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No surprises: Census says houses, rents expensive
by Matt Sutkowski
Free Press Staff Writer

The U.S. Census Bureau confirmed what Vermont housing experts and advocates have been telling us for years: Home prices skyrocketed in the first half of this decade, and housing costs ate bigger and bigger bites out of many Vermonters' budgets.

Overall, Vermont's home cost data are similar to the national average.

The Census data, released last week and contained in an ongoing analysis called the American Community Survey, found these trends:

Housing cost inflation in Vermont outpaced the national average. In 2002 and 2003, Vermont's median home price was slightly below the national median. In 2004 and 2005 housing costs in Vermont on average exceeded the national median.

The proportion of Vermonters spending more than 30 percent of their income on housing costs continues to creep upward, from 28.7 percent in 2003 to 33.3 percent in 2005. The figures roughly mirrored national averages.

The data confirm the widely reported fact that housing prices soared. The median home price in Vermont went from $111,500 in 2000 to $173,400 in 2005.

On a bright note, the proportion of Vermonters who own homes is higher than the national mean, and renters write slightly smaller checks to landlords than the nation as a whole.

Recent homebuyers said they don't need Census data to tell them it's hard to afford a home in Vermont. Many of them say they scrimped and saved to purchase a house, and scaled back their leisure activities to make sure they can make mortgage payments every month. Still, they have no regrets about buying a house.

"It provides stability for us in a community. That's what we really want," said Peg Rosenau, who lives in a Shelburne home she recently moved into with her husband, Paul, daughter, Emily, 6, and son, Theo, 7 months. "We have children. It provides a sense of community for them. It's within a planned community and we're within walking distance to the village, the school and library," Rosenau said.

Rosenau said the family was initially discouraged about finding an affordable house in Vermont. The family turned to the Chittenden County NeighborWorks HomeOwnership Center for help. The organization steered the Rosenaus toward a home they ultimately moved into in a land trust development in Shelburne.

Demand for programs such as Vermont Housing Finance Agency loans, land trust deals and other mortgage programs for low- and middle-income homebuyers remains strong, said Emily Higgins, the deputy director of homeownership at Champlain Housing Trust.

There's evidence the housing market started cooling in the months after the Census analyzed housing costs, but most of the softening in home prices is in the high-end market, Higgins said.

Jeffrey and Kate Guilmette said they were lucky to find an affordable home this year in Williston. It needed a lot of work, including a new roof and repairs to interior water damage. Guilmette said he also wants to repaint the home, which is now "Smurf blue," he said.

Like many new homeowners, the Guilmettes are watching pennies, doing much of the repair work themselves, forgoing restaurants, vacations and movie theaters. Guilmette said the state of affairs is much better than living in an apartment.

"We paid rent for so long. Now, it feels like our money is going toward something we're going to own," he said.

The Census data showed that renters have it at least as tough as homeowners. Rent and other housing costs for apartment dwellers in Vermont averaged $683 in 2005, a little lower than the national average. Nearly half of all renters devote close to 30 percent of their income to housing expenses, the data concluded.

State, federal and private money has helped encourage a spurt of aggressive apartment construction and renovation in Vermont, slightly improving the supply of rental housing, said Kenn Sassorossi, the vice president of asset management and partner relations at Housing Vermont.

The supply is still inadequate, he said. "Nationally, there needs to be a return to the day where there was a national program to create affordable rental housing. Congress has not been receptive to the need and solution," Sassorossi said.

Renters seemed to have a tougher time than homeowners in recent years, said University of Vermont economics Professor Arthur Woolf, who is analyzing the new Census data. The percentage of income devoted to housing that homeowners spent drifted down slightly between 2000 and 2005, Woolf said, but the percentage income renters pay for housing rose by 6 percentage points to 32 percent in the five-year period, he said.

"Part of that is we just don't build a lot of rental properties in Vermont," Woolf said. A limited supply means higher prices.

Overall, the new Census data do not paint a dire picture, Woolf said. Housing prices indeed rose sharply, but that was offset by low mortgage rates, he said. Although housing is expensive, the Census data show Vermont is doing no worse than most of the rest of the country, he said. Many people consider Vermont rents expensive, but it's worse in several other parts of the country, according to the Census.

"What it shows is in general, we're kind of average," Woolf said.

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