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VHFA News

Posted by: Mia Watson on June 21, 2018 - 8:31am

The annual report on housing from the Joint Center for Housing Studies of Harvard University (JCHS) reveals that although homeownership rates are beginning to climb, young adults are finding it increasingly difficult to afford to buy their first home. The report found that from 1990 to 2016 the median home price rose 41 percent faster than overall inflation, outpacing wage growth during the same period. Homeownership rates among young adults today are lower than they were before the recession. This report comes as VHFA and many in the lending, real estate, and housing communities recognize June as national Homeownership Month.

The past decade was marked by rapidly increasing demand for rental housing. As the economy has improved, households are now slowly beginning to reenter the homebuyer market. However, the inventory of existing single-family homes for sale across the country is currently at the lowest level since the National Association of Realtors began tracking national sales in 1982. Lower-cost homes are especially scarce. A major factor responsible for the limited inventory is the slow pace of new construction of single-family homes, which the report attributes to continued builder caution following the 2008 housing market crash, increasing construction costs, and a dwindling supply of buildable lots in metro areas where demand is highest.

Barriers to enter homeownership also put pressure on the rental housing market. The large number of households that are still struggling to enter homeownership and remain in rental housing contribute to low vacancy rates and higher rents. JCHS reports that nearly 48 percent of renters nationwide pay more than a third of their income towards housing costs, which exceeds the federal standard of affordability. When households pay more than 30 percent of their income on rent, it can be difficult to afford other basic necessities such as food, transportation, and healthcare.

Increasing income inequality is a key factor in the overall housing affordability crisis. Since the late 1980s, the median income among Americans in the key home buying age bracket of 25-34 increased only 5 percent overall when adjusted for inflation. That increase is well under the 52 percent growth in the overall United States economy (based on GDP per capita) during that time.

The report argues that programs supporting homeownership are necessary to confront a growing national affordability crisis. The ability to save enough to afford a down payment and closing costs is a significant barrier for first-time homebuyers. Affordable housing organizations like Vermont Housing Finance Agency (VHFA), which offers low down payment mortgage loans and down payment and closing cost assistance, and NeighborWorks(R) Homeownership Centers, which provide financial readiness, home buyer education, and assistance programs are critical for helping young home buyers purchase their first home.

 

Posted by: Mia Watson on June 19, 2018 - 9:04am

Residents of Heritage Courts in Poultney are celebrating the recent renovation of their apartment complex. The $3.1 million project was managed by the Housing Trust of Rutland County, which owns the property. The project was funded in large part by VHFA, which awarded both state and federal tax credits as well as loans. This renovation allows Housing Trust of Rutland County to preserve 17 affordable apartments for seniors while significantly improving the energy-efficiency of the complex.

“We were pleased to be able to assist with the renovation,” remarked VHFA Deputy Director Maura Collins, who attended the project’s open house last week. “Modernization projects like this one are critical for preserving Vermont’s limited supply of affordable, rural rental housing.”

Renovations include a new heating system, improved insulation, replacement windows and doors, roof and siding replacement, and modernization of kitchens with new, energy-efficient appliances. In addition to improving the comfort and appearance of the units, the improvements are expected to yield a 45 percent reduction in operating costs.

The renovation will add a community room, accessible laundry facilities, and a community garden.  Housing Trust of Rutland County will also offer SASH® (Support and Services at Home) resources to help residents maintain independence and quality of life.

This project also received funding from Vermont Housing and Conservation Board (VHCB), the National Housing Trust Fund, and the U.S. Department of Housing and Urban Development’s (HUD) HOME program.

Photo from Kate Barcellos, Rutland Herald. Pictured from left: Rosie McManus, resident; Katie Buckley, Commissioner of the VT Department of Housing and Development; Maura Collins, Deputy Director of the Vermont Housing Finance Agency.

Posted by: Mia Watson on June 14, 2018 - 2:57pm

The latest edition of the annual report on rental housing affordability from the National Low Income Housing Coalition and the Vermont Affordable Housing Coalition has found that Vermont has one of the highest gaps in the nation between the cost of rent and renter wages. Out of Reach: The High Cost of Housing reports that for a Vermont renter to be able to afford a modest two bedroom apartment, he or she would need to earn $22.40 per hour, well above the average renter wage.

This estimate is known as the Housing Wage. The Housing Wage is the hourly wage a household must earn while working 40 hours a week to be able to rent an apartment at HUD's Fair Market Rent and pay no more than 30% of its income towards housing costs including utilities. In Vermont, Fair Market Rent is $1,165 for a two bedroom apartment. When households pay more than 30% of their income on rent, it can be difficult to afford other basic necessities such as food, transportation, and healthcare.

To afford a two bedroom apartment at Fair Market Rent, a Vermont renter would need to earn $22.40 per hour, or about $46,600 annually. Some areas of Vermont are even less affordable, with Chittenden County’s Housing Wage at $27.32 per hour. For context, Vermont minimum wage is $10.50 per hour, with the average Vermont renter earning just $12.85 per hour. This means that thousands of working Vermont households are struggling to find decent, affordable apartments.

Although this problem is widespread throughout the country, Vermont’s affordability gap is particularly severe. The $9.55 gap between the two bedroom Housing Wage in Vermont and the average renter wage is the 5th highest in the nation, higher than in Massachusetts, Connecticut, Maine, and New Hampshire. As in other states, Vermont’s lack of affordable rental housing is driven by a lack of existing rental housing stock and limited new development of non-luxury properties.

Vermont Senator Bernie Sanders, who wrote the preface to the report, argued that, “The affordable housing crisis demands that we think big and act boldly. We must make a historic and sustained commitment to ensure that every family has an affordable place to live and thrive. This starts with significantly expanding federal investments in affordable housing through programs like the National Housing Trust Fund, the HOME program and other critically important resources.”

For more information, read the Vermont Affordable Housing Coalition’s (VAHC) analysis.

Posted by: Mia Watson on June 7, 2018 - 4:24pm

A task force convened by the New Democrat Coalition, a group of moderate Democrats in the U.S. House of Representatives, has found that housing is becoming increasingly unaffordable and unavailable for many Americans. In the report, Missing Millions of Homes, the Coalition linked the lack of affordable housing to a combination of wage stagnation and decreased construction.

The report found that rents are increasing faster than household incomes in nearly every major housing market, despite a growing economy. Meanwhile, as the employment has increased following the Recession, more formerly unemployed or underemployed workers are once again competing for apartments and home purchases. In the cities with especially high demand, competition over scarce rental housing has forced thousands of low income households out of the area or into homelessness. When low income households can find housing, they are often forced to devote a large portion of their income towards rent, limiting their ability to afford other basic necessities.  

The report also found that homebuilders are producing 30 percent fewer homes today than a decade ago. The causes for the shortfall are complex, but the report identifies several contributing factors, including restrictive zoning and land-use regulations, increased demand for housing in walkable transit-served urban areas, which have limited land available, reduced construction financing availability since the financial crisis, and a limited construction labor pool.

The task force argues that the rate of home construction will need to increase dramatically over the next decade to meet the growing demand. The report suggests a variety of potential strategies, including improving trade policies to decrease the price of building materials, revising zoning policies to encourage denser development, and increasing investment in affordable housing subsidies.

Posted by: Leslie Black-Plumeau on June 4, 2018 - 5:09pm

Vermont Housing Finance Agency (VHFA) announced today that later this year Sarah Carpenter, Executive Director, will be retiring, after twenty years at the agency’s helm. “As a result of Sarah’s vision and skill thousands of Vermonters have moved into decent, affordable homes since she arrived at VHFA in 1998,” said Randy Amis, chair of VHFA’s Board of Commissioners. “She has expertly led VHFA’s financial activities and programs, built strong partnerships and shared her deep expertise with state and federal policy makers. Vermont is a better place to live thanks to Sarah’s impact.”  

Carpenter’s leadership and inspiration propelled VHFA to a spot among the top five Best Places to Work in Vermont in each of the last three years.  In 2016, the agency was ranked at the top of the list among small and medium sized Vermont companies.

The volume of VHFA mortgages provided to low and moderate-income Vermonters grew by $1.3 billion during her tenure, largely due to Carpenter’s work with VHFA’s staff, board, advisors and partners. Most recently Carpenter worked with legislative leaders to enact a down payment assistance program for first-time home buyers. The program’s popularity remains well beyond original expectations due to the critical need this assistance plays for young renters looking to buy homes in Vermont.

VHFA’s role in creating and rehabilitating much-needed affordable rental apartments also grew dramatically under Carpenter’s leadership. In 2000, VHFA spearheaded a successful effort to encourage Congress to increase caps for the Low-Income Housing Tax Credit Program and private activity bonds. That same year, Carpenter worked with legislators to enact the State Housing Tax Credit program to supplement the federal allocation due to pressing needs statewide for more affordable rental apartments.  These efforts pushed the total number of apartments financed through VHFA up to 8,600.

Carpenter is a native of Burlington, Vermont, and a graduate of UVM and Harvard University.  Prior to VHFA, she served as the Executive Director of Cathedral Square Corp. from 1983-1998. Carpenter has been the recipient of a number of awards including the Vermont YWCA Susan B. Anthony Woman of the Year Award and a NeighborWorks America Government Service Award. She has also served on numerous of boards with federal, state and local organizations including Leading Age, the National Council of State Housing Agencies’, the Federal Home Loan Bank of Boston, and Fletcher Allen Healthcare (now the University of Vermont Medical Center).

VHFA’s Board of Commissioners will meet in the next few weeks to plan its strategy for identifying Carpenter’s successor.

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