Creating Affordable Housing While Controlling Residential Sprawl:

Vermont's Housing and Conservation Bureau

There are two basic levels of government that have historically functioned to create affordable housing while controlling residential sprawl. These are the state and local levels. Such a program at the state level is usually based on the community land trust model. Generally these programs use federal, state, and often local funding in order to procure affordable housing perpetually. These programs are created by state legislation, and the housing procured or created remains affordable housing perpetually. The idea is that affordable housing should be not only created but also conserved for future generations including the land that such housing is located on. Most states have programs promoting land conservation, if only to include it in the park system for resident recreation. On the local government level affordable housing is created by zoning it, or by legislating programs whereby building permits are given only to projects that are affordable or suitable for existing residents. This is coupled with a land conservation scheme such as an Urban Growth Boundary. This method is based on legal decisions declaring that potential future residents are not a definable body and have no standing. Local governments are therefore only beholden to their existing residents’ needs. This is not to say that planning for future growth should not occur, but that facilitating future growth is not a duty.

The need for collaboration of efforts to both provide affordable housing and conserve land is quite pressing. Land conservation through private land trusts has grown immensely over the past few years. This effort is laudable, but millions of acres of prime farmland are being covered with houses in the US on a yearly basis. This threatens the food security of the US. While some note that the US is not very densely populated, it is also a fact that the US consumes twenty percent of the worlds resources even though it is less than five percent of the world’s population. This nation is also the leading exporter of food to the rest of the world. This means that the loss of our farmland is of international significance as well; 800 million people already are chronically malnourished. The need for affordable housing is widespread across the nation. By conserving the affordable housing perpetually, future generations of all income levels will also be able to be homeowners and live near their places of employment.

The best example of a state government acting to create affordable housing while controlling residential sprawl comes from Vermont. Vermont’s programs are not only exceptional in that they look at both affordable housing and land conservation issues the, state was recognized as having one of the 5 best state affordable housing programs in the country by the US Department of Housing and Urban Development.i In the early 1980’s the state was faced with an increase in the loss of viable farmland and a rise in the price of houses statewide.ii This is a situation that is or has been shared by many states across the nation. Immediately following World War II the GI Bill was used to authorize millions of loans for homeownership for veterans.iii Previous to this a majority of Americans had been renters.iv This led to a wave of homebuilding across the nation, generally in suburban subdivisions within driving distance of major metropolitan areas.v The majority of Americans still tend to buy homes in suburban residential areas, and this pattern shows no sign of slowing despite much rhetoric and effort by pro-density advocates.vi

Many people have tried to preserve features of their region, which drew them there in the first place. Fighting against growth and sprawl are very popular in many diverse parts of our Country. But there is often a nagging feeling that preventing new construction will drive up the cost of housing and make regions unaffordable. Vermont has addressed this seeming dichotomy in ways that are unique and for the most part successful.

In 1987 Vermont passed the Vermont Housing and Conservation Trust Fund Act.vii Through this Act the state set up a system of partnering with non-profit organizations in order to create a large stock of affordable housing. This Act also created the Vermont Housing and Conservation Board or VHCB a nine-member panel given the mission of determining what the housing and conservation needs of Vermonters are. The system functions to keep affordable housing perpetually affordable, part of this includes securing funds to renovate when necessary. Part of the importance of this means of providing affordable housing is that it allows for more funds to be retained in the long-term by arresting the appreciation of land and property values. Housing programs that allow people to purchase affordable housing by paying into a fund ultimately lose because it is usually more expensive and difficult to procure new housing. The secondary benefit of this system is that it cuts down on residential sprawl. By keeping property in the system individuals are not forced to seek affordable housing in the hinterlands. There are other ways that the VHBC works to arrest residential sprawl that will be discussed further on.

Vermont also has a rather varied approach to creating affordable housing. The programs are available to anyone who meets the federal criterion for assistance. The least intensive programs help individuals pay the down-payment and purchasing costs for the house. If additional help is needed there are fixed interest rate programs or even programs to defer interest for a few years. Programs specifically targeting the elderly, non-profit workers, people with HIV, veterans, minorities, and artists also exist. Each of these is able to channel funds from a number of sources to assist individuals with affordable housing.

The secondary aspect of the VHCB is conservation funding. Farmland, Wilderness/Recreation, and Historic sites are priorities for this organization. By having this single organization look at both affordable housing and conservation issues a number of unprecedented projects have taken place. One example is a restored brick schoolhouse which is now a home for elderly residents. Both historic preservation and affordable housing funds were procured, as well as funding raised by the local community to retrofit the schoolhouse as a residence. By tying historic preservation intentionally to affordable housing many more such win-win situations are possible.

The VHCB also is focused on repairing existing structures for affordable housing, and then perpetually keeping these sites as affordable housing. The VHBC has a policy of trying to avoid building new buildings as affordable housing. This fits directly into their dual mission of preserving farmland and wilderness areas. Funds are procured to extend state parks, buy conservation easements, and support farming as a valuable economic function.

Just to gage exactly how beneficial it is to couple these two important issues together and have the holistic view of housing and conservation, let’s take a look at what is happening in much of the US. Generally people tend to argue about whether environmental preservation or affordable housing is more important. By separating these two issues a number of things happen. First environmental regulations are passed against an onslaught of voices declaring that housing prices will go up if open space is preserved. Secondly affordable housing projects are generally sited on land that is near public transit and therefore has a high property value and thus very few projects are carried out because the available funding is quickly spent. The vast majority of residents who want affordable housing generally purchase houses in the suburbs on cheap property and commute, thus causing the epidemic of urban sprawl that is unrelenting in its destruction of prime agricultural land. This ultimately causes these people with limited funds to commit to commuting long distances, which includes long-term fuel and automobile expenses. In addition to added fuel and auto costs, this sprawl type infrastructure contributes to long-term dependence on fossil fuels, thus contributing to foreign business policies that include volatile nations and global warming.

By polarizing these two issues people are constantly torn between two things that they want, affordable housing and a beautiful environment. To further complicate matters there are deeply imbedded bureaucratic functions such as Environmental Impact Statements and Housing Impact Statements that can cause time-consuming entanglements for governmental staff. So long as these two goals are separated into different governmental departments, assessments of environmental impact and housing price impact may both be compromised in pursuit of good public policy.

Let’s further explore the legislation behind and function of the VHCB. The legislation was drafted in such a way that the VHCB acts primarily as a liaison between non-profit organizations that wish to provide affordable housing and the many sources of funding for affordable housing. The VHCB also provides funding to preserve farmland, natural areas, and historic properties. The source of the fund comes in part 50% from the property transfer tax. This tax on real estate transfers is matched by state and federal funding for affordable housing, conservation, environmental protection, and historic preservation.

All affordable housing projects are to be perpetually affordable. Projects that receive the highest priority are those that fulfill more than one of the VHCB’s missions. Priority is also given to projects that provide housing in areas that have high-priced housing markets. Low income families and farms directly threatened by development also rank high on the priority list, as do natural areas that are of unique significance or provide habitat for endangered species. The VHCB is to provide an explanation if one of its dual missions receives more funding during any year. The use of historic properties for affordable housing also receives very high priority.

The policy has been developed over the years to directly inhibit affordable development on prime farmland, to take into account archeological sites, and to provide special funding for developers who wish to repair and refurbish properties that are already in the affordable housing system. Farmland put into conservation through this system is also to remain affordable to future farmers. The VHCB has regular public forums to gage what the prime interests of the people of Vermont are. Local projects are also funded through the VHBC, so that towns and cities can apply for funding as well if they have projects that meet the criterion.

i HUD News Release. “HUD Recognizes Vermont with ‘Doorknocker Award’; Recognized for outstanding work in affordable housing” Retrieved from: http://www.hud.gov/local/vt/library/archives/localnews/pr2005-01-13.cfm on January 24, 2007.

ii Vermont Housing and Conservation Board Mission and History. Retrieved from: http://www.vhcb.org/Mission.html. on January 22, 2007.

iii US Dept of Veterans Affairs. “History of the GI Bill” Retrieved from http://www.75anniversary.va.gov/history/gi_bill.htm on January 15, 2007

vi Gordon, Peter and Harry W. Richardson. Exit and Voice in US Settlement Change. p. 3. Presented at the 27th Annual Conference of the Association of Private Enterprise Education, Cancun, Mexico April 7-9 2002. Retrieved from: http://www-rcf.usc.edu/~pgordon/pdf/exit_voice.pdf on January 22, 2007

viiVermont Housing and Conservation Board Mission and History. Retrieved from: http://www.vhcb.org/Mission.html. on January 22, 2007.

Creating Affordable Housing While Controlling Residential Sprawl: Vermont's Housing and Conservation Bureau

Creating Affordable Housing While Controlling Residential Sprawl:

Vermont's Housing and Conservation Bureau