Bill Summary – FastDemocracy

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                                      H.829
    An act relating to long-term housing solutions
 It is hereby enacted by the General Assembly of the State of Vermont:
                          * * * Housing Programs * * *
 Sec. 1. LEGISLATIVE INTENT; HOUSING INVESTMENT
    (a) Legislative intent. It is the intent of the General Assembly that, as
 funds are available, approximately $900,000,000.00 will be appropriated from
 the General Fund over fiscal years 2026 through 2034 to fund programs that
 advance a long-term solution to Vermont’s housing shortage. These funds will
 support programs that reach a broad spectrum of Vermont residents, including
 low-income and middle-income Vermonters, families and individuals
 experiencing homelessness, individuals with disabilities, older Vermonters,
 individuals in recovery, farmworkers, individuals facing eviction, and
 Vermonters living in substandard housing. Through sustained funding and
 annual investments, the General Assembly intends to implement this
 comprehensive and strategic housing plan that yields permanent affordable
 housing for Vermonters and for communities in all 14 counties.
    (b) Programs. Funds appropriated consistent with subsection (a) of this
 section shall include:
       (1) the Vermont Housing and Conservation Board’s programs:
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          (A) to provide support and enhance capacity for the production and
 preservation of affordable rental housing and homeownership units, including
 support for manufactured home communities, permanent homes for those
 experiencing homelessness, recovery residences, and housing available to farm
 workers, refugees, or individuals with disabilities who are eligible to receive
 Medicaid-funded home and community based services;
          (B) to fund the construction and preservation of emergency shelter
 for households experiencing homelessness; and
          (C) to fund permanent supportive housing;
       (2) the Vermont Housing Improvement Program;
       (3) the Land Access and Opportunity Board;
       (4) the State Refugee Office;
       (5) the Resident Services Program;
       (6) the Middle-Income Homeownership Development Program;
       (7) the Manufactured Home Improvement and Repair Program;
       (8) the Office of Economic Opportunity; and
       (9) eviction prevention initiatives.
    (c) Additional funding. In addition to the appropriations in subsection (a)
 of this section, it is the intent of the General Assembly to support funding for
 temporary emergency housing until such time as is no longer necessary.
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 Sec. 1a. 10 V.S.A. § 322 is amended to read:
 § 322. ALLOCATION SYSTEM
    (a) In determining the allocation of funds available for the purposes of this
 chapter, the Board shall give priority to projects that combine the dual goals of
 creating affordable housing and conserving and protecting Vermont’s
 agricultural land, historic properties, important natural areas or recreation lands
 and also shall consider, but not be limited to, the following factors:
       (1) the need to maintain balance between the dual goals in allocating
 resources;
       (2) the need for a timely response to unpredictable circumstances or
 special opportunities to serve the purposes of this chapter;
       (3) the level of funding or other participation by private or public
 sources in the activity being considered for funding by the Board;
       (4) what resources will be required in the future to sustain the project;
       (5) the need to pursue the goals of this chapter without displacing lower
 income Vermonters;
       (6) the long-term effect of a proposed activity and, with respect to
 affordable housing, the likelihood that the activity will prevent the loss of
 subsidized housing units and will be of perpetual duration;
       (7) geographic distribution of funds; and
       (8) the need to timely address Vermont’s affordable housing crisis.
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    (b) The Board’s allocation system shall include a method, defined by rule,
 that evaluates the need for, impact, and quality of activities proposed by
 applicants.
 Sec. 2. 10 V.S.A. § 699 is amended to read:
 § 699. VERMONT RENTAL HOUSING IMPROVEMENT PROGRAM
    (a) Creation of Program.
       (1) The Department of Housing and Community Development shall
 design and implement the Vermont Rental Housing Improvement Program,
 through which the Department shall award funding to statewide or regional
 nonprofit housing organizations, or both, to provide competitive grants and
 forgivable loans to private landlords for the rehabilitation, including
 weatherization and accessibility improvements, of eligible rental housing units.
       (2) The Department shall develop statewide standards for the Program,
 including factors that partner organizations shall use to evaluate applications
 and award grants and forgivable loans.
       (3) A landlord shall not offer a unit created through the Program as a
 short-term rental, as defined in 18 V.S.A. § 4301, for the period a grant or loan
 agreement is in effect.
       (4) The Department may utilize a reasonable percentage, up to a cap of
 five percent, of appropriations made to the Department for the Program to
 administer the Program.
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         (5) The Department may cooperate with and subgrant funds to State
 agencies and governmental subdivisions and public and private organizations
 in order to carry out the purposes of this subsection.
    (b) Eligible rental housing units. The following units are eligible for a
 grant or forgivable loan through the Program:
         (1) Non-code compliant.
           (A) The unit is an existing unit, whether or not occupied, that does
 not comply with the requirements of applicable building, housing, or health
 laws.
           (B) If the unit is occupied, the grant or forgivable loan agreement
 shall include terms:
                                        ***
    (d) Program requirements applicable to grants and forgivable loans.
         (1)(A) A grant or loan shall not exceed:
              (i) $70,000.00 per unit, for rehabilitation or creation of an eligible
 rental housing unit meeting the applicable building accessibility requirements
 under the Vermont Access Rules; or
              (ii) $50,000.00 per unit, for rehabilitation or creation of any other
 eligible rental housing unit.
           (B) In determining the amount of a grant or loan, a housing
 organization shall consider the number of bedrooms in the unit and, whether VT LEG #376003 v.1
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 the unit is being rehabilitated or newly created, whether the project includes
 accessibility improvements, and whether the unit is being converted from
 nonresidential to residential purposes.
         (2) A landlord shall contribute matching funds or in-kind services that
 equal or exceed 20 percent of the value of the grant or loan.
         (3) A project may include a weatherization component.
         (4) A project shall comply with applicable building, housing, and health
 laws.
         (5) The terms and conditions of a grant or loan agreement apply to the
 original recipient and to a successor in interest for the period the grant or loan
 agreement is in effect.
         (6) The identity of a recipient and, the amount of a grant or forgivable
 loan, the year in which the grant or forgivable loan was extended, and the year
 in which any affordability covenant ends are public records that shall be
 available for public copying and inspection and the Department shall publish
 this information at least quarterly on its website.
         (7) A project for rehabilitation or creation of an accessible unit may
 apply funds to the creation of a parking spot for individuals with disabilities.
    (e) Program requirements applicable to grants and five-year forgivable
 loans. For a grant or five-year forgivable loan awarded through the Program,
 the following requirements apply for a minimum period of five years:
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       (1) A landlord shall coordinate with nonprofit housing partners and local
 coordinated entry organizations to identify potential tenants.
       (2)(A) Except as provided in subdivision (2)(B) of this subsection (e), a
 landlord shall lease the unit to a household that is:
              (i) exiting homelessness, including any individual under 25 years
 of age who secures housing through a master lease held by a youth service
 provider on behalf of individuals under 25 years of age; or
              (ii) actively working with an immigrant or refugee resettlement
 program.; or
              (iii) composed of at least one individual with a disability who is
 eligible to receive Medicaid-funded home and community based services.
          (B) If, upon petition of the landlord, the Department or the housing
 organization that issued the grant determines that a household exiting
 homelessness under subdivision (2)(A) of this subsection (e) is not available to
 lease the unit, then the landlord shall lease the unit:
              (i) to a household with an income equal to or less than 80 percent
 of area median income; or
              (ii) if such a household is unavailable, to another household with
 the approval of the Department or housing organization.
       (3)(A) A landlord shall accept any housing vouchers that are available to
 pay all, or a portion of, the tenant’s rent and utilities.
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             (B) If no housing voucher or federal or State subsidy is available, the
 total cost of rent for the unit, including utilities not covered by rent payments,
 shall not exceed the applicable fair market rent established by the Department
 of Housing and Urban Development.
          (4)(A) A landlord may convert a grant to a forgivable loan upon
 approval of the Department and the housing organization that approved the
 grant.
             (B) A landlord who converts a grant to a forgivable loan shall receive
 a 10-percent prorated credit for loan forgiveness for each year in which the
 landlord participates in the grant program Program.
    (f) Requirements applicable to 10-year forgivable loans. For a 10-year
 forgivable loan awarded through the Program, the following requirements
 apply for a minimum period of 10 years:
          (1) A landlord shall coordinate with nonprofit housing partners and local
 coordinated entry organizations to identify potential tenants.
          (2)(A) Except as provided in subdivision (2)(B) of this subsection (f), a
 landlord shall lease the unit to a household that is:
                (i) exiting homelessness, including any individual under 25 years
 of age who secures housing through a master lease held by a youth service
 provider on behalf of individuals under 25 years of age;
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               (ii) actively working with an immigrant or refugee resettlement
 program; or
               (iii) composed of at least one individual with a disability who is
 eligible to receive Medicaid-funded home and community based services.
          (B) If, upon petition of the landlord, the Department or the housing
 organization that issued the grant determines that a household under
 subdivision (2)(A) of this subsection (f) is not available to lease the unit, then
 the landlord shall lease the unit:
               (i) to a household with an income equal to or less than 80 percent
 of area median income; or
               (ii) if such a household is unavailable, to another household with
 the approval of the Department or housing organization.
       (3)(A) A landlord shall accept any housing vouchers that are available to
 pay all, or a portion of, the tenant’s rent and utilities.
          (B) If no housing voucher or federal or State subsidy is available, the
 cost of rent for the unit, including utilities not covered by rent payments, shall
 not exceed the applicable fair market rent established by the Department of
 Housing and Urban Development.
       (2)(4) The Department shall forgive 10 percent of the amount of a
 forgivable loan for each year a landlord participates in the loan program.
                                          ***
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 Sec. 3. APPROPRIATION; VERMONT RENTAL HOUSING
          IMPROVEMENT PROGRAM
    The sum of $1,000,000.00 is appropriated from the General Fund to the
 Department of Housing and Community Development in fiscal year 2025 for
 the Vermont Rental Housing Improvement Program established in 10 V.S.A.
 § 699.
 Sec. 4. 2023 Acts and Resolves No. 47, Sec. 36 is amended to read:
    Sec. 36. MIDDLE-INCOME HOMEOWNERSHIP DEVELOPMENT
             PROGRAM
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    (d) The total amount of subsidies for a project shall not exceed 35 percent
 of eligible development costs, as determined by the Agency, which the at the
 time of approval of the project, unless the Agency later determines that the
 project will not result in affordable owner-occupied housing for income-
 eligible homebuyers without additional subsidy, in which case the Agency
 may, at its discretion, reasonably exceed this limitation and only to the extent
 required to achieve affordable owner-occupied housing. The Agency may
 shall allocate subsidies consistent with the following:
       (1) Developer subsidy. The Agency may provide a direct subsidy to the
 developer, which shall not exceed the difference between the cost of
 development and the market value of the home as completed.
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         (2) Affordability subsidy. Of any remaining amounts available for the
 project after the developer subsidy, the Agency may provide a subsidy for the
 benefit of the homebuyer to reduce the cost of purchasing the home, provided
 that:
            (A) the Agency includes conditions in the subsidy, agreement or uses
 another legal mechanism, to ensure that, to the extent the home value has risen,
 the amount of the subsidy upon sale of the home, to the extent proceeds are
 available, the amount of the affordability subsidy either:
               (i) remains with the home to offset the cost to future homebuyers;
 or
               (ii) is recaptured by the Agency upon sale of the home for use in a
 similar program to support affordable homeownership development; or
            (B) the subsidy is subject to a housing subsidy covenant, as defined
 in 27 V.S.A. § 610, that preserves the affordability of the home for a period of
 99 years or longer.
         (3) The Agency shall allocate not less than 33 percent of the funds
 available through the Program to projects that include a housing subsidy
 covenant consistent with subdivision (2)(B) of this subsection.
                                          ***
      (f)(1) When implementing the Program, the Agency shall consult
 stakeholders and experts in the field.
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