This commentary was written by Nancy Owens and originally published by VT Digger on March 28, 2023.
Today’s housing market is broken. A lack of housing limits people’s mobility. Seniors who are overhoused cannot move to a more appropriate home; workers who want to secure better jobs cannot find a home in strong employment centers; people who are ready to purchase homes cannot find one they can afford.
While reduced mobility is true for everyone, it really impacts people with less financial resources.
Why is there not enough housing here? Economists and others provide data and analysis about demographic and economic trends that impact housing supply and begin to explain some of the issues.
- For example, household sizes are shrinking, so even if the overall population is not growing strongly, we need more homes to house the increasing number of households.
- Construction of new homes of all kinds has declined to an anemic rate for the past 20-plus years, shrinking the supply of available housing compared to demand over an extended period.
- Young people are burdened with student debt and are unable to save sufficient money for a down payment, so they are putting off buying a home, renting for longer, and adding to the demand for rental housing.
- More people are seeking to live in Vermont. Some are moving here permanently, others are here temporarily, or buying second or third homes as a hedge against the pandemic or climate change.
Given a lack of supply combined with high demand, it’s understandable that housing costs have risen more over the past two years than we’ve seen in decades. According to the Vermont Housing Finance Agency, the average home cost has increased 19% since 2019 and the rental vacancy rate across Vermont is 2% to 3% below the national average.
In Chittenden County where the vacancy rate hovers at 1%; that means there are only 100 homes available to rent at any time for a population with 160,000 households.
Today supply does not meet demand, and so rents and sales prices are rising. With the current rise in labor and material costs, supply chain issues, and rising interest rates, the cost of developing and building housing has risen to the point where development is slowing down even as the demand grows.
What needs to happen? How can we have enough housing for everyone?
First, we need a steady and sustained funding source to build more housing. That’s why nonprofit housing organizations are calling upon the Legislature to fund $175 million for housing this year.
Secondly, we need to redefine regulations that are currently inhibiting the development of all types of housing, from small-scale duplex and triplex buildings to larger apartment buildings. S.100, a bill related to housing, falls short of the $175 million requested, yet it does contain substantial funding and provides numerous avenues to increase the number of homes in Vermont.
People of all incomes are struggling to have a decent, safe affordable home. And more people are without any housing at all.
Staying the course is not enough. Every community needs to make real changes in how housing is permitted and built if we expect to have homes for everyone.
Nancy is the founding co-president of Evernorth, a nonprofit organization that provides affordable housing and community investments in Vermont, New Hampshire and Maine. She is a member of the Federal Reserve Bank of Boston’s Community Development Advisory Council and is vice chair of VEIC, a nonprofit energy efficiency utility.
Link to the full column can be found here: https://vtdigger.org/2023/03/28/nancy-owens-vermont-needs-more-housing-for-everyone-heres-how-to-make-progress/