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HOUSING COSTS STILL OUTPACE WAGES IN VERMONT

MONTPELIER - The cost of housing in Vermont continues to outrun people's incomes, according to a report released today by the Housing Council and the Vermont Housing Awareness Campaign.

The report found that despite historically low interest rates, the dream of first-time homeownership is fading for many Vermonters as modest income gains have not kept pace with the soaring costs of housing. Over the last six years alone, home prices in Vermont have risen by fully 36 percent.

Rents have increased by 25% over the same period of time, which means more renter households in Vermont are also finding it harder to keep a roof over their heads without paying a disproportionate amount of their earnings for housing. More than two-thirds of the jobs in Vermont-including essential jobs like firefighter, EMT, and child care worker-pay less than $13.58 an hour, which is the income needed to pay the rent on a typical two-bedroom apartment without having to pay more than 30% of household earnings for housing.

The continued shortage of new housing development is the major reason for the growing gap.

"The law of supply and demand is still in effect, said John Hall, Commissioner of Housing and Community Affairs and Chair of the Housing Council. "A shortage of good housing drives up the price of housing. The shortage of good jobs holds down wages and limits what families can afford to pay. The challenge we must address is how to create more housing and more jobs.

"In some parts of Vermont, like the Northeast Kingdom, where I come from, we have housing available, but some of it is not in good shape and would require a lot of fixing up. Better jobs would give families the means to renovate their homes or pay higher rents that would allow landlords to improve the quality of rental stock."

The report, which updates key findings of a previous study released in 2002, uses new data from the U.S. Census, the U.S. Department of Housing and Urban Development, the Vermont Department of Taxes and the Vermont Department of Employment Security.

"We clearly need to do a better job building housing, particularly at the lower end of the price range," said Rep. Steven Larrabee, R-Danville, who chairs the House General, Housing and Military Affairs Committee. "Housing prices are hurting our people, and they're hurting our state's economy. The biggest impediment to building affordable housing is the time-consuming and unpredictable state permitting processes. One thing we can do at the state level is to look at the various state permitting processes and see how we can make them simpler and more predictable."

The new report cited several reasons for the slow pace of housing construction, including local opposition to housing development, uncertainties in the local permitting process, and town zoning policies that allow residential development only in the form of single-family homes on large, multi-acre lots. These and other factors have discouraged developers from building moderately-priced housing, particularly rental housing.

"There is no single, "silver-bullet" answer to this problem," said Rep. Johannah Leddy Donovan, D-Burlington, who serves on Larrabee's committee. "We in the legislature can provide tools, and, to the extent possible, funding. But it is clear we need to do a lot of work at the local level to create an environment that supports more housing development. Several Vermont communities have shown leadership on this, and more towns need to follow their examples."

Dan French, Housing Specialist with the Upper Valley Housing Coalition in White River Junction, agreed Vermont's housing shortage has a big impact on local economies, and that local leadership is needed to address the problem.

"Employers on both sides of the Connecticut River know that a housing shortage hurts their businesses," French said. "When people can't find housing they can afford, then businesses have trouble filling jobs, which is a big obstacle to companies' staying competitive. That's why housing has to be a part of any economic planning, and why local leadership, like we've seen in the Upper Valley and other Vermont communities, is key to solving this problem."

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Contact: info@housingawareness.org