By Ellen Pratt, Commons News, published Wednesday, August 23, 2023
BRATTLEBORO — If plans come to fruition, more than 600 mixed-income units would be added to the area’s housing stock, which comes as welcome news to those working to address the urgent need for more housing in Windham County and throughout the state.
With the end of the state’s pandemic-era temporary shelter program, 113 households living in local motels have until April 1, 2024 to find housing or face eviction. An unknown number of households are sheltering in tents in the area.
Employers can’t attract and retain workers due to a lack of housing. Brattleboro Housing Partnerships reports a five-year wait for low-income housing. There’s a loss of housing due to conversions to short-term rentals like Airbnb. And market pressures have priced people out of rentals and homeownership.
In Brattleboro alone, there’s a pressing need for more than 500 units, according to the town’s 2021 Housing Action Plan, with 60% of those needed for those with incomes under $50,000.
“That’s a very conservative estimate,” says Sue Fillion, Brattleboro’s planning director, who worked on the development of the plan. “And that’s not even looking at the future.”
Private and nonprofit developers highlighted their efforts to create housing at a recent meeting of the Housing Coalition of Southeastern Vermont, a cross-sector planning body focused on housing and homelessness in the region.
Development is redevelopment
M&S Development LLC of Brattleboro is planning to create up to 150 primarily market-rate apartments in its redevelopment of the eight slate-sided buildings that were once home to the Estey Organ Company on Birge Street in Brattleboro.
“It’s a truism that Vermont development is redevelopment,” Craig Miskovich, a principal of M & S Development, said to meeting participants. “It often only makes sense to redevelop existing structures with existing water, sewer, and public way access.”
The Estey Organ complex, which housed the headquarters of the leading manufacturer of reed organs from the late 1800s to the mid-1900s, fits this description.
The project will use historic preservation tax credits as part of its financing strategy. According to Miskovich, the buildings will not all come online at once due to the constraints on construction labor and the unique nature of the campus.
Miskovich cited high construction costs relative to the value of final projects as a challenge for developers.
“I used to say we had a 300:100 problem in Vermont – that it cost $300 a square foot to build something that was only worth $100 when you were done. Bridging that gap was always very difficult,” he said.
“But now we have a 450:150 problem, and I’m not sure we’re closing the gap,” Miskovich added.
“We need to build more efficiently,” he said. “And we need to have a higher asset value for developers so that we can borrow more money and rely less on the largesse of the state. We want to be able to expand the number of units in the community and drive down the cost of those units through old-fashioned supply and demand.”
“Folks who care about housing need to care even a little more,” Miskovich said when asked how housing advocates can help ease the housing crisis. “We need to populate development review boards, district environmental commissions, and selectboards in our communities.”
Another M & S Development project at 47 Flat St. in Brattleboro is nearing completion.
“We’re super excited to get heads in beds this fall,” said Skye Morse, vice president and principal at M & S. The former Sanel building on Flat Street will become 15 apartments, priced for access by households making $20,000 to $40,000 a year.
M & S also brought 35 housing units online earlier this year through the redevelopment of Holton Home in Brattleboro. The apartments house nurses who work at the Brattleboro Retreat.
“Those are 35 workers in our community who would otherwise be taking housing away from other folks,” Morse said. “Our philosophy is that every little bit helps.”
New funding sources needed to create affordable housing
Morse described challenges to building housing in the area.
“We’re using the same building materials as you would in Chittenden County or New York City, but our labor costs are actually more expensive because we have to truck in our labor here,” he said.
One concept that comes into play is that federal subsidies for housing are based on a county’s median family income.
In a clarification after the meeting, Morse gave The Commons a more detailed crash course in this conundrum from a developer’s perspective.
The math involved in getting housing built will be tough to swallow for those who have long asserted that rents in the area are rising without direct relation to the capacity of the workforce to pay them. From the perspective of the developer, they’re low.
“The reality is that while rents may feel high compared to our incomes, they are in fact quite low compared to rents in other more prosperous places, and they’re certainly far too low compared to the cost of construction in 2023, and thus we have nearly zero market-rate housing units being created despite the overwhelming demand,” Morse told The Commons.
He asserts that “because we don’t have enough well-paying jobs in our area, we don’t have enough well-paid people who can pay rents that are high enough to justify the cost of construction in today’s construction cost environment.”
“If we look at two identical projects (same size, construction cost, operating cost, etc.), except one is in Brattleboro and one is in Burlington, the one in Burlington would be able to be funded and built much more easily because they can borrow enough to cover the cost of construction not already covered by tax credits and grants,” Morse said.
This is because the rents in Chittenden County are higher than those in Windham County, and because “debt is a function of net income (to the project) and their net income is higher because they have higher rents,” he continued.
“Our rents, on the other hand, and thus the net income to a building built in Brattleboro, are so much lower that the project in Brattleboro would likely not be able to borrow enough money to fully fund the cost of construction, and thus would not be built,” he said.
“And there you have it,” he said. “We have a housing crisis because we don’t have well-paying jobs, and as a result, our rents (which are a function of median family income) are too low to cover the cost of construction in the 21st century.”
“I would love to see the state of Vermont do something for rural communities to even that out,” Morse told the meeting participants when discussing these same economic dynamics. “There’s no offsetting funding source to build housing here.”
High property taxes – usually the biggest cost in a project’s budget – “are another challenge,” Morse said.
“We already have property tax benefits for low-income housing,” Morse said. “But if we want to build housing other than just low-income housing, some property tax relief could actually go a long way, even if it’s just temporary, towards incentivizing housing. That’s very common elsewhere in the country.”
One example: the city of Cincinnati, Ohio, offers a 10-to-15-year tax abatement that allows property owners to invest in new construction and other improvements while paying taxes on the pre-improvement property value. Further tax discounts provide incentives for construction that complies with standards for environmentally sensitive building.
Morse praised the state for its ability to create housing.
“There’s such a groundswell of support for getting things done,” he said. “Funders are creative, and we have a great group of housing creators in Vermont. In such a small state it’s easy to know everybody or to get to know them. And that moves things along quickly.”
Putney project gets the green light
Windham & Windsor Housing Trust (WWHT) will be adding 25 apartments to the area’s housing stock through its development project on a vacant lot across from the Putney Food Co-op.
After a year-and-a-half appeals process, the Vermont Supreme Court affirmed that the project’s permit was in good standing, rejecting a local resident’s request for a five-judge panel re-review of the three-judge panel’s decision.
Opposition to the project has not abated, with petitions still circulating.
“We expect to start construction in the spring,” Elizabeth Bridgewater, WWHT’s executive director, said at the Housing Coalition meeting. “There will be two buildings with a mix of one- and two-bedroom units, and a couple of studios, trending towards the smaller household size that we’re seeing in the region.”
Several units, she said, “will be set aside for folks exiting homelessness.”
“We’re also developing an office for us there because we’ve got some other presence in Putney and no office space,” Bridgewater said. “It’ll be great to have some ability to be on site more often, and I think it’ll be really good for the residents who live there.”
Thirty-two more affordable housing units are in the pipeline in Windham County, Bridgewater reported. These units are funded through the Vermont Housing Improvement Program (VHIP), which WWHT manages in the area.
VHIP offers grants of up to $50,000 per unit for repairs needed to bring vacant rental units up to Vermont Rental Housing Health Code guidelines, add new units to an existing building, or create an accessory dwelling unit (ADU) on an owner-occupied property.
“The new ADU grant program is an exciting development,” Bridgewater said, “but it’s also a challenging one because homeowners often don’t have any experience being landlords and need a little bit more hand holding than some other property owners who might have more experience in that space.”
Bridgewater referenced three additional projects in the feasibility stage in Windham County. These projects could add up to 100 more housing units to the area’s stock.
‘An awful waste of public resources’
When asked about the challenges to building housing in the area, Bridgewater stressed the importance of being vocal about supporting housing development.
“I’m passionate about people raising their voices in support of new homes in the community,” she said. “Opponents of affordable housing are getting more organized and savvy about using the legal system to delay development.”
“One resident with a $250 application fee and no legal argument was able to delay our Putney project for a year and a half,” she asserted.
The battle – which opponents have insisted was primarily about the project’s location on open space at the edge of downtown Putney on Route 5 – added $50,000 of legal costs to the project’s bottom line, and while the project was delayed, construction costs were escalating. When the WWHT updated the budget a year and a half later, the bricks-and-mortar costs increased by more than $1 million.
“Not to mention the opportunity costs for the folks who didn’t have housing in that time,” Bridgewater said.
“This is an awful waste of public resources which could have been used for the creation of housing here in Windham County or somewhere else in Vermont,” she continued.
“If this money had been allocated to a program like VHIP, for example, it would have funded the rehab of over 33 apartments and we’d already have the 25 new homes in Putney built,” Bridgewater said.
The consequences of this ultimately failed effort are very real.
“What’s most dismaying is that the rental households who desperately need a home didn’t have a voice at the table,” she said.
Such potential residents, Bridgewater added, “either live in Putney and can’t afford to stay, or live elsewhere in Windham County and would like to live in Putney. They may be the retail clerk, the custodian, the administrative assistant, the home health care worker, or a retired senior on a fixed income. Some may not even have a place to call home right now.”
Josh Hanford, commissioner of housing and community development, told meeting participants that current statutes doesn’t require a burden of proof that a party is harmed by a decision before filing an appeal.
“I think that’s an area that needs more discussion,” he said, noting updates by the Legislature of Act 250, the state’s notoriously strict planning and environmental laws.
“But the appeals process didn’t get enough attention,” Hanford said.
“There are some minor things we can do that still allow individuals to have access to the process and aren’t overly burdensome, but that require a little more burden of proof,” he said.
Flood mitigation leads to redevelopment
Brattleboro Housing Partnerships (BHP), which owns Melrose Terrace in West Brattleboro, is looking to redevelop five buildings that remain on the property after 60 apartments were badly damaged in the flooding during Tropical Storm Irene.
“We have the capacity for 26 one-bedroom units,” reported Christine Hazard, BHP’s executive director. “The BHP is now looking to redevelop housing on the remaining acreage which is out of the flood plain.”
After Irene, the nonprofit relocated former residents of Melrose Terrace, built in 1962 and predating either the town’s or the federal government’s flood plain maps.
Ultimately, two new housing complexes took form as Red Clover Commons on Fairground Road. Eleven Melrose Terrace structures that were built in the flood plain were demolished.
“Now we’re completing a large flood mitigation project along the Whetstone Brook,” Hazard continued. “We got to try it out last month during the rains, and it was extremely successful.”
That project retained 4.5 acres of water in Brattleboro, “which really helped to eliminate a lot of flooding upstream and downstream,” she said.
That flood control, in turn, “prevented some people from losing some of their housing,” Hazard said.
With a proposal to build 350 mixed-income housing units, commercial space, indoor recreation facilities, and a community center on its Brattleboro campus, the Winston Prouty Center for Child and Family Development is thinking big.
The 180-acre campus, which formerly housed the Austine School for the Deaf, is now home to 45 individuals, businesses, and nonprofit organizations.
“We want to build an inclusive neighborhood for our community,” Chloe Learey, director of the Winston Prouty Center, told meeting participants. “A lot of people ask, ‘Is this going to be affordable housing? Is it going to be for seniors? Is it going to be for families?’ And the answer is yes. It’s going to be a neighborhood that reflects our community,” she said.
“Nobody’s going to be excluded because they don’t make enough money,” Learey said. “The research shows that truly mixed-income development is really best for community building.”
“We’re stewarding this property that’s been around for years,” she added. “It’s really our community’s asset, and we’re happy to take the lead on it, but we need all of our community behind us cheering us on.”
Winston Prouty Center has hired a development consultant to help determine project costs.
“In really broad brushstrokes, we’re estimating the cost to be about $275 million,” Learey said. “There will be some redevelopment and some new construction.”
Brattleboro Planning Director Sue Fillion reflected on all of the local housing development initiatives reported at the meeting.
“We’re encouraged that there are several large housing projects being planned in Brattleboro, and we’re excited that all price points are being planned for,” she said.
“But it’s going to take some time for the housing to come online,” she warned. “So we’re still very much in a housing crunch.”
This News item by Ellen Pratt was written for The Commons.