Rental Housing Safety

The Rental Housing Safety Bill, S. 79 was passed last year by the House and the Senate, but vetoed by the Governor. He cited as his reasons for veto:

 

-        He "would support a rental housing registry for only those buildings which exceed two dwelling units available for rental for more than 120 days per year." This later came to be called "a concern for the 'mom and pops'"

-        Changing the health and safety inspection obligation from being the responsibilities of municipalities to the DFS would make the inspections no longer "complaint based" but now mandatory. 

-        There was a threat that a small infraction could result in a unit being taken "off line." 

-        The hope of hiring 5 new inspectors was believed to be insufficient and would result in a future further "expansion of the bureaucracy." 

In the Veto Letter he also expressed support for VHIP, and the VT Homeownership Revolving Loan Fund, and said that these would be funded in the budget. He also put forward a suggestion that attention be turned to working on Act 250 reforms and changes in permitting. 

S. 210 was submitted this year in response to the Governor's Veto Letter. This bill repeats the content of S. 79 while making adjustments in order to satisfy the concerns addressed by the Governor. 

-        Sec. 1 creates a new chapter 172 in Title 20 incorporating all of the S.79 provisions on rental housing inspections and the registry; in S.79 they were blended into Fire Safety’s general authorizing statute, chapter 173. (This has the advantage of not bringing to the forefront existing statutory provisions that are not being changed but which can cause alarm.)  

-        System is complaint driven. Page 2, line 10.

-        New penalty language:

o   For not complying with inspection report the penalty must be reasonably related to the severity of the violation, not to exceed $1000/violation.  Page 4 subsection (c).

o   The failure to register remains the same at $200/unit in both bills.

-        New exemptions from registration and its accompanying fee fee:

o   Lodging establishments licensed by Dept. of Health

o   Property with up to three units which include an owner’s primary residence

o   Nonwinterized seasonal units, and units rented for less than 90 days per calendar year

o   Page7 subsections (4) – (6), (7) in Senate Notice Calendar p. 267.

 

New Appropriations:

-        $2M from CRF to DHCD to implement VHIP in FY2022. Senate Notice Calendar p. 268.

-        $10M from CRF to DHCD to implement VHIP in FY2023. Senate Notice Calendar p. 268.

 

Change in Effective dates

-        VHIP for FY2022 to take effect immediately.

 

The bill has been voted out of the Senate, but there remains concerns about a Veto if/when it passes out of the House. 

 

S. 101

 

This bill has had a long journey. The content of the bill included language addressing redundancy in water/wastewater regulation, expanding the Downtown Development Area tax credit to Neighborhood Development Areas, and municipal bylaw modernization. The language around water/wastewater was removed, House Ways & Means removed the tax credit language, and added what would come to be known as "the Mansion Tax" and funding the expansion of Tax Credits for Manufactured Homes (which came from a failed House Bill). 

 

The funding for bylaw modernization was to move forward through the budget, which is categorized like the VHIP funding that was funded without governing language in statute. Over 40 grants have been issued for bylaw modernization. The Senate Committee on Economic Development has asked for clarity around what has been passed, and what has failed, in the areas addressed in this bill.  

 

There is a difference of opinion pertaining to the Downtown Tax Credits. The Senate proposes to make a permanent change to extend the tax credit to neighborhood areas. House Ways & Means suggests to partition it off by testing the expansion for a 5 year period in order to evaluate the outcomes by creating a stand-alone tax credit for the expansion. It has been said that the administration favors the Senate version. Conversation between Senate and House indicates that there is potential to return to the original version of the Senate Bill thanks to a change in thinking in the House.

Housing Omnibus Bill
 

For the latest information on the Omnibus Housing Bill, S. 226, see its dedicated page here. 

Just Cause Eviction
 

Just Cause Eviction was an item on the ballot in the City of Burlington in 2021. A housing summit was held in 2019 which concluded that while increasing housing stock is important, it is equally important to ensure stability for folks who are in hosing already. City Council engaged with CVOEO and VLCT to talk about a way forward. The concept of Just Cause Eviction (only being able to evict someone when the landlord has a "just cause") exists in 4 States, dozens of municipalities, and many of our own nonprofit housing developers have similar rules already.

 

Strong testimony came from both sides of the conversation and the change was passed on the ballot at 63% city wide. District by district it passed from 52% to as high as 90%. Now it must go through the Legislature in order to be enacted. The Bill was introduced as an Omnibus Bill along with other (non-housing related) Burlington Charter changes. It now has been separated as its own bill (H. 708). It has passed the House and is now in the Senate.

There has been much misinformation about the nature and content of the bill. The bills is in fact not at all as restrictive as many seem to think.

 

  • It would protect Burlington tenants from eviction without “just cause”, and defines “just cause” as:

    • Breach of a written rental agreement

    • Violation of State law regulating tenant obligations in residential rental agreements

    • Nonpayment of rent

    • Tenant’s failure to accept written, reasonable, good faith renewal terms

    • Substantial damage to the property by the tenant, members of the tenant’s household, or guests

    • Behavior of the tenant, members of the tenant’s household, or guests that adversely affects the health and safety of the other tenants, the landlord, or the landlord’s representative

    • Criminal activity on the premises of the rental property or any criminal threat against the landlord or the landlord’s representative

  • It would establish that the expiration of a lease alone is NOT “just cause.”

  • The bill also provides a number of exemptions:

    • Sublets and in-unit rentals

    • Owner-occupied duplexes and triplexes

    • Units being withdrawn from the rental market, including properties to be occupied by the owner or an immediate family member as a primary residence or properties being sold for owner-occupied use

    • Units in need of substantial renovations that preclude occupancy

  • The bill also states that if permission is given for this ordinance, the City of Burlington must:

    • mitigate potential negative impacts on tenants and property owners, including requirements of adequate notice and reasonable relocation expenses that shall not exceed the value of one month’s rent or another amount negotiated by the landlord and tenant

    • Provide for a one-year probational period after initial occupancy

    • Limit unreasonable rent increases to prevent de facto evictions or nonrenewal, (it also clarifies that this is not be construed as a limit to rents beyond the purpose of preventing individual evictions)

    • Mitigate potential impacts on small landlords

  • The ordinance would also be required to clearly define what is “reasonable” and “adequate

  • notice” in defining “just cause” and would require that landlords provide notice of just cause and other legal requirements as part of the rental agreement.

The two sides about the proposal remain largely the same. Opponents argue that there will be unintentional consequences should the measure be passed. They say that landlords will be more discerning about who they accept as a tenant, and that many small scale landlords will remove their units from the market, leaving the rental market in the hands of the larger companies who are more likely to charge higher rents. They feel that the language about "reasonable rent increase" is a form of rent control, and that the measure erodes contract law.

Act 250
 

Changes to Act 250 have been suggested via a few bills. 

There is conversation about suspending Act 250 requirements to developments in Designated Downtowns in order to get the ARPA funds out, and get as much housing built as we can, then look back on the work that was done and evaluate the impact of this temporary exemption. In effect, a pilot exemption. This idea has not been articulated in legislation, but rather simply in conversation in the committee hearings in the Senate Committee on Natural Resources.

The conversation thus far has been around how changes to Act 250 might improve the housing situation in Vermont. The relationship between designated areas, Act 250, zoning, permitting, and priority housing projects have all been discussed. More details can be found in the VAHC discussion thread on Slack. 

These potential changes to Act 250 have also been discussed in the Omnibus Bill hearings in Senate Economic Development. As they review the language in various housing bills for consideration as they build the Committee Bill. The conversation has largely been informative about the intricate complications of Act 250 rather then any suggestions on making changes just yet. There does seem to be consensus that there is a fundamental question on the table: whether to make changes that will remain in perpetuity, or to create some kind of pilot/test to get housing built while we have access to ARPA funding.

The main question before the Senate Natural Resources Committee regarding S. 234 is how the Act 250 permitting process or exemptions to Act 250 in certain growth areas can be changed or used to swiftly spend ARPA funding on mixed-income housing projects before the funding expires. While the committee has identified the two schools of thoughts on this as “exempting Act 250” or “modifying Act 250,” an overarching observation is that something must be done in the short term to free up ARPA dollars. 

 

With regards to modifying Act 250, Agency of Natural Resources Deputy Secretary Gendon testified that while Act 250 has been a success for the past 50 years, S. 234 must guarantee it is a success for the next 50 years. Changes that ANR supports include growing the Natural Resource Board’s staff, expediting projects using ARPA funding, and allowing for projects to concurrently apply for Act 250 and ANR permits in order to save time and costs. Builders like Chris Snyder also testified on the need for more expedient agency review of projects or a deadline where projects receive automatic approval if the agency makes no comment.

 

Looking at exemptions. ANR Deputy Secretary Gendon also suggested a clean exemption for projects in Designated Downtown Development Areas or increasing the number of units that currently enjoy an Act 250 exemption for Priority Housing Projects since such units are capped by population of the given municipality.This last piece has gained traction in H. 511 which lifts the PHP caps in order to create more financially viable opportunities and to incentivize the development of affordable housing units. The Executive Director of the Chittenden Regional Planning Commission, Charlie Baker, also testified in favor of exemptions, stating  that most of the anxiety in development comes from the uncertainty of local and state approvals and appeals processes adding more time and cost to projects. Besides multiple approval processes taking up time, multiple appeals processes have also invited NIMBY actors to delay and potentially derail projects by abusing the various chances to appeal.

 

While the committee has appeared more open to different arguments and ideas, some members have expressed different concerns and suggestions during the testimony. As stated before, there is an overarching concern among the committee regarding swiftly spending ARPA funding, but some senators such as Chairman Bray are less inclined to welcome exemptions to Act 250 over larger modifications and amendments. Members have expressed some concerns ranging from a lack of environmental scrutiny with more projects being exempted to whether there will be any incentive for developers to build affordable housing in growth centers over luxury housing if exemptions are allowed. Initial suggestions offered up by members have included expanding the definitions and reach of the various designated growth areas and even allowing exemptions in these growth areas with a sunset clause in order to allow ARPA funding to be spent on projects and for the effects on the housing stock and potential sprawl to be studied and addressed by the General Assembly later on while revisiting Act 250. Ultimately, more in depth deliberation by the committee is expected as the bill moves into the markup phase this week.

BAA
 

The Budget Adjustment Act was submitted by the Administration to the House of Representatives. House Appropriations referred various sections of the bill to various committees in order to gather input. The portions pertaining primarily to housing were referred to the House General, Housing, and Military Affairs. The housing related allocations were (1) $50M additional dollars to VCHB from ARPA funds, (2) $20M additional dollars to DCF from ARPA funds for VHIP, and (3) $5M dollars to DCF for a "missing middle pilot program" that would be implemented by VHFA.

 

Testimony was heard that resulted in House General submitting a memo to House Appropriations with their recommendations. These sentiments were (1) support for the VHCB allocation (2) although supporting the $20M, they highlighted the problematic nature of funding a program without policy (which had been vetoed through S.79). Finally (3) they felt there was insufficient details provided for the developing pilot program at VHFA to enthusiastically support this allocation.

 

Language was also submitted in the BAA pertaining to exempting individuals living in the GA Hotel/Motel program from tenancy under Title IX. Specifically, this language was directed at individuals whos housing in these establishments was being funded by VERAP. The intent was directed at the consequences that could come after funding shifts from FEMA reimbursement to VERAP. Concerns were raised about the fact that such a change should not be in BAA in the first place, and that this would negatively impact folks in the same living arrangements outside the GA program using VERAP funds. House General noted these concerns in their memo. House Human Services heard the same opposition in testimony there, but did not include any language about these concerns in their memo.

 

Ultimately, House Appropriations submitted:

  • $25M ARPA & $30M in GF. It was learned recently that ARPA funds cannot be used to draw down the Federal Tax Credit.

  • VHIP program accepted as proposed by the Governor although additional work needs to be done.

  • The Committee decided there was insufficient information about the Missing Middle Program to fund it.

 

​Appropriations added language about continuing the hotel/motel program and identified to Senate Appropriations the problems pertaining to the statutory language around changes to Title IX. Senate Appropriations voted the bill out removing VHIP, intending for those funds to be connected with S.210, the Rental Housing Safety Bill.

 

The BAA is now in Conference Committee

FY23 Budget
 

The Budget Adjustment Act was submitted by the Administration to the House of Representatives. House Appropriations referred various sections of the bill to various committees in order to gather input. The portions pertaining primarily to housing were referred to the House General, Housing, and Military Affairs. The housing related allocations were (1) $50M additional dollars to VCHB from ARPA funds, (2) $20M additional dollars to DCF from ARPA funds for VHIP, and (3) $5M dollars to DCF for a "missing middle pilot program" that would be effected through VHFA.

Testimony was heard that resulted in House General submitting a memo to House Appropriations with their recommendations. These sentiments were (1) support for the VHCB allocation (2) although supporting the $20M, they highlighted the problematic nature of funding a program without policy (which had been vetoed through S.79). Finally (3) they felt there was insufficient details provided for the developing pilot program at VHFA to enthusiastically support this allocation. 

Language was also submitted in the BAA pertaining to exempting individuals living in the GA Hotel/Motel program from tenancy under Title IX. Specifically, this language was directed at individuals whos housing in these establishments was being funded by VERAP. The intent was directed at the consequences that could come after funding shifts from FEMA reimbursement to VERAP. Concerns were raised about the fact that such a change should not be in BAA in the first place, and that this would negatively impact folks in the same living arrangements outside the GA program using VERAP funds. House General noted these concerns in their memo. House Human Services heard the same opposition in testimony there, but did not include any language about these concerns in their memo.

Ultimately, House Appropriations submitted:

 

(1) $25M ARPA & $30M in GF. It was learned recently that ARPA funds cannot be used to draw down the Federal Tax Credit.

(2) VHIP program accepted as proposed by the Governor although additional work needs to be done.

(3) Committee decided there was insufficient information about the new program to fund it.

Appropriations added language about continuing the hotel/motel program and identified to Senate Appropriations the problems pertaining to the statutory language around changes to Title IX. 

Senate Appropriations voted the bill out removing VHIP, intending for those funds to be connected with S.210, the Rental Housing Safety Bill.

Other Relevant Legislation
 

New bills just introduced that are of relevant interest...

H. 403 - An act relating to prohibiting no cause evictions

Bill seeking to prohibit no cause evictions.

 

H. 619 - An act relating to the installation of fireblocking in single-family dwellings.

This bill proposes to require all 8 new and existing single-family dwellings to have fireblocking installed before they are sold.

H. 640 - An act relating to creating tenant rights to purchase an apartment building

This bill proposes to afford the tenants of an apartment building the rights to receive notice of the landlord’s intent to sell the building, and to negotiate in good faith and purchase the building.

H. 625 - An act relating to providing protections against eviction, foreclosure, and tax sales

Bill seeking to provide temporary protections to tenants and homeowners against no-cause evictions, foreclosure actions, and tax sales

 

H. 510: Child Tax Credit

From House Ways & Means

 

Establishes a Vermont child tax credit.

  • Inspired by Federal Child Tax Credit: 300 per child per month

 

Vermont Version

  • $100 per month, per child, for every child 6 years old and under

  • 200k income limit single filer

  • 400k income limit for joint filer

 

Refundable tax credit

  • If you have a low or no tax liability you get a payment

  • Directed towards folks with children who are younger

    • Less about covering the costs of those time sin life, but more because families in this age range tend to have lower incomes for a variety of reasons.

 

Ability to pass this bill is dependent on if there is monies available for this tax cut.

  • Competes of course with other priorities

  • Conversations continue

 

Would this conflict with the childcare tax credit?

  • No. Two very separate conversations

  • Child & dependent care credit is directed towards costs incurred.

  • Don’t conflict, in fact they align

 

H. 461:

From Ways & Means

 

This bill proposes to amend the definition of household for the purposes of the homestead property tax credit in order to exclude the income of asylum seekers, asylees, and refugees from household income.

 

  • Help hundreds of Vermonters

  • Fiscal note: maximum impact to education fund is 150k