VHFA News

Two new reports show that rental housing in Vermont is unaffordable for many workers, not only for those earning minimum wage, but also for skilled middle-income workers.

Out of Reach: The High Cost of Housing, the annual report from the National Low Income Housing Coalition (NLIHC) and the Vermont Affordable Housing Coalition (VAHC), reveals that a Vermont worker would need to earn $18.18 per hour to afford a one-bedroom apartment. This figure is known as the Housing Wage, the hourly wage a household must earn while working full time to afford a decent apartment at fair market rent, while spending no more than 30% of their income on housing expenses. Most renters earn far less than that amount, with the average Vermont renter earning just $13.40 per hour.

Finding affordable housing is even more difficult for workers earning the minimum wage of $10.78. No Vermont county has fair market rents even for the smallest, studio apartments that are affordable for minimum wage workers. In the greater Burlington area, which has the highest housing prices in the state, a minimum wage worker would need to work nearly 64 hours per week to afford a studio apartment. 

The full data on 2019 fair market rents and Housing Wages has been added to the Community Profiles on HousingData.org, a free housing information resource managed by VHFA. The site also features a database of the state’s subsidized rental housing, which helps low-income Vermont households find apartments that they can afford.

While the affordable housing shortage hits minimum wage workers the hardest, housing affordability is a challenge for even moderate-income Vermont workers. The National Housing Conference’s (NHC) Paycheck to Paycheck report finds that wages for many jobs would not be enough to afford rent for a one bedroom apartment in the Burlington metro area, including child care workers, home health aides, security guards and bank tellers.

Many skilled workers, like carpenters, police officers, teachers, mechanics and registered nurses could afford rent for a small apartment, but would not be able to afford a larger apartment suitable for a family or down payment on a house on their incomes alone. Although many workers might be part of two-earner households, which would expand their purchasing power, the report doesn’t take in account the high cost of childcare and student loans, which can easily exceed a worker’s entire salary.

It is clear the housing market in Vermont is failing to meet to the needs of many households. One solution to this problem is more housing. Vermont’s low rate of housing development over the past two decades has led to low rental vacancy rates and low inventories of home for sale, both of which tend to drive up prices. To reverse this trend, Vermont will need to remove regulatory barriers that inhibit housing development as well as investing more resources in subsidized housing programs.

Earlier this week, the Vermont Department of Housing and Community Development (DHCD) launched the Zoning for Great Neighborhoods project, an initiative aimed at helping Vermont cities and towns break down the regulatory barriers preventing them from meeting the housing needs of Vermonters.

Although many Vermont cities and towns have acknowledged the need for more housing, including a variety of different home sizes, home types, and price points, municipalities often have outdated zoning requirements that constrain new development or redevelopment. It was very common in the 1960s and 1970s for towns to adopt boilerplate zoning codes that heavily prioritized suburban development over downtown infill, and many municipalities have not completely overhauled these codes since then. These codes often require unnecessarily large lot sizes and other restrictions that make it difficult to build the walkable neighborhoods close to work, schools, and services that both millennials and seniors want to live in.

Many towns and cities are interested in reevaluating their zoning bylaws to promote housing and lower costs associated with development, but do not have the staff resources to devote to the project. Zoning for Great Neighborhoods will help provide guidance and model bylaw language as well as launching a campaign to heighten public awareness of the need for flexible housing options and updated zoning codes.

Led by the Vermont Department of Housing and Community Development, the Zoning for Great Neighborhoods project is supported by the Vermont Housing & Conservation Board, AARP-VT, and the Vermont, Green Mountain and National Association of Realtors. The project will receive technical assistance from the nonprofit Congress for the New Urbanism (CNU) and Vermont’s Regional Planning Commissions.

Mallory Baches, Program Manager for CNU, remarked, “The main goal of this project is to meet communities where they are: assess local capacity, provide strategic support, and offer practical solutions that enable great neighborhoods.” 

The project began with DHCD’s survey of municipalities and housing stakeholders to identify factors that add to the cost of housing and undermine neighborhood vitality, the results of which will be released in the coming weeks. The project’s next steps will involve meeting with communities, analyzing typical local regulations, and proposing alternatives that can support the types of homes needed. The full toolkit for municipalities will be completed by this spring, 2020.