, is chair of the House General and Housing Committee in the Vermont House of Representatives. He represents the Washington-Chittenden District that’s Waterbury, Bolton, Huntington and Buel’s Gore.