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Building our way out of a housing shortage
by Matt Sutkoski
Free Press Staff Writer

The law of supply and demand is contributing to housing prices that are keeping many moderate-income Vermonters from home ownership.

One way to fix the problem is to increase supply, but in Chittenden County, with a relative lack of land ripe for development, that could be tricky. The Chittenden County Regional Planning Commission took a crack at the issue anyway, setting general targets on how many homes, and how many affordable homes, should be built in each municipality through 2010.

The targets — not quotas — are nonbinding. Some communities, with the sewage capacity, appropriate zoning and willing developers in place, will find it easy to meet the planning goals. Other communities might have trouble meeting the targets.

The main goal of the targets was to get municipalities thinking about housing, said Tim Fluck of the commission. If a goal is in place, communities can work to achieve that goal, he said. The targets cover the 10 years ending 2010. Some communities, notably South Burlington, already have built a substantial portion of the projected houses.

South Burlington City Council Chairman Jim Condos said nobody wants entire communities completely covered by dense, multistory housing projects, but he said his city has learned that high-density development works in certain neighborhoods. And contrary to popular opinion, Condos said, an influx of new residents does not cause an overwhelming increase in the costs of services.

Those costs are largely made up for by property taxes from the new homeowners and the impact fees developers pay, he said. Impact fees are paid to towns to help offset the cost of new items made necessary by the development, such as roads, sidewalks and new school buildings. The fees can't go toward operating expenses, like snowplowing or teachers' wages.

Some Chittenden County towns might have difficulty achieving the targets. In Williston, the planning study targets 1,093 new homes, but a lack of sewage capacity for new construction means the town will likely fall short, said Town Manager Rick McGuire.

Other communities are using the targets as a springboard for more housing discussions. Colchester has its own housing consultants that expect to release their own recommendations next month, said Sarah Hadd, the town's planner.

The town hopes to look beyond the number of houses Colchester needs and examine the types of homes. For instance, some residents said the town needs more housing for the elderly, and starter homes for young families, Hadd said.

Essex Selectboard Chairman Tom James, who served on the committee that created the goals, said his town's selectboard had quibbles with some aspects of the report, such as counting dormitories as housing. "But the board thought it was a good thing to have done. I thought it was a good starting point," James said.

No matter what the towns do, it'll probably be hard to overcome the region's housing shortage. Not only Vermonters are seeking homes; so are people from elsewhere. "We are becoming a magnet for investment and speculation. When money flows into a market, that market goes up. Money is flowing into Vermont's housing market. Some of it is from out of state and that's pushing housing prices," said John Fairbanks of the Vermont Housing Finance Agency.

Rising interest rates won't cause home prices to fall, said Mark Brooks of the real estate consulting firm Allen & Brooks. "I don't think housing prices will deflate. The rate of increase will slow down. Prices might plateau for a period of time," he said. "There's still a lot of demand for housing," he said.

Contact Matt Sutkoski at 660-1846 or msutkosk@bfp.burlingtonfreepress.com