South Burlington City Council chair Helen Riehle hopes to inject $1 million pandemic recovery dollars into the housing trust fund, though it’s unclear how officials plan to spend their federal money and if storing it in the city’s housing trust fund is the best option.

With a city appropriation of only $50,000 a year, some officials feel the housing trust needs some TLC and a reexamination of its funding model regardless of where pandemic dollars land, while others argue the issue is with a dearth of developers, not money.

Last month, city officials created a map of top priorities, housing among them, which will help guide next year’s budget and how they spend their remaining federal American Rescue Plan money. As the second largest city in Vermont, South Burlington was allotted $3,790,112, with the first chunk granted this summer. Some of the funds have already been used to unfreeze jobs in the city’s budget — about $810,679 for three positions over five years — but at a city council retreat in October, when officials gathered to organize their policy priorities, Riehle threw in her million-dollar suggestion.

“I’ve long felt that we need an affordable housing fund that really allows the city to be a little more proactive and supportive of more affordable housing in a way that goes far beyond 10 percent of a development,” she said, referring to the city’s zoning requirements.

“We’ll never catch up,” with the rising cost of living, rate of development and the way the housing trust fund currently operates, Riehle said. Plugging $1 million into the housing trust fund could help nonprofits build more housing and catalyze city efforts to think more creatively, she suggested.

But the money would be a one-time shot, with no booster. And some argue it wouldn’t matter, if no one is lining up to build.

What is the housing trust fund?

With only $50,000 a year, the housing trust fund isn’t generally used by the city to buy property or build houses per se, but it goes toward supporting housing projects with nonprofits.

The trust fund’s last two allocations went to the Champlain Housing Trust: $100,000 for building housing at Allard Square in 2018 and another $100,000 for Garden Street in 2019.

The current balance sits at $100,100, according to city manager Jessie Baker.

In 2014, the South Burlington City Council established the trust fund to support new affordable housing in the area; affordable to households with income below 80 percent of the median. According to 2019 U.S. Census data, which found that the median South Burlington household brought home $73,065, that’s about $58,452.

A standing committee to identify funding options and vet applications was created alongside the trust fund, which city council allotted an annual budget allowance of $100,000 to $200,000, although the final resolution in 2015 was amended to only earmark $50,000 annually.

Housing trust funds aren’t rare birds but they’re not exactly common across Vermont.

Burlington founded a housing trust fund in 1988, creating a continuous funding stream via a one-cent addition to property taxes. In the last three decades, the fund has helped create a 36-bed waystation, build transitional housing for single parents and women who are homeless, build community houses for people who are chronically mentally ill and youth who are homeless, among other initiatives.

Montpelier established a housing trust fund in 2005, also funded by one cent on the tax rate; Williston followed suit in 2017, funding its trust through the general fund and impact fees; and Winooski voted to establish a trust fund in 2019, subsidized by inclusionary zoning fees paid instead of constructing affordable housing units, gifts or awards.

Riehle thinks the city has been “slow to think about” how to tackle the housing crisis. Other city initiatives like Penny for Paths or the open space fund accrue money via one cent on the tax rate — those both have shown tangible results, Riehle noted, and she wonders if that’s an option for affordable housing.

In December 2017, former affordable housing committee chair John Simson pitched increasing funding and a penny on the property tax to the city council, but they rejected both proposals, according to meeting minutes.

Chris Trombly, current affordable housing committee chair, is also in search of creative ways to increase local housing stock, but he said he’s apprehensive to raise taxes when the community is still reeling from a reappraisal and the pandemic.

While setting aside ARPA money for the housing trust fund would be a major boost, he argued it wouldn’t solve the housing crisis or rethink the funding model.

“We have to find a perpetual funding source for that,” he said, adding that one idea should more money become available could be to buy property and partner with a nonprofit or private developer.

Something he hopes will change the housing game, and perhaps bring more applicants to the housing trust fund, is the planning commission’s expansion of inclusionary zoning across the city.

The new standards would require developers building 12 or more lots or homes to make a portion of them permanently affordable. While current standards apply in overlay districts along Shelburne and Williston roads, Kennedy and Tilley drives, Kimball Avenue and Dorset Street, the proposed amendment would require it citywide.

Larry Kupferman, who chairs the committee that manages the housing trust fund, argued that the $50,000 allotment should not be underestimated, and that more money in the fund won’t help if the slow trickle of projects remains the same.

“$50,000 sounds like very little, but in the scheme of things it is a big piece of any kind of financing proposal,” Kupferman said. His committee only meets once or twice a year when an applicant seeks housing trust fund money. But while more money would be great, the demand isn’t there now, he said.

As it stands, Kupferman believes the trust fund’s local funding sends a strong message of support from the community.

“For a municipality to have their own local money that they raised themselves, one way or another, from local taxpayers — that makes a big difference,” he said. “In a certain regard, it doesn’t matter how much it is.”

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