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Vermont’s rental rehab program has fixed up 329 units with $20 million more to spend


Gov. Phil Scott discusses the Vermont Housing Improvement Program at NeighborWorks of Western Vermont in West Rutland. Photo by Ethan Weinstein/VTDigger

WEST RUTLAND — While most of the major housing investments passed during this year’s legislative session addressed the need for new construction, one appropriation focused on a different category of housing: the hundreds of existing units sitting unused because they are not up to code.

State officials gathered Wednesday at the headquarters of one local housing organization, NeighborWorks of Western Vermont, to encourage landlords across the state to take advantage of the funds.

The Vermont Housing Improvement Program, or VHIP, offers rental property owners up to $50,000 to rehabilitate unused rental units. The program also supports property owners in building accessory dwelling units. In exchange for grant funding, landlords must match grant funds at least 20%, and agree to rent the updated units at or below the U.S. Department of Housing and Urban Development’s fair market rents for five years. 

To find tenants, landlords must work with a designated local organization that specializes in finding housing for people struggling with homelessness, or for recent immigrants and refugees. 

“This is the kind of initiative that will move the needle and approach this sustainably,” Gov. Phil Scott said Wednesday. “It provides more stability with a permanent home and helps create capacity that benefits the entire rental market.”

The program has thus far brought 329 rental units back online, using $13 million total over two previous rounds of funding. Now the $20 million that lawmakers approved last session is available to support further rehabilitations, according to Nate Formalarie, a spokesperson for the state Agency of Commerce and Community Development.

About three-quarters of the total units are being used to house people exiting homelessness, said Josh Hanford, commissioner of the Vermont Department of Housing and Community Development. The average grant to landlords has been less than $25,000. 

“We’ve been able to triple the number of affordable housing units we produce each year (compared to) pre-2020 levels,” he said. 

NeighborWorks of Western Vermont — an organization helping people in Rutland, Addison and Bennington counties with housing-related issues — has facilitated 83 unit renovations, according to Hanford. It hopes to add an additional 73. 

While cities like Rutland and Bennington have had success — with 35 and 34 units added respectively — Burlington has only seen one unit come online thus far. Hanford suggested that a demand for housing in the state’s largest city means fewer vacant properties to bring up to code, but he pointed to nine units brought online in Colchester as a success in Chittenden County. 

Don Chioffi, chair of the Rutland Town Selectboard, asked whether money used to house vulnerable Vermonters in motels could be spent on more permanent housing solutions. 

“We lost our hotel space in this community, and we have to have that,” he said. “We have to be able to attract people to stay here.”

Hanford suggested VHIP might be a solution.

“There’s probably no one up here that thinks that having folks staying in hotels and motels is the answer,” he said. VHIP is promising, Hanford said, because “it’s actually a solution we can point to at less than $30,000 a unit to bring housing and direct folks exiting homeless exactly to that housing.”

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