Report cites lack of affordable housing
Toolbox
By Louis Porter VERMONT PRESS BUREAU - Published: April 29, 2009
MONTPELIER — The rate of home foreclosures in Vermont has not soared as it has in many parts of the country, nor have home values plummeted with the current recession, a new report finds.
While that is welcome news, it also means that tough economic times have not done much to alleviate the high cost and low supply of housing in the state.
Over the last decade, median income in the state has climbed, but so has the income needed to purchase a home, according to the newest version of the state's annual report on housing prices and wages.
The cost of rental housing has increased by 9 percent over the last year, according to the report, entitled "Between a Rock and a Hard Place," produced by the housing advocacy groups in the state.
"We are certainly not seeing people's wages increase by 9 percent," said Sarah Carpenter, executive director of the Vermont Housing Finance Agency. "In some areas we are really short of rental housing."
The high cost of housing relative to wages in the state remains a serious problem, Carpenter said.
"The answer to a lot of this is more housing," she said.
But the construction of new housing has proven elusive and the gap between housing expenses and wages has not closed. And with the national economic collapse and credit problems, the number of new home starts has dropped to record lows, state economists told officials Friday.
There may be help coming from the federal government, however, said Erhard Mahnke of the Vermont Affordable Housing Coalition.
"There is a glimmer of hope coming out of Washington, D.C.," he said.
There will likely be roughly $40 million in additional money coming from the federal government for housing in Vermont over the next two years, including stimulus money, a housing bill and other funds, Mahnke said.
But the housing problem remains, he said.
"Clearly this crisis is long-standing and predates the current economic downturn," Mahnke said. "People's incomes, those who still have jobs, are simply not keeping up."
To afford a median-price home in Vermont of about $200,000, the members of a household in the state would have earn about $63,000 and have $14,000 in cash for closing and down payment expenses, according to the report.
The median household income in the state is $51,566, providing enough to afford a house worth about $163,000, leaving a significant gap between the available income and the price of many homes on the market in the state, housing advocates said.
Both lawmakers and officials in the administration of Gov. James Douglas said it is important to create more affordable housing in the state, but there's some disagreement about how to do that.
Legislators who attended the meeting at which the housing report was unveiled said that Douglas' proposal to cut money for the Vermont Housing and Conservation Board was the wrong way to go.
"The governor wants to cut back the public support of housing," Senate President Pro Tem Peter Shumlin said. "This would be the worst time to cut back."
But Betsy Bishop, who oversees housing, community affairs and economic development for the administration, said that was a misrepresentation of Douglas' proposal.
"It is important to note the governor's proposal was to reduce the conservation portion of the VHCB budget and not to reduce affordable housing," she said.
42