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HOME SWEET — AND INCREASINGLY EXPENSIVE — HOME
Housing costs continue rising as affordable housing construction
lags behind demand

MONTPELIER—Vermont’s housing shortage, which is pushing up rents and home prices faster than Vermonters’ incomes, is still presenting a major problem for Vermonters, their families and the state as a whole, and federal budget cuts are going to make the situation worse, according to a new report released today by the Housing Council and the Vermont Housing Awareness Campaign.

“This is a persistent problem, a serious problem and it’s everyone’s problem,” said John Fairbanks, of the Vermont Housing Finance Agency. “If you’re a young couple trying to buy a first home, if you’re an EMT making $22,000 a year trying to pay the rent, if you’re an employer trying to hire new workers, if you’re worried about your property taxes going up because your town is losing people, Vermont’s affordable housing shortage is a problem.”

The report, “Between a Rock and a Hard Place,” tracks the gap between housing costs and wages in Vermont. That gap continues to grow, and more affordable housing development is needed to take some of the upward pressure off housing costs.

Rep. Lucy Leriche (D-Caledonia 2), added that one of the obstacles to housing development is local opposition, which is often the product of a lack of understanding of what affordable housing is and who needs it.

“This is your sister, your neighbor, the guy who checked you out at the grocery store, the local police officer,” Leriche said. “We’re going to have to work together as a community to solve this problem, and local officials need to create incentives to encourage affordable housing.”

The solution, according to the report, is more development of affordable housing.

Some of the report’s findings include:

• The median purchase price for a home in Vermont reached $165,000 in 2004, a 67 percent increase since 1996 and a 10 percent jump from 2003.
• To purchase that median-priced home, a Vermont household would have to earn more than $62,000 annually. The median annual Vermont household income is just over $43,000. A household with that income could afford a $114,600 home.
• For new homes, prices are much higher. The median price for newly-constructed single-family homes and condominiums in Vermont in 2004 was $294,000, an 11 percent jump from 2003.
• Analysis of available real estate sales data for 2004 did not find a single new home sold that was affordable to a household earning Vermont’s median income.
• The average Fair Market Rent for a modest, 2-bedroom apartment in Vermont was $698 in 2004, a 24 percent increase since 1996.
• A Vermont household would need to earn $13.42 per hour, or $27,914 a year, to afford that Fair Market Rent. Fifty-seven percent of Vermont’s workforce is employed in jobs whose median wage is less than that.
• Over the last three years, an average of 4,000 Vermonters—one-fourth of them children—have relied on emergency shelters for housing.

Melinda Bussino, Executve Director of the Brattleboro Area Drop-in Center, said many homeless Vermonters are working full-time, but they don’t make enough to afford decent shelter. Because of the housing shortage, Bussino said, people who might have stayed in a shelter for a few days may now spend weeks there.

“These are workers and taxpayers,” Bussino said. “I know a 40-year-old woman who was living in a tent by the river. She was working full-time in a fast-food restaurant, and she got off work at 2 in the morning. When she left work, she had to walk half a mile in December weather to a tent by the river.”

The report also noted that a lack of affordable housing acts as a drag on Vermont’s economy, but housing development serves as an economic stimulus.

“As we grow jobs in this state, we need to grow housing,” said James Saudade, Deputy Commissioner for Housing and Community Affairs. “We know a well-housed workforce is a more stable and productive workforce.”

Solving Vermont’s housing problems is being made harder, according to the report, by federal budget cuts and by the squeeze being put on the state budget.

“Vermont’s housing crisis will be exacerbated by the budget cuts being proposed by the Bush administration,” said Erhard Mahnke, of the Vermont Affordable Housing Coalition. “We’re losing Section 8 vouchers; we could lose millions in Community Development Block Grant funding.”

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Contact: info@housingawareness.org