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1 H.367
2 Introduced by Representatives Sibilia of Dover, Sims of Craftsbury, Hango of
3 Berkshire, Priestley of Bradford, Andriano of Orwell, Anthony
4 of Barre City, Austin of Colchester, Boyden of Cambridge,
5 Burrows of West Windsor, Buss of Woodstock, Campbell of St.
6 Johnsbury, Chapin of East Montpelier, Demrow of Corinth,
7 Farlice-Rubio of Barnet, Gregoire of Fairfield, Harrison of
8 Chittenden, LaBounty of Lyndon, Leavitt of Grand Isle, Lipsky
9 of Stowe, McGill of Bridport, Morgan of Milton, Nicoll of
10 Ludlow, Noyes of Wolcott, O'Brien of Tunbridge, Pajala of
11 Londonderry, Roberts of Halifax, Surprenant of Barnard, Taylor
12 of Milton, Templeman of Brownington, Torre of Moretown,
13 White of Bethel, Williams of Barre City, and Williams of
14 Granby
15 Referred to Committee on
16 Date:
17 Subject: Commerce and trade; rural economic development
18 Statement of purpose of bill as introduced: This bill proposes to adopt
19 miscellaneous provisions to support rural economic development,
20 administrative capacity, and vitality.
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1 An act relating to promoting economic development, administrative
2 capacity, and vitality in rural communities
3 It is hereby enacted by the General Assembly of the State of Vermont:
4 * * * Vermont Rental Housing Improvement Program * * *
5 Sec. 1. 10 V.S.A. § 699 is amended to read:
6 § 699. VERMONT RENTAL HOUSING IMPROVEMENT PROGRAM
7 (a) Creation of Program.
8 (1) The Department of Housing and Community Development shall
9 design and implement the Vermont Rental Housing Improvement Program,
10 through which the Department shall award funding to statewide or regional
11 nonprofit housing organizations, or both, to provide competitive grants and
12 forgivable loans to private landlords for the rehabilitation, including
13 weatherization, of eligible rental housing units.
14 (2) The Department shall develop statewide standards for the Program,
15 including factors that partner organizations shall use to evaluate applications
16 and award grants and forgivable loans.
17 (b) Eligible rental housing units. The following units are eligible for a
18 grant or forgivable loan through the Program:
19 (1) Non-code compliant Non-code-compliant. The unit does not comply
20 with the requirements of applicable building, housing, or health laws and:
21 (A) the unit has been unoccupied for not less than 90 days prior to the
22 date of application; or VT LEG #367259 v.1
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1 (B) the landlord agrees to antidisplacement measures developed by
2 the Department.
3 (2) New accessory dwelling unit. The unit will be a newly created
4 accessory dwelling unit that meets the requirements of 24 V.S.A. § 4412(1)(E).
5 The unit may be created within an existing structure or may be a new, or part
6 of a new, structure built on the existing parcel.
7 (3) New dwelling unit. The unit will be a newly created dwelling unit.
8 The unit may be created within an existing structure or may be a new, or part
9 of a new, structure built on an existing parcel.
10 (c) Administration.
11 (1) The Department shall require a housing organization that receives
12 funding under the Program to adopt:
13 (1)(A) a standard application form that describes the application
14 process and includes instructions and examples to help landlords apply;
15 (2)(B) an award process that ensures equitable selection of landlords,
16 subject to a housing organization’s exercise of discretion based on the factors
17 adopted by the Department pursuant to subsection (a) of this section; and
18 (3)(C) a grant and loan management system that ensures
19 accountability for funds awarded.
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1 (2) A housing organization that receives funding under the Program may
2 use a portion of the funding for reasonable administrative expenses, as
3 determined by the Department.
4 (d) General Program requirements applicable to grants and forgivable
5 loans.
6 (1) A grant or loan shall not exceed $50,000.00 per unit. In determining
7 the amount of a grant or loan, a housing organization shall consider the number
8 of bedrooms in the unit and whether the unit is being rehabilitated or newly
9 created.
10 (2) A landlord shall contribute matching funds or in-kind services that
11 equal or exceed 20 percent of the value of the grant or loan.
12 (3) A project may include a weatherization component.
13 (4) A project shall comply with applicable building, housing, and health
14 laws.
15 (5) The terms and conditions of a grant or loan agreement apply to the
16 original recipient and to a successor in interest for the period the grant or loan
17 agreement is in effect.
18 (6) The identity of a recipient and the amount of a grant or forgivable
19 loan are public records that shall be available for public copying and inspection
20 and the Department shall publish this information at least quarterly on its
21 website.
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1 (7) A landlord shall not offer a unit assisted through the Program as a
2 short-term rental as defined in 18 V.S.A. § 4301.
3 (8)(A) In a project with multiple new dwelling units, not more than five
4 units are eligible for Program funding.
5 (B) The Department may adopt additional Program parameters to
6 ensure a wide distribution of units among developers and geographic areas.
7 (9) The Department or housing organization shall use amounts that are
8 repaid or recaptured to provide additional grants or loans under the Program.
9 (e) Program requirements applicable to grants for new or non-code-
10 compliant units. For a grant awarded under subdivision (b)(1) or (b)(3) of this
11 section for a unit that is non-code compliant non-code-compliant or a new
12 dwelling unit, the following requirements apply for a minimum period of five
13 years:
14 (1)(A) A landlord shall coordinate with nonprofit housing partners and,
15 local coordinated entry organizations, or other similar organizations as
16 determined by the Department to identify potential tenants qualifying
17 households.
18 (B) As used in this subsection (e), “qualifying household” means a
19 household that is:
20 (i) exiting homelessness or in need of resettlement; and VT LEG #367259 v.1
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1 (ii) referred by a local coordinated entry organization, refugee
2 resettlement program, or another similar organization or program approved by
3 the Department.
4 (2)(A) Except as provided in subdivision (2)(B) of this subsection (e), a
5 landlord shall lease the unit to a qualifying household that is exiting
6 homelessness or actively working with an immigrant or refugee resettlement
7 program.
8 (B) If, upon petition of the landlord, the Department or the housing
9 partner or organization that issued the grant determines that a qualifying
10 household exiting homelessness is not available to lease the unit, then the
11 landlord shall lease the unit:
12 (i) to a household with an income equal to or less than 80 percent
13 of area median income; or
14 (ii) if such a household is unavailable, to another household with
15 the approval of the Department or housing organization at or below the
16 applicable fair market rent, including utilities not covered by rent payments, as
17 established by the U.S. Department of Housing and Urban Development.
18 (3)(A)(C) A landlord shall accept any housing vouchers that are
19 available to pay all, or a portion of, the tenant’s rent and utilities.
20 (B) If no housing voucher or federal or State subsidy is available, the
21 total cost of rent for the unit, including utilities not covered by rent payments,
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1 shall not exceed the applicable fair market rent established by the Department
2 of Housing and Urban Development.
3 (4)(A) A landlord may convert a grant to a forgivable loan upon approval
4 of the Department and the housing organization that approved the grant.
5 (B) A landlord who converts a grant to a forgivable loan shall receive
6 a 10-percent credit for loan forgiveness for each year in which the landlord
7 participates in the grant program.
8 (f) Requirements applicable to forgivable loans for new or non-code-
9 compliant units. For a forgivable loan awarded under subdivision (b)(1) or
10 (b)(3) of this section for a unit that is non-code compliant new or non-code-
11 compliant, the following requirements apply for a minimum period of 10
12 years:
13 (1)(A) A landlord shall accept any housing vouchers that are available to
14 pay all, or a portion of, the tenant’s rent and utilities.
15 (B) If no housing voucher or federal or State subsidy is available, the
16 cost of rent for the unit, including utilities not covered by rent payments, shall
17 not exceed the applicable fair market rent established by the Department of
18 Housing and Urban Development.
19 (2) The Department shall forgive 10 percent of the amount of a
20 forgivable loan for each year a landlord participates in the loan program.
21 (g) Requirements for an accessory dwelling unit.
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1 (1) For a grant or forgivable loan awarded under subdivision (b)(2) of
2 this section for a unit that is a new accessory dwelling unit, for a minimum
3 period of five years, the total cost of rent for the unit, including utilities not
4 covered by rent payments, shall not exceed the applicable fair market rent
5 established by the Department of Housing and Urban Development.
6 (2) A landlord shall not offer an accessory dwelling unit created through
7 the Program as a short-term rental, as defined in 18 V.S.A. § 4301.
8 (h) Lien priority. A lien for a grant converted to a loan or for a forgivable
9 loan issued pursuant to this section is subordinate to:
10 (1) a lien on the property in existence at the time the lien for
11 rehabilitation and weatherization of the rental housing unit is filed in the land
12 records; and
13 (2) a first mortgage on the property that is refinanced and recorded after
14 the lien for rehabilitation and weatherization of the rental housing unit is filed
15 in the land records.
16 (i) Loan conversion.
17 (1) A landlord may convert a grant to a forgivable loan upon approval of
18 the Department and the housing organization that approved the grant.
19 (2) A landlord who converts a grant to a forgivable loan shall receive a
20 10 percent credit for loan forgiveness for each year in which the landlord
21 participates in the grant program.
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1 Sec. 2. VHIP; APPROPRIATION
2 In fiscal year 2024, the amount of $15,000,000.00 is appropriated from the
3 General Fund to the Department of Housing and Community Development for
4 the Vermont Rental Housing Improvement Program.
5 * * * Missing Middle-Income Homeownership
6 Development Pilot Program * * *
7 Sec. 3. 2022 Acts and Resolves No. 182, Sec. 11 is amended to read:
8 Sec. 11. MISSING MIDDLE-INCOME HOMEOWNERSHIP
9 DEVELOPMENT PILOT PROGRAM
10 (a) The following amounts are appropriated from the America Rescue Plan
11 Act (ARPA) – Coronavirus State Fiscal Recovery Funds to the Department of
12 Housing and Community Development to grant to the Vermont Housing
13 Finance Agency to establish the Missing Middle-Income Homeownership
14 Development Pilot Program:
15 (1) $5,000,000.00 in fiscal year 2022; and
16 (2) $10,000,000.00 in fiscal year 2023.
17 (b) As used in this section:
18 (1) “Affordable owner-occupied housing” means owner-occupied
19 housing identified in 26 U.S.C. § 143(c)(1) or that qualifies under Vermont
20 Housing Finance Agency criteria governing owner-occupied housing.
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1 (2) “Income-eligible homebuyer” means a Vermont household with
2 annual income that does not exceed 120 percent of area median income.
3 (c) The Agency shall use the funds appropriated in this section to provide
4 subsidies for new construction or acquisition and substantial rehabilitation of
5 affordable owner-occupied housing for purchase by income-eligible
6 homebuyers.
7 (d) The total amount of subsidies for a project shall not exceed 35 percent
8 of eligible development costs, as determined by the Agency, which the Agency
9 may allocate consistent with the following:
10 (1) Developer subsidy. The Agency may provide a direct subsidy to the
11 developer, which shall not exceed the difference between the cost of
12 development and the market value of the home as completed.
13 (2) Affordability subsidy. Of any remaining amounts available for the
14 project after the developer subsidy, the Agency may provide a subsidy for the
15 benefit of the homebuyer to reduce the cost of purchasing the home, provided
16 that:
17 (A) the Agency includes conditions in the subsidy, or uses another
18 legal mechanism, to ensure that, to the extent the home value has risen, the
19 amount of the subsidy remains with the home to offset the cost to future
20 homebuyers; or VT LEG #367259 v.1
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1 (B) the subsidy is subject to a housing subsidy covenant, as defined
2 in 27 V.S.A. § 610, that preserves the affordability of the home for a period of
3 99 years or longer.
4 (3) Allocation. The Agency shall allocate not less than 33 percent of the
5 funds available through the Program to projects that include a housing subsidy
6 covenant consistent with subdivision (2)(B) of this subsection.
7 (e) The Agency shall adopt a Program plan that establishes application and
8 selection criteria, including:
9 (1) project location;
10 (2) geographic distribution, including in communities that score 50 or
11 higher on the Vermont Underserved Communities Index developed by the
12 Agency of Administration;
13 (3) leveraging of other programs;
14 (4) housing market needs;
15 (5) project characteristics, including whether the project includes the use
16 of existing housing as part of a community revitalization plan;
17 (6) construction standards, including considerations for size;
18 (7) priority for plans with deeper affordability and longer duration of
19 affordability requirements;
20 (8) sponsor characteristics;
21 (9) energy efficiency of the development; and VT LEG #367259 v.1
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1 (10) historic nature of the project.
2 (f)(1) When designing and implementing the Program, the Agency shall
3 consult experts in the field and stakeholders to inform the design of the
4 Program.
5 (2) The Program shall include a streamlined and minimal application
6 process for applicants to apply.
7 (3) The Program design shall establish:
8 (A) an outreach and education plan including specific tactics to reach
9