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1 H.111
2 Introduced by Representatives Sims of Craftsbury, Harrison of Chittenden,
3 Andrews of Westford, Andriano of Orwell, Anthony of Barre
4 City, Beck of St. Johnsbury, Birong of Vergennes, Bos-Lun of
5 Westminster, Boyden of Cambridge, Branagan of Georgia,
6 Burrows of West Windsor, Buss of Woodstock, Campbell of St.
7 Johnsbury, Clifford of Rutland City, Cole of Hartford, Cordes
8 of Lincoln, Demrow of Corinth, Donahue of Northfield,
9 Donnally of Hyde Park, Elder of Starksboro, Farlice-Rubio of
10 Barnet, Galfetti of Barre Town, Graning of Jericho, Gregoire of
11 Fairfield, Hango of Berkshire, Jerome of Brandon, Labor of
12 Morgan, Lalley of Shelburne, Leavitt of Grand Isle, Lipsky of
13 Stowe, Maguire of Rutland City, McCann of Montpelier,
14 McGill of Bridport, Morgan, M. of Milton, Mrowicki of Putney,
15 Nicoll of Ludlow, Noyes of Wolcott, O’Brien of Tunbridge,
16 Pajala of Londonderry, Patt of Worcester, Roberts of Halifax,
17 Smith of Derby, Surprenant of Barnard, Taylor of Milton,
18 Templeman of Brownington, Torre of Moretown, Troiano of
19 Stannard, White of Bethel, Williams of Barre City, and
20 Williams of Granby VT LEG #365357 v.9
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1 Referred to Committee on
2 Date:
3 Subject: Housing; land use; municipal zoning; rental housing
4 Statement of purpose of bill as introduced: This bill proposes to make multiple
5 changes related to housing investment and regulatory reform. It would amend
6 the Vermont Rental Housing Improvement Program to expand eligible uses of
7 funds and provide additional funding, amend the Missing Middle-Income
8 Homeownership Development Pilot Program to expand geographic distribution
9 of funds and provide additional funding, and create the Middle-Income Rental
10 Housing Revolving Loan Program and a revolving loan fund to provide
11 subsidized loans for rental housing developments that serve middle-income
12 households. The bill would also amend the Municipal Bylaw Modernization
13 Grant Program to exempt municipalities with populations of less than 1,500
14 persons from the grant requirement to implement the complete streets
15 principals. It would appropriate funds to the Municipal Planning Grants with a
16 portion of the grants reserved for municipalities that do not yet have a
17 municipal plan or do not yet have zoning bylaws. The bill proposes to hire
18 Housing Resource Navigators at the Vermont Association of Planning and
19 Development Agencies for use by the regional planning commissions. It
20 would exempt housing projects in downtowns and village centers with zoning
21 from needing an Act 250 permit. It would remove the ability of 10 residents or
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1 property owners to appeal municipal zoning decisions. It would allow towns
2 to register with Agency of Natural Resources (ANR) to issue authorizations for
3 wastewater permits, in lieu of the ANR permit. It would not require mitigation
4 of primary agricultural soils under Act 250 for an alternative or community
5 wastewater system that will serve development within a designated area.
6 An act relating to workforce housing
7 It is hereby enacted by the General Assembly of the State of Vermont:
8 * * * Vermont Rental Housing Improvement Program * * *
9 Sec. 1. 10 V.S.A. § 699 is amended to read:
10 § 699. VERMONT RENTAL HOUSING IMPROVEMENT PROGRAM
11 (a) Creation of Program.
12 (1) The Department of Housing and Community Development shall
13 design and implement the Vermont Rental Housing Improvement Program,
14 through which the Department shall award funding to statewide or regional
15 nonprofit housing organizations, or both, to provide competitive grants and
16 forgivable loans to private landlords for the rehabilitation, including
17 weatherization, of eligible rental housing units.
18 (2) The Department shall develop statewide standards for the Program,
19 including factors that partner organizations shall use to evaluate applications
20 and award grants and forgivable loans.
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1 (b) Eligible rental housing units. The following units are eligible for a
2 grant or forgivable loan through the Program:
3 (1) Non-code compliant Non-code-compliant. The unit does not comply
4 with the requirements of applicable building, housing, or health laws and:
5 (A) the unit has been unoccupied for not less than 90 days prior to the
6 date of application; or
7 (B) the landlord agrees to antidisplacement measures developed by
8 the Department.
9 (2) New accessory dwelling unit. The unit will be a newly created
10 accessory dwelling unit that meets the requirements of 24 V.S.A. § 4412(1)(E).
11 The unit may be created within an existing structure or may be a new, or part
12 of a new, structure built on the existing parcel.
13 (3) New dwelling unit. The unit will be a newly created dwelling unit.
14 The unit may be created within an existing structure or may be a new, or part
15 of a new, structure built on an existing parcel.
16 (c) Administration.
17 (1) The Department shall require a housing organization that receives
18 funding under the Program to adopt:
19 (1)(A) a standard application form that describes the application
20 process and includes instructions and examples to help landlords apply;
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1 (2)(B) an award process that ensures equitable selection of landlords,
2 subject to a housing organization’s exercise of discretion based on the factors
3 adopted by the Department pursuant to subsection (a) of this section; and
4 (3)(C) a grant and loan management system that ensures
5 accountability for funds awarded.
6 (2) A housing organization that receives funding under the Program may
7 use a portion of the funding for reasonable administrative expenses, as
8 determined by the Department.
9 (d) General Program requirements applicable to grants and forgivable
10 loans.
11 (1) A grant or loan shall not exceed $50,000.00 per unit. In determining
12 the amount of a grant or loan, a housing organization shall consider the number
13 of bedrooms in the unit and whether the unit is being rehabilitated or newly
14 created.
15 (2) A landlord shall contribute matching funds or in-kind services that
16 equal or exceed 20 percent of the value of the grant or loan.
17 (3) A project may include a weatherization component.
18 (4) A project shall comply with applicable building, housing, and health
19 laws.
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1 (5) The terms and conditions of a grant or loan agreement apply to the
2 original recipient and to a successor in interest for the period the grant or loan
3 agreement is in effect.
4 (6) The identity of a recipient and the amount of a grant or forgivable
5 loan are public records that shall be available for public copying and inspection
6 and the Department shall publish this information at least quarterly on its
7 website.
8 (7) A landlord shall not offer a unit assisted through the Program as a
9 short-term rental as defined in 18 V.S.A. § 4301.
10 (8)(A) In a project with multiple new dwelling units, not more than five
11 units are eligible for Program funding.
12 (B) The Department may adopt additional Program parameters to
13 ensure a wide distribution of units among developers and geographic areas.
14 (9) The Department or housing organization shall use amounts that are
15 repaid or recaptured to provide additional grants or loans under the Program.
16 (e) Program requirements applicable to grants for new or non-code-
17 compliant units. For a grant awarded under subdivision (b)(1) or (b)(3) of this
18 section for a unit that is non-code compliant non-code-compliant or a new
19 dwelling unit, the following requirements apply for a minimum period of five
20 years:
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1 (1)(A) A landlord shall coordinate with nonprofit housing partners and,
2 local coordinated entry organizations, or other similar organizations as
3 determined by the Department to identify potential tenants qualifying
4 households.
5 (B) As used in this subsection (e), “qualifying household” means a
6 household that is:
7 (i) exiting homelessness or in need of resettlement; and
8 (ii) referred by a local coordinated entry organization, refugee
9 resettlement program, or another similar organization or program approved by
10 the Department.
11 (2)(A) Except as provided in subdivision (2)(B) of this subsection (e), a
12 landlord shall lease the unit to a qualifying household that is exiting
13 homelessness or actively working with an immigrant or refugee resettlement
14 program.
15 (B) If, upon petition of the landlord, the Department or the housing
16 partner or organization that issued the grant determines that a qualifying
17 household exiting homelessness is not available to lease the unit, then the
18 landlord shall lease the unit:
19 (i) to a household with an income equal to or less than 80 percent
20 of area median income; or VT LEG #365357 v.9
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1 (ii) if such a household is unavailable, to another household with
2 the approval of the Department or housing organization at or below the
3 applicable fair market rent, including utilities not covered by rent payments, as
4 established by the U.S. Department of Housing and Urban Development.
5 (3)(A)(C) A landlord shall accept any housing vouchers that are
6 available to pay all, or a portion of, the tenant’s rent and utilities.
7 (B) If no housing voucher or federal or State subsidy is available, the
8 total cost of rent for the unit, including utilities not covered by rent payments,
9 shall not exceed the applicable fair market rent established by the Department
10 of Housing and Urban Development.
11 (4)(A) A landlord may convert a grant to a forgivable loan upon approval
12 of the Department and the housing organization that approved the grant.
13 (B) A landlord who converts a grant to a forgivable loan shall receive
14 a 10-percent credit for loan forgiveness for each year in which the landlord
15 participates in the grant program.
16 (f) Requirements applicable to forgivable loans for new or non-code-
17 compliant units. For a forgivable loan awarded under subdivision (b)(1) or
18 (b)(3) of this section for a unit that is non-code compliant new or non-code-
19 compliant, the following requirements apply for a minimum period of 10
20 years:
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1 (1)(A) A landlord shall accept any housing vouchers that are available to
2 pay all, or a portion of, the tenant’s rent and utilities.
3 (B) If no housing voucher or federal or State subsidy is available, the
4 cost of rent for the unit, including utilities not covered by rent payments, shall
5 not exceed the applicable fair market rent established by the Department of
6 Housing and Urban Development.
7 (2) The Department shall forgive 10 percent of the amount of a
8 forgivable loan for each year a landlord participates in the loan program.
9 (g) Requirements for an accessory dwelling unit.
10 (1) For a grant or forgivable loan awarded under subdivision (b)(2) of
11 this section for a unit that is a new accessory dwelling unit, for a minimum
12 period of five years, the total cost of rent for the unit, including utilities not
13 covered by rent payments, shall not exceed the applicable fair market rent
14 established by the Department of Housing and Urban Development.
15 (2) A landlord shall not offer an accessory dwelling unit created through
16 the Program as a short-term rental, as defined in 18 V.S.A. § 4301.
17 (h) Lien priority. A lien for a grant converted to a loan or for a forgivable
18 loan issued pursuant to this section is subordinate to:
19 (1) a lien on the property in existence at the time the lien for
20 rehabilitation and weatherization of the rental housing unit is filed in the land
21 records; and VT LEG #365357 v.9
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1 (2) a first mortgage on the property that is refinanced and recorded after
2 the lien for rehabilitation and weatherization of the rental housing unit is filed
3 in the land records.
4 (i) Loan conversion.
5 (1) A landlord may convert a grant to a forgivable loan upon approval of
6 the Department and the housing organization that approved the grant.
7 (2) A landlord who converts a grant to a forgivable loan shall receive a
8 10-percent credit for loan forgiveness for each year in which the landlord
9 participates in the grant program.
10 Sec. 2. VHIP; APPROPRIATION
11 In fiscal year 2024, the amount of $15,000,000.00 is appropriated from the
12 General Fund to the Department of Housing and Community Development for
13 the Vermont Rental Housing Improvement Program.
14 * * * Missing Middle-Income Homeownership
15 Development Pilot Program * * *
16 Sec. 3. 2022 Acts and Resolves No. 182, Sec. 11 is amended to read:
17 Sec. 11. MISSING MIDDLE-INCOME HOMEOWNERSHIP
18 DEVELOPMENT PILOT PROGRAM
19 (a) The following amounts are appropriated from the America Rescue Plan
20 Act (ARPA) – Coronavirus State Fiscal Recovery Funds to the Department of
21 Housing and Community Development to grant to the Vermont Housing VT LEG #365357 v.9
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1 Finance Agency to establish the Missing Middle-Income Homeownership
2 Development Pilot Program:
3 (1) $5,000,000.00 in fiscal year 2022; and
4 (2) $10,000,000.00 in fiscal year 2023.
5 (b) As used in this section:
6 (1) “Affordable owner-occupied housing” means owner-occupied
7 housing identified in 26 U.S.C. § 143(c)(1) or that qualifies under Vermont
8 Housing Finance Agency criteria governing owner-occupied housing.
9 (2) “Income-eligible homebuyer” means a Vermont household with
10 annual income that does not exceed 120 percent of area median income.
11 (c) The Agency shall use the funds appropriated in this section to provide
12 subsidies for new construction or acquisition and substantial rehabilitation of
13 affordable owner-occupied housing for purchase by income-eligible
14 homebuyers.
15 (d) The total amount of subsidies for a project shall not exceed 35 percent
16 of eligible development costs, as determined by the Agency, which the Agency
17 may allocate consistent with the following:
18 (1) Developer subsidy. The Agency may provide a direct subsidy to the
19 developer, which shall not exceed the difference between the cost of
20 development and the market value of the home as completed.
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1 (2) Affordability subsidy. Of any remaining amounts available for the
2 project after the developer subsidy, the Agency may provide a subsidy for the
3 benefit of the homebuyer to reduce the cost of purchasing the home, provided
4 that:
5 (A) the Agency includes conditions in the