 We are going to convene our afternoon meeting and welcome Senator Chris Bray for his introduction and perspective on S100 as it's come over to us or will be coming over to us from Senate. Welcome Senator. Thank you. Record my name is Bray serving in the Senate. I'm sharing that resources and energy and representing Addison County. So I'm happy to come in S100 has lots of parts and pieces. I'm not sure manager what is the most useful thing for the money to hear about maybe the active 50 portions or it's your pleasure. Sure. Yeah. So we did already do a walkthrough of the bill and it would it would be great. Yes. For you to share with us maybe some of your process and engagement with the bill and yeah. Sure. So, you know, I think that the challenge for us as a resource and energy committee like yours with jurisdiction over active 50 municipal planning is how well we're preserving some of the best of our planning such yes where there's a need for accelerate development of housing and we want to do as well and we want to make it durable for the long haul not end up with regrets on how some of this worked and part of the way we avoid regresses to do plan and so for the most part we focused our work on the active 50 divisions of the bill and for to could be new to active 50 you know overarching I mean it's 53 years old. I'd say it's stood Vermont in good stead for over half a century in terms of doing awful planning includes the 10 criteria that have to be asked about the tax on land water of useful services and traffic I won't get into but I assume you're all familiar with the question whenever I talk to developers and they all acknowledge that these are good questions to ask when doing any kind of development. So there was really no disagreement about what are the good questions to ask the question was more about how do you ensure that you have the planning and there were requests to basically exempt housing from active 50 in any location up to 25 units before you trigger active 50 the current threshold is 10 units within five years within five miles. So that was sort of the most I would say the most extreme request for relief from planning and we saw lots of potential negative consequences for that for instance that one of their long term view on active 50 is that for half a century it said we want to develop in developed areas village centers towns etc and try to keep our green landscape whether it's working or recreational green and intact as opposed to sort of sprawling town town where towns just sprawl out until they're connected other towns can we keep their words centers and green spaces going. So we looked at how what's a what's a workable substitute for engaging in active 50. And we said okay well good planning is good planning it can happen at any level could be municipal could be regional could be state level. So how do we what's a sort of a test for good planning and what might we substitute for active 50. And so our work around was to say that for municipalities that had developed designated areas so designated downtown a growth center a neighbor development area a village center those are towns that were clearly interested in planning for the future and and so we said okay well how do we sort of turn over to them more our to do to handle their own development work particularly for affordable housing. So in the realm of affordable housing preferred housing projects have to be 20% affordable for a defined period of time sometimes they're affordable perpetuity and larger percentages but a minimum is 20% affordable. Those affordable units those affordable projects. If you locate them in a designated area. We would waive the active 50 required so instead of there being a threshold like the 1055 rule it we took that cap off entirely. So if you're developing priority housing project in a designated downtown growth center a new neighbor development area. There is no cap on the number of units developed without triggering active 50. So we're we are counting on municipal planning and zoning even combination of regional planning zoning regional planning to help that those projects and do develop them on lines of smart growth. That when we had finished focusing on that piece of things and then we said okay away from those designated areas we want to make sure that we're still thinking through the implications of developing because if we're starting to spread outside those areas then there is the potential for sprawl and I think I haven't yet to meet someone who said oh we do sprawl outside of towns but it is you know adjoining downtown or not downtown on the periphery of towns and still farmland and forest land and some of that particularly farmland may well be the least expensive land available for developing at some sort of scale. So we didn't want to inadvertently expedite accelerate housing and start seeing farm fields around towns or green spaces disappearing. So that's why we focus on designated areas. And in terms of how many that you know how much housing existence do we provide by taking that route. Well there are 24 designated downtown's there are 17 neighborhood development areas and six growth centers that's a relatively compact you know short list and there were folks who said well how about rural Vermont are you leaving out rural Vermont in terms of public housing. So we already have a construct another designation called you know village centers and we said okay if you step up and do a modest level of planning related to your village center and it will be redesignated as an enhanced village center and if you are enhanced village center then the the activity threshold rises from 10 to 50 for priority housing projects and that was we said that it's an upper limit for priority housing projects and village centers. So I've watched a housing project going in Bristol and it's roughly 20 units and it's taken a number of years of planning so 50 we thought was a relatively liberal interpretation of how much development you might see in a village center and there are 227 village centers all around the state. So that was let's go something planning already evidence of planning and capacity to plan demonstrated and let's for priority housing projects that include affordable housing let's lift caps that would automatically you know that otherwise would trigger activity. So in the end we end up with 274 designated locations that all can accept an accelerated level of priority housing projects. It would be wrong I mean not to say that we have concerns about what what the consequences of this would be 50 units of housing in Bristol Vermont for instance would could have a very large impact on a neighborhood traffic etc. So you do these areas do have to have planning zoning etc but we still wanted to monitor what the consequences of doing so it's sunsets. So that's July 1 of 26 and then you use another well it just sunsets at that point three years out. There was a question about how would you know that your project qualifies for this exemption. So they say in the bill you need to go to the NRB and ask for a jurisdictional opinion they'll look at your project they'll say oh you're doing priority housing in a designated area the jurisdictional opinion will indicate that you're not encumbered by Act 250 for that project. But you must complete construction has to be substantially complete within three years of that date. So it's basically a six-year window three years to get that permit or jurisdictional opinion three more years to build and the reason we put in that second substantially complete construction date was we didn't want some we didn't want to leave this system open to abuse where someone in June of 26 shows up and gets a half dozen a dozen jurisdictional opinions for projects over the county and then builds those projects over the next 1520 years having taken a temporary reprieve from Act 250 and turned it into something that lasted them decades by virtue of having gotten a pile of jurisdictional opinions that indicated exemption. So that's why there's the snap don't bite off more than you can chew it says you have three years to substantially complete. So that's the overarching thinking. We I would say we gave ground somewhat begrudgingly I'd say because again I feel like it's very easy to under appreciate the value of Act 250 to the state it's hard to see the value of things that didn't happen to a town. So I guess I think about in my 67 year lifetime I've seen exactly one building out into a green space some trees planted but I've never seen a forest grown. So these sorts of assets are easy to under appreciate and once they're lost to development they tend to be lost virtually perpetuity. So we are compromised was to say in designated areas. Let's focus affordable housing because that's the way that crisis if you describe an affordable not just a housing crisis but affordable housing crisis. So let's focus on trying to accelerate that development in those designated areas. Let's also build in a hard stop three years out gives us a chance to see how things are going and we also we built that sunset in one more thing on why we did that. We have reports coming back from the N. R. B. that the Legislature has asked for it. We have reports coming back from the N. R. B. later this year also from the agency of commerce and development on the designated program. And so if I think from a good governance point of view if we're looking to reform the designation process if we're looking to reform act 50 it doesn't seem appropriate to write permanent law in these areas while those reports are on their in development and on their way to us both from why ask for information if you're not going to use it and it also seems so like disrespectful to me to write permanent law in that area. So we said OK the sunset opens a window and during the three year period we figured we'll also get these reports and the Legislature will have a chance to look at a broader deeper sort of less crisis driven reform of act 250. It is 53 years old. So as someone pointed out to me a few people said you know it's not written in stone to which I'd say true. And it's also been amended many many times for the year. So it's been responsive. The edits you know people can characterize the edits that have accumulated over time. I do sense that there's a real opportunity for a fresh look like more of a clean slate approach and I hope that while we create this window for accelerated development of housing in designated areas that will also take advantage the reports coming back to us and put together legislation that is more comprehensive and more durable and what we're posing in S 100 to address housing. So that's sort of a short version of a lot of thinking and back and forth between competing points of view. Thank you for that. Members of questions. Representative Smith Tory and civilian. Thank you. Thank you, Senator. Well, all these changes to act 250 are going to happen. One thing that I know that hadn't changed in it is the 10,000 population. Under 10,000 people have to apply for Act 250 permit to build and over 10,000 no permit is required. Is that an advantage or a disadvantage to a smaller town? We have 4,800 people in Derby. So in the provisions that we changed, for instance, for priority housing projects population size does not come into it. So it's if you have a village center and then it enhanced village center status, which means you have bylaws and planning. You have some sort of capacity for municipal or public water. And then you also have an ongoing, you have the capacity in terms of the planning office that can administer, I guess you might say, supervise and oversee development in the town. If you have those three fundamental things, then for Derby, for instance, you could develop up to 50 units on that priority housing project without triggering active system. If it was enhanced. Yes. And you could talk more about what that entails. But again, the shorthand version is that you need zoning, you need some capacity around water, and then you put a bullet or waste, and then you need to have a planning office. It's not every small town has a planning office. Well, we have a town plan and planning commission. We've got two villages with water and sewer in each village. This 10,000 population just confuses me a little bit, because it does enter into it. It is part of Act 250. Well, there are caps related to, you know, I just want to make sure that, so for priority housing projects, the population number doesn't matter. It's just by type of designated area. I don't fully understand that, but I'd like to talk to you another time on it. Just sit down and visit about it. Representative Tory. Thank you. I have a question also about the Village Center, your hands designation. Did you all discuss that? How long that process? We didn't start out with that. If you have nothing other than the line drawn on the map for Village Center, how long will it take to get the designation? I think the conversations we had is that, for the most part, either those requirements could be met or they might be missing the water, please. And it does say public, but it doesn't necessarily mean municipal. It's a little confusing. It could be municipally supplied, but we also, in our version of describing water, Vermont is a public water supply can be privately owned. So, for instance, a developer might say, you know, there's an opportunity here and I'm going to create that water system. As a matter of fact, by testimony last year that some developers, if they actually preferred that rather than waiting for the town to go down and they found it less expensive than hooking up even to an existing water and sewer line. Because some towns have a $20,000 per connection fee associated with connected to town water and sewer. So, yes, the infrastructure may have been built, might be going right past where you're building, but because the town is interested in recovering its costs or its investment in that connection, it's not just a, it's over a significant fee. So, by the time you'd be 20,000 times X number of units, some developers said that actually we'd rather take care of this ourselves with a design that earns a good permits from A&R. Representative Sebelia. Thank you, Senator. I believe I heard you explaining some of the changes that your committee made around the designation as necessary, or giving more time. And I think you used the term allowing us to consider those and they'll be less crisis driven in three years. And so, how will that be? How will that be? How will our faces for the house will be less than three years? You know, probably that that's a reflection of my own sense that we have a housing shortage that's 40 years into making. I don't know at what point in the 40 years we cross from a shortage to a crisis. And I think I'm probably personally not a fan of calling things a crisis, I'd rather sort of take some of the heat out of it and say, yes, it's urgent. And how can we do planning? Sometimes I think crisis suggests that we're going to do things we might, that are more risky and that we might regret. And because if you're in triage mode, so you're just responding to a crisis, doing the best you can in sort of immediate term. So I think when I'm saying urgency, I'm not downplaying at all the urgency of affordable housing. And I'm also hoping that while we're opening a window in this three-year period to get affordable housing built and we'll have the opportunity to observe how things are going, make adjustments on the fly and then also pick up these two sets of reports, the ACCB report and the NRB report and look at a more comprehensive and as I said, you know, like a durable reform that isn't sort of so much triage mode, but says, how do we do this for the long haul? Because there's no way we're building 20 or 40,000 units of housing, I think in the next four years. And that's the kind of level at which I've heard that we need 20 to 40,000 units of housing in the next decade. So did you take testimony on that number and where are you from? Yeah, so I would say you might wanna check in with ACCD, Josh Hanford on that. I think he was, that number is quoted by more than one person. I'm not sure whose number it is, but it may well come out of ACCD, Mr. Hanford. If it's not a number that comes from his shop connected with the source. And the breakout I've heard is 20,000 units related to people who are already in the state of inherent local growth. And 20,000 people migrated to the state for reasons of climate change elsewhere. And it would sounds dramatic, but I have talked to people who are going door to door this year and went to lots of new doors because their district changed and they met quite a few people for the first time and they said as part of it, well, how long have you lived here? Where did you come from? Why'd you come? Just sort of one of those conversations you have when you're out doing door to door. And they met a surprising number of people who moved here because of climate change impacts where they live, wildfires and droughts out west and flooding in some other areas. So I'm not pitching that number is accurate but it was a surprise to me that it was as high as it is. And I suppose the other prudent side of it is even if it's high to be conscious of the fact that we'll face some pressure at what level I don't know. So that we're thinking about not just sort of take care of our own but seeing people move here. And then we also say we'd like to see some level of population growth because we I think now has finally passed away now and have become the oldest demographic in the U.S. So. Thank you for joining us. You're welcome. Good to see you all. If you ever want to pray for our little room down there on the first floor, it looks pretty specific but we really have to light like this. You have to have five more members if you are up here. We used to, we have the group W bench on one side. You have to use that. So thanks very much. Good to see you. If other questions crop up, you have to supply some answers. And I'll be happy to talk to you more. Great. Thank you. Appreciate it. Next step, we're going to welcome Alex Weinhagen with Vermont planners association via Zoom. Hi everyone, thanks for having me. So yes, my name is Alex Weinhagen. I'm the president of the Vermont planners association. We are a nonprofit advocacy and education professional organization with about 150 plus planners and related professionals here in Vermont. We are a section of the Northern New England chapter of the American Planning Association. We're a volunteer run organization. So my day job, which is where I'm sitting at the moment is with the town of Heinzburg. I've been the director of planning and zoning with the town of Heinzburg for a little over 20 years. And I'm not here to speak on behalf of the town today but I am here to give you some feedback from the Vermont planners association. We have a legislative committee that has been working hard to provide feedback and some thinking and information related to the housing legislation. So I've provided some written testimony which the committee system was good enough to put up on your site and I'm not going to bore you with it. I'm going to let you read through it and ask questions if you like. The topics that I really wanted to highlight today have to do with sort of higher level feedback on this effort. First of all, talk to any planner in the state and they will tell you that the housing crisis is in fact a crisis and is real. And we deal with it every day in our municipal offices with folks who have children who are looking to move back to the state and can't do it with employers who are looking to hire people and can't fill those positions because the people that they offer those positions to have no place to live, especially places that are affordable. And I can just tell you from the front porch forum traffic in my community, the number of people looking for housing is quite a lot. So the housing situation is significant and serious and the EPA appreciates the legislature trying to tackle it in multiple forms. Funding is a really important one and we've seen some real breakthroughs in that in the last couple of years thanks to the federal funding that's become available. So we generally support both bills, H68 as well as S100 and we provided testimony on the Senate side that I think S100 has been revised to address portions of that. And so if when you're thinking about, you know, which version of the bill is sort of the most current and worth starting with, it is S100. With that said, we do have concerns about about some of the big ticket items on the municipal zoning side of the equation. And I think it's important to point out that as Senator Bray said, S100 takes a very tempered approach to the state permitting reform measures, Act 250 in particular, and it focuses nearly all of those on the designated areas. So those designated village centers, designated downtowns, neighborhood development areas, that's where all of the changes in S100 are related to Act 250 flow too. But on the municipal reform sides of the bill, it's different and those changes actually flow not to areas that are absolutely part of a smart growth plan within the state of Vermont, but instead flow to municipal water and sewer service areas. And I think it's important for all of you to understand that from the planning community, it's our opinion that municipal water and sewer service areas are not synonymous with areas planned for smart growth. There are a lot of historical reasons why water and sewer lines were run in different communities at different times. And they don't always overlap with current thinking about where a community would like to grow and focus its precious resources, municipal water and sewer being two of those very precious resources. So I use my town as an example because I've been working here for a while. And the map that you'll see at the end of our testimony is a map of Heinsberg's water and sewer service area. And what you see in gray is our water and sewer service area that extends from our sort of core village area up to Vermont's largest high school, CVU high school, and up the Richmond road, which is noted on the map. Again, there are reasons why we've had the service area for decades, but when smart growth planning became an important facet of both at the state and local level in the early 90s, Heinsberg did a very good job, this was before I got here, of talking about and planning for growth within the core of our village and the immediate area around it that we refer to as our village growth area. And that area is not the same as our overall water and sewer service area. Because we're a small community, we have limited water and sewer capacity. And so where it is deployed to is extremely important in making sure that we can realize the community's vision for affordable housing. And to have that development potential spread over the entire service area runs counter to what our community vision is. And it also runs counter just in terms of practical common sense. We don't have pedestrian infrastructure along the Richmond road, which is that segment that's highlighted or circled in yellow on the map. And because of that, we're not interested in seeing high density residential development in that area. We would like to continue to allow for moderate density and people adding accessory apartments and doing smaller scale subdivisions. But we're really trying to focus our resources, again, our precious and limited resources within our village growth area, which is just a portion of that water and sewer service area. So this is one of VPA's sort of bigger concerns about the way this bill has been structured is that the municipal zoning reform side of it with regard to density allowances that the legislation would preempt local zoning and say you must allow for at least five units per acre in wherever there is municipal water and sewer. That's why that's a problematic portion of the bill for us. And it does seem to run counter to what Senator Bray was just talking about in terms of taking a temperate approach and focusing on designation areas rather than wider swaths of communities. So that's one of our concerns. We specifically our recommendation is that that we bring together planners and other allied professionals and stakeholder groups and come back in 2024 in that session with other ways to encourage more housing in ways that respect Vermont's smart growth vision. And we do feel that the two studies that Senator Bray mentioned are relevant to that conversation. So the study about the designation areas and how those could be reformed and the study by the Natural Resources Board on Act 250 reform and place-based jurisdiction. So just as it makes sense to have the information and have the conversations before you make these decisions, we feel that also makes sense on the municipal zoning side of the coin. The other difficult item for several planners that we've been talking to is this section one of the bill that deals with parking requirements. And it's boring and it's parking and who wants to talk about that. But it is true that some municipal regulations have unreasonable parking requirements that limit the ability of infill and redevelopment projects to happen. So the creation of more housing. VPA acknowledges that. And we do feel like some reform is necessary there and potentially through legislation that would preempt levels of municipal zoning. So not every community in the state would have to change their zoning to sort of get on board. But with that said, what's proposed in the legislation is also an arbitrary number. So if a zoning regulation has an arbitrary number that our housing partners say is difficult to work with, well, the numbers that are proposed in the legislation are also arbitrary. They're smaller, but they are still arbitrary. And making these determinations within a development review board setting at the local level has everything to do with determining actual need. Not an arbitrary number that happens to come out of a table in a 30 year old zoning regulation or a smaller arbitrary number that gets enacted by the legislature one year only to have to be revised potentially the next. So we do agree that something should be done on this front. And I think the numbers could be moved a bit to make it more flexible. But in the end, having these determinations be need-based and basically throwing out arbitrary parking standards I think would bring us a lot further to a real solution to this issue. So those are two of our top sort of concerns and recommendations. As I said, in the larger document that I provided you'll see a lot of other more specific recommendations tied to different sections of the bill. I'm happy to take questions on those bigger items or the smaller ones if you have any. Thank you for your testimony. Your members have questions. I'm not seeing any right now. Thank you so much for joining us. Yes, you're welcome. With that, we will invite Maura Collins to join us. Thank you very much. I believe I just asked for screen sharing a moment ago and I set up, I'll pull up a slide deck. My name is Maura Collins. I'm still the Executive Director of the Vermont Posing Finance Agency. Thankfully nothing has changed in the past week since I was last here with you. I really appreciate this opportunity to be here to talk about H68 and S100. And I'm hoping that it'll switch to slideshow in a second. So I think I'm gonna be addressing some of the questions I've already heard. I hope to be clear that I think that both H68 and S100 will meaningfully address the housing needs in our state. I'm going to talk a lot about those needs and numbers, which is why my 11-year-old encouraged me to put my presentation in emoji format at the bottom of the screen so that we can be universally accessible to all in the room. But first, I want to address the elephant in the room, which we've already heard about, which is that people are freaking out about the housing needs. And it's a bit much, even for a hoser. I'm a bit exhausted by the media acting as if the pandemic just broke the housing market on us. Pandemic did not break the housing market, nor did climate migrants, nor did... There's no one silver bullet here of what's happening, but it does feel like the sky is falling and that we are being inundated with this news. And it also is happening locally in every corner of the state and every newspaper. We can't get away from it. So I want to take us back to the numbers of just, where are we? Where do we need to be? And how will these bills help address this? So back to the basics. We have, if you add together the owner, the renter, and the seasonal housing stock in our state, we have about 320,000 homes in the state. There are estimates I'm about to explain to you that we need between 30 and 40,000 homes. I'm gonna talk about that, but even just choosing the lower number, that means that for the rest of this decade, we need to grow at about 1% a year, our housing stock. Just a timeout. How many people live in Vermont? 600 and I'm gonna round up, say 650,000. So that's, you know, house for every two people. That's what I'm gonna talk about in just a minute. Household size and that's driving some of us. Yeah. So these are how many homes we have today? When we talk about a 1% growth rate and the number of homes, it is something we've seen in Vermont. We do have a history of doing this, not in the past 20 years, but you can see in the 80s and 90s, we were growing at over 1% a year. Hasn't been what we have been doing. And this is what I wish the media and others understood, which is that we saw this shortage coming. We've been watching it play out for the last 20 years as our growth rate dropped off. We knew that we weren't building enough to keep up with demand even before the pandemic. And so this should not be a surprise to folks. Where have we been growing? Well, it's all over the place. I mean, here's a map and you can see. Now the chart in the bottom corner, it's not fair because the person who gave me this chart, they looked at the total growth and I was just putting things into an annual rate of 1%. So you can divide all those numbers by about 10 and say that, you know, Williston actually was the top community. It grew by 20% over the last decade. That's about 2% annual growth rate. All the gray towns, they really didn't grow. They've just been looking along, they've been flat. And this is, I think, why I keep getting invited to the rural caucus meetings is because a lot of these towns that are gray wish that they were growing a bit and maybe not exploding like Williston, but we're keeping up with demand here. But it's all over the place townwide about where we see growth, that's appropriate. We do not want every town in Vermont to be like Williston, even if I'm a little Williston, but I just mean like we can't treat any multiple towns the same. We have to acknowledge the variation that's always gonna happen in our communities. But there have been questions about where are these estimates about the future coming from? Because who has that crystal ball? I just this morning was asked about where interest rates are gonna be a year from now in House General. I can't answer that one either. I can't guarantee for you what Vermont's gonna look like by the end of this decade, but I can tell you that we are the source of that terrible 30 to 40,000 number. And this is where we got it. Where we got it is that every year we always talk about housing construction. Well, there's such a thing called housing destruction. Homes fall down, they come offline, the quality gets so bad, they're no longer on the market. It's not a lot of homes. It's 0.15% of our homes every year we estimate. That's a national rule of thumb people use. That's what we applied. We took the number of homes in Vermont and we said, you know what? Every year some number of them are gonna come offline. Maybe they converted to another use. Sometimes actually homes convert to commercial use. I know we are focused on the other, but that's replacing homes coming off the market. Then we have homelessness. And I think other committees are really focused on this. These folks are not counted in our housing units and they need a place to go when they move out of the hotel. So there's some of that. Obviously these are minor parts of the need. This is the question. A normal vacancy rate, I have about three slides on it. So I'm gonna dive into it because you must have questions. Everyone has questions about what's a normal vacancy rate? Why do we need it? How does it matter? And then these are the numbers that really upset people. It's the, see how this next one, the dark blue gets up to 30,000? That is VHFA looked at how much Vermont grew between 2017 and 2019. Total pre-pandemic, nothing about a lot going on. If Vermont continued to grow through 2030 at the same rate that we grew between 2017 and 2019, how many more households would there be? And there'd be about 13,000 more households. But then something happened in the pandemic. We all have theories about what, but we weren't pre-pandemic between 17 and 19. We were growing at 0.8% a year. And then in the pandemic, we doubled that. It was 1.4% a year, almost doubled it. And so if we kept up at that rate until 2030, oh my God, we need, that's the extra 10,000 people. I don't bet, but I will say in this very private setting that no one's watching on YouTube that I don't think we're gonna keep up our mid-pandemic growth rate for seven more years. I think there already was a digger article last week that said it's starting to slow. And I have a slide in a minute that's gonna show that at least the out-of-staters are starting to, it was a bell curve. It's, that's not going to necessarily continue. And so, but that's where these numbers came from. And that's why it says 30 to 40. It's cause we don't know which growth rate we're gonna have. We just put the data out for you all. And we've written two blog posts on this and I'd be happy to share more nerdy details people wanna get there. But what is healthy for a vacancy rate? These are academic standards that nationally people debate. Nerds like me care about home ownership homes and rental homes in two very different ways. And we always look at things differently. And so often we wanna rental vacancy rate to be a bit higher than our home ownership vacancy rate. But usually people like to round and so they just say a 5% vacancy rate either renter or ownership. Others would say no, a rental market churns more. People are turning over with more frequency than homeowners. And so homeowner vacancy rate could actually be lower. People will argue there's economic research to say a 3% home ownership vacancy rates appropriate to a 5% rental vacancy rate. I've had conversations with Jeff Carr and other economists who say neither of those standards are appropriate. You should look at the longterm average of a community or a state. And you should say what's that longterm norm for that area? That's what a healthy vacancy rate is. But then even Jeff and others will say, well, that's not fair because Vermont has been so chronically low and the vacancy rate for so long we've perverted our own numbers and now our longterm average is too low. But I'm giving you here the longterm averages for the state of Vermont. Sorry, you might have said this, but what's longterm? Longterm here is 10 years. We could look at 20 in it. Any way you look at this, our current vacancy rates are below any of these healthy measures. Why do we need a healthy vacancy rate? Because without it, prices go up. Supply demand, if your supply is artificially constrained or very constrained. Last year, Department of Taxes data shows that median sales price went up 15% in one year. That's the largest one year increase since they started collecting the data in the late 80s. Over the last 10 years, Department of Taxes said that every year these median home prices are going up 6% a year. When I remind us, I don't know about each of us individually, but the average is that incomes go up 3% a year. That means that home prices are going up twice as fast as incomes. And both H68 and S100 are working to better match the housing growth rate with those income increases. We want to move these two numbers in tandem. And so there's more that the legislature could do to address incomes. And I think y'all are working on that. And there's a childcare rally and other things I don't think today. But what we're trying to do is address the housing end of the equation. And that's why I'm so excited about H68 and S100. But why else do we need a healthy vacancy rate? Because without it, how long homes stay on the market plummets? This is realtor data called days on market. And you can see, I wish the information even went back further, but you can see that like in normal times, the median days that homes on the market stretches over several months. And what happens when the days on market really shrinks down? It's that this is when we get into people being, I shouldn't call them stupid, people making unwise financial decisions. They start waiving inspections. They do all cash offers are more appealing because you don't have to wait for an appraisal and you start moving very fast. It also creates a system and there's been testimony in other committees that spoke to I could only find a home because I knew a guy. And what does that kind of closed system do for equity goals as a state when you have to know a person in order to know what's going to come on the market because it never reaches the public platforms like the MLS. And so there's also information from the Department of Texas about out-of-state buyers. This undercounts the out-of-state buyers. So it would be very clear. People like me when I moved to Vermont forever ago, I rented for a year before I was able to find a home to buy. That's happening even more now because people really, they got to know a guy, didn't know a place. And so this is only counting that when someone purchases, their previous address was out of state. So it's excluding all the people who moved here and are renting here temporarily. But this is how many annually in 2019, we had about 3,000 people in the property transfer text database with an out-of-state address prior. And you can see the bell curve. Of course, I don't have 2023's data. So I just looked at the first three months of the year so that I could show you what's happening in 2023. And you can see that so far, three month universe here, but that we're getting back and that the peak really was 2021 for this out-of-state demand. The other thing is that economists will remind us that this is a housing market. It is an active market. It's not a closed market. We can't exclude people from buying in the state. We can't control this in any way. And so we will always have out-of-state buyers. And I want to be on the record as an out-of-state person. You know, I've only lived here 20 years, but I'm not from Vermont. And I won't make you all raise your hands to say if any of you maybe like me, but I'd like to think that Vermont's a little better off for some of us who weren't born within the limits. And I'd like to look, the Office of Racial Equity has a lot of data, but the newer Vermonters are more likely to be younger. They're more likely to be people of color. We know that the Vermont Futures Project says that there's 24,000 open jobs right now. We need people moving into this state, bringing their gifts and talents, their passion to this state. And we need to have some housing available to them. Sean Tester from Northeast Regional Medical Center has been testifying all over this building about the openings at medical center with really good pay where they cannot fill those positions because of housing. But to the chair's point about, wait, we only have like two people per household. Yes, that is the case. The average household size has decreased by 25% since 1960. You can see just since the green bar is the year 2000 in Vermont. And you can see that 26% of households were one person households back then. Now, 20 years later, that's up to 31%. And then look at the four or more person households. That's dropping quite a bit. And so I have a family of five. Someday those children are going to be old enough to move out. We will theoretically need four homes for the three children. And then my husband and I, that's one home right now meeting our needs. Someday we'll need four. We also know that sometimes husband and wife don't stay together. And that causes the need. That's why I'm always talking about households and not population because we need more homes as adult children move out of our homes and the like. And so household size is very important to always keep an eye on. And we can say that this shouldn't be the case. We can say that all of you should have families of five like me, which I'm a big fan of. So I think y'all should, but that's not the way the world works, the market works or anything else that we can't have people necessarily have such large households. That said, when I talk about, when I talk about needing 30,000 more homes, I do not mean building them all in our fields or anything like that. I don't mean new construction for everything. That's never been what we've said. You got to slow down and read our words slowly to see it, but you'll see that our message is that we need more homes. We don't need to build 30,000, okay? There's a lot of silly jokes, like there may be 50 ways to leave your lover, but there's only a few ways to make housing. One of them is new construction. I think it's a lot of attention, but other ones are conversions of other uses, schools, seminaries, commercial spaces, vacation homes being used as primary residences, that's ideal. I'm gonna talk about that more in a minute. And so we need to increase the number of homes in existing residential buildings, H68 and S100 do that. I read these bills and I think about those beautiful Victorians in our downtowns that are too large for the elders or the small households that are living there. And I see opportunities to maybe split them up, never changing the outside of that building, but allowing for more housing within those structures that are too big to heat and maintain and things like that. I also know that we talk a lot about elders who are over housed. And so I do the duplexing by right or going to four or five units in areas served by Water and Sewer, that these are great things that are gonna help address this. And when we look at where we are today, both in our housing market, we also have to look at where we are as a population today. And there's an economic risk to stagnancy. We know the state was downgraded in its credit rating several years ago. I keep calling myself a nerd, but I'm very proud of it. I read those credit reports and they pointed to two main reasons for it, pensions and OPEBs and demographics. And that we find in credit ratings reports all over the country, that municipalities, counties and states that invest in housing, those rating agencies notice and they will talk about them as being a reason for a potential revenue upgrade and they credit fresh demographics as being a reason why credit agencies look at high ratings and stagnant demographics will get you a lower outlook as we saw in Vermont. And so I've already spoken about the fact that when the pensions and OPEBs and demographics were the two reasons we got downgraded, the two stated reasons in the report, everyone started going, well, pensions and OPEBs, we can do something about that and we should and that's great and it's wonderful. I never quite understood why everyone kind of looked at the call that we are downgrade because of demographics and everyone goes, ah, yeah, we're old and white and there's nothing we can do about our demographics. When there is something we can do about our demographics, we can build housing. And so if we want this kind of demographic to change and have our communities be more vibrant, be more equitable and open, we can do that by offering housing throughout the state. And we can't talk about housing without shining a light on the people who are left behind and that's lower income Vermonters, but it's also BIPOC Vermonters, regardless of income. And so we need to look, here's an example of the homeownership rates by race and the blue bar is what proportion of each of these races are homeowners. And you can see that the white homeownership rate is 72%, the black or African-American rate is 24%. That is a worse statistic than if I told you the national averages. The white homeownership rate is about the same. It's within a point or two. The black homeownership rate nationally is 42%. And so we aren't even catching up. We are worse off than where we were in 1968 when we passed fair housing legislation. We have very large lot sizes. I'm excited about these bills to look at encouraging density. This gets a lot of play in the media, New York Times and others who like to point out that in New England, we have the largest lot sizes. And so encouraging density is going to make housing more affordable. And I think to almost wrap up what I'm gonna say that I think there's been a real question about do we need to build a lot more or since we have all those vacation homes, couldn't we just have those be the homes that are used as primary residences? You can see here how many vacation homes we have by town. And I would ask the question, are these the only places in Vermont if we did take that approach and say, okay, we're just gonna live in all our vacation homes and that will start to address this need? Are these in the communities that we see as the only areas that we need housing where we have these vacation homes? And that there are tax policies that the legislature can and should look at to encourage the use of, some people don't like me calling them second homes to point out these are third or fourth homes that people have, but there are things we can do to look at making it less affordable to own three or four homes in Vermont and where we're not occupying them. But at the same time, an earlier slide, the third slide I showed you showed that there were about 55,000 seasonal homes. That's the vacation homes I'm talking about here, but that's also counting our deer camps and our ski condos on the side of a mountain that are never gonna be available. And so we don't have enough data to be able to pull that 55,000 number apart. And I can't tell you how many are out-of-staters, vacant. I use it three weekends a year versus deer camps are uninsulated or don't have your own septic or any of that. I can't break the number down the way you want. I'm sorry, I will work with you all if you wanna tell someone to collect that data. But I do think that if we think that if half of the homes were maybe available for year-round use of the 55,000, even tax policy changes maybe would make half of those available. And so maybe we're making a dent of 15,000-20,000 homes that we could get our hands on. That's a one-time fix. It's not gonna keep up with our growth. It's not gonna change with us. It may not be in the right communities, but it is, that is something that we can look at. And so to wrap up, I am very excited about H68 and S100. I'm one of these people like I get so excited about whatever section of the bill I'm in. So I started writing the things I'm most excited about and then I got through another section. I was excited about that. So this doesn't really do it justice, but I wanted to focus my testimony on the data and where we are and knowing that those coming next when I wanna leave time for are gonna dig into a lot of the details. I do think that there were some really great improvements made to S100 through the process. Some of them are here about the Human Rights Commission was written up in H68 with a certain assumption, what we've heard from the commission on the Senate side and they proposed some changes. I think those are great. There's some new planning things infused into S100 that I really support. And I think that there's still some questions. I've heard senators talk about still having questions about if we're ready to look at exempting projects and duplicate permits on the water wastewater. And I've heard conflicting things there. So I just think that it'll probably be an evolving conversation. Happy to answer questions. Thank you. That was great. And we're having a little bit of time issues. I think there's gonna be a lot of questions. I'm gonna start with some that I have. So I really appreciate that you just gave a really holistic picture of the challenges and the pressures in the market. I would like to know if you are familiar with a jurisdiction. I mean, this is a national, if not, Western atmosphere challenge. Is there a jurisdiction that's actually addressed their housing shortages? I wanna say built their way out of it, but I appreciate that that's not your entire focus, but it seems to me that, and you touched on demographic challenges. I kind of like to also understand whether the projections that are up there about housing needs include the fact that we are an aging state and folks are not gonna be in those houses forever. So at some point, we may be at the perfect storm with two big demographic bubbles. The baby boomers are aging out and their kids need housing. And that's gonna be an effect for, I don't know how long, but I'm wondering if your numbers include that reality as well. So two. You're exactly right. I mean, I know that as a housing funder, we actually don't promote a lot of age specific housing and we'd rather see housing be designed for elders as opposed to be restricted to occupancy by elders. And the reason is what you're getting at, which is it's a bell curve. And while we may be at a high point of the need and demand by elders right now for housing at some point that will change. And I don't know that we'll ever see another baby boom like we saw at the baby boom. And so therefore, we don't want to for the next 40 years, age-restrict housing that someday may be occupied by folks who are younger be needed more there. So I see exactly your point. But it is hard to kind of look and say, we are gonna be in this place for easily the next 20 years. That's the numbers, the baby boom and tail impact will be impacting us for a very long time as we live longer and more independently for longer. And therefore, while that may change in the future, it's hard to say that we're not gonna address it in the meantime. The question about jurisdictions who've done it right, I don't have a favorite child in that way of that community is doing everything right. Instead, I'd like to pull what's going right in different places, the duplexing by right. Minnesota was the one to Minneapolis, I think was the first one to do this, had it in place for a while. There's an article that looked at the impact of it in the first few years, it created 100 homes. That was a pretty muted effect. I thought it was gonna do more, but first how many years? I have to double check, but yeah, I can email you back cause like, so it really wasn't the whirlwind that I thought and that might both appease the committee to hear that we're not gonna have this influx of everything going to duplexes. It also might be a little disappointing that that's not the silver bullet either. We need all of these things. That's why I like the comprehensiveness of S100 because I feel like we're pulling the threads of a lot of different things at the same time. We're looking at manufactured housing. We're looking at rental housing, we're looking at commercial, we're looking at density, looking at municipal, we're looking at equity, we're looking at funding, it's gonna take everything. There isn't one thing that we can do. There's no one community that I've ever found that's doing it best. Finland in housing first and addressing homelessness. I give a gold star two, but otherwise, I think there's a lot of places we could look that are doing some things, right? Yeah, I guess my point is that there's places that have been growing and still have all the same challenges that we have. And so, it seems to me you can't build your way out of this. That there are other structural changes and you've touched on some of them that need to be prioritized. Yeah, it's all hands on deck. We need it all. We need to do all these things. Yeah, I saw your hand represent Pat and then Sebelia. It was interesting to know what you said towards the end of your presentation. I just started wondering what information we have or don't have about the vacation home issue because I see the different categories. It's a vacation home of, let's say, some wealthy people who have a place in Vermont and they come for several months, but they're the occupants or they might rent for a couple of months to somebody. There are people who may own and have an apartment above the garage of their home and they rent that out where that's now short-term rental. And then there's the investment companies that are buying up properties and converting them. It's a hundreds of short-term rentals. So, I'm just like, when you said, when some people talk about converting, is there information about what kinds of what we would be dealing with if someone wanted to do that? We have some good data on vacancies. I'll tell you the New York Times article last summer that said Vermont has more vacant homes than anywhere. And I can't, we had to write a whole blog post to explain like, calm down people. First off, the New York Times, their dataset didn't exist. So, I don't know what they pointed to. Someone didn't edit the article well because that thing doesn't exist as a dataset, but for the best we could replicate, we do have the highest vacancy rate. If you think about all vacation homes are not year-round rentals, we've always known. Maine and Vermont for the last 60 years or more have always been the top two states that the greatest proportion of their housing stock are vacant because they're vacation homes. And so, that's not surprising that any of us who know what our market's like. The short-term rentals, hot button, everyone loves this topic. In short, these vacant seasonal homes, not all of which are year-round occupancy is 17% of our housing stock. Short-term rentals could be some of those but could also be other homes. That's 3% of our housing stock right now. It's growing. It's concentrated in about 12 towns, mostly ski towns. A lot of them are presented around this table so I want to hold space for that. Burlington is the other one besides ski towns. We have that list every town in Vermont. I can show you your data. You can see your short-term rentals buying on going back many years. We also just purchased the gold standard of this data that you can get and we're gonna be adding that for our housing data website where we're gonna know more granularly what it is. But it's a mix. My point is, is that some of those short-term rentals are, I ski at smugs. I used to, if I'd wanna stay for the weekend, I'd call smugs guest services and I'd say, can I have a condo for the weekend so I can ski? Now, I go to Airbnb to get the same condo on the side of the mountain. They're just leveraging the platform. It's not a new short-term rental. It's just smugs going, I don't have to have someone answering the phone for more. I can use this platform. So the growth in short-term rentals does not necessarily mean it's a growth in units being used as short-term rentals. Some of them, some are that, some of those investment companies though, some, they are just buying up properties and they are going to overrun our communities, especially in the ski towns in Burlington. And so the fact that you all allowed for municipalities to take control and have rules about short-term rentals was the right thing to do. So those communities that are disproportionately impacted by short-term rentals can respond, but doing something statewide for that topic, I don't think would be appropriate because it's not impacting every community the same. I've heard from a lot of Northeast Kingdom towns, where they'd never support the demand would never support the need for a hotel, but they do need places for people to stay to use kingdom trails, let's say. And so some short-term rentals in some of these communities actually helps the tourism and the economy in that market. The problem is, is if they're pushing out the year-round residents as a result, so we gotta find a, but not all short-term rentals are evil, I just wanna say, some are helping communities. So it didn't answer, I don't have exactly what you want. I can't tell you how many are evil people who use us and abuse us and leave and how many are good overmonitors who use a deer camp. I don't have it like that. I just wanna get one of these people. Yeah. Representative Sebelia. Hey Mara, thanks for your testimony. The 55,000 Vacation Homes number comes from? Census. That's seasonal use, yeah, seasonal vacant use. And so that would include not being used year-round, like I said, I just show up on the weekends and it includes, I don't have septic year-round and all those other vacancies. I'm just curious, so it seems like a low number. And so I'm just wondering about the data. I can double check to see if that's a ACS annual survey number that the census comes out with versus, but no, the decennial census also asks that. So it really is about that statewide. Which is if we have 322,000 homes total. That's a lot. 17% of our housing stock. We have, again, I keep pushing my blog, the VHFase blog, but I could send you a post that really drills down into what we know about vacation. We corroborate this, we look at US Postal Service data because they know what's vacant or not, the post folks. And so we look at that data. We look at a lot of things to try to get at vacancy, but it all kind of translates back. Two other items on that. I just will note coming from an area that has a tremendous amount of vacation homes and all those folks are not the same. I will note that our weekend residents have been tremendously supportive and helpful in helping us rebuild after natural disaster and supporting our nonprofits, et cetera. So I wouldn't paint all folks with the same brush. And I would also note that in isolated areas like our mountain vacation towns where we have a lot of this, that housing is not necessarily convenient for where employment opportunities are, which is actually more on the coast of it. So that's the case in South Dakota. Mm-hmm. Yep. Thank you. And then Sadkwitza, that way you have to. Thank you. Is this the vacation home to your highway? Is this a fault that you're addressing or is it a compliment that you're addressing? Because these people pay non-resident taxes, which helps a lot, but what are you thinking about when you're saying, is it a problem? This is the difference between this chair and that chair, which is I look at the data, I look at the reality and I report back to you what is in our housing market, what is available on our housing market and what our housing market needs. You all get to weigh that data against and with the tourism benefits of these things. I believe the Department of Tourism reported that for the southern four counties that 25% of their economy was based on tourism. And so that was several years, you can report, but that it is critical to the economy of those four counties. And so there are, as Representative Sibilia just said, there's a lot of benefits of these vacation homes. It supports our economy by giving vacationers a place to go to, not to mention Vermonters who have homes that they're using and keeps in deer camps, but vacation homes. And so it can be a benefit. And I am wise enough to know that despite me making probably the wrong joke about like we all have these thoughts about people uses of housing and the justifiable uses of housing and it's like that, it doesn't exist. I could look at an elderly single person in a giant home that's very inefficient and I could want them to move into something downtown smaller that meets their needs, service and rich, more affordable, more energy efficient. And I could judge the fact that they are not making that move. That doesn't honor the fact that I don't realize I'm asking them to change their commute, their patterns, their community, maybe their church and all that. And so I don't think that we can sort of command in the way that I wish our household sizes were larger like they used to be because it'd be a more efficient use of the housing that I care about. I can't make that happen. I can't make couples stay together and not split up or adult kids not move out. And so it just, it is the reality and as a housing market participant and observer we need to respond. We can't wish things were different than they are. We need to address the realities whether we wish it were the case or not because if we don't address the housing market demands I worry that I could come up with a few communities that I don't want to be like because I don't think that they've kept up a demand. And I think it's driven the workers who make lower wages out because at the end of the day economics and capitalism being the model we have there will be people who want to live in Vermont. And the question is what happens to the rest of us when we have to move? Forget, you know how to say if the prices go up so much and my job changes locations or my circumstances change if I need to move within the state of Vermont where do I go if I can't afford it? I'll move to my dear camps. Thank you. We are out of time. One last question. I'll let it go because I don't think it's gonna be a short answer. So maybe I can follow up. Take it up later. I think we all know I live here these days so please reach out to me, VHFA, you're welcome. I'd love, I'll be sharing blog posts and things just to follow up. All right, great. Members, we're gonna take a very short five minute break. All right, we're gonna reconvene our meeting and welcome Catherine Dimitriq from the FAPTA Vermont Association of Planning and Development Agencies. Well, thank you so much for having me. I'm Catherine Dimitriq. I'm the executive director of Northwest Regional Planning Commission. We serve Franklin and Grand Alchemist and I am the chair of the Regional Planning Commission Directors Group. What I'm gonna talk about today is a little bit of follow-up to what Maura talked about. I'm gonna take these, these housing needs that she talked about and translated to Franklin and Grand Al County recently completed a housing needs analysis. And so I'm gonna talk about what that means for Franklin and Grand Al counties which as you know are located just north of Chittenden County and are part of the Burlington Metropolitan Statistical Area which is a data source but it's also the reality of how our economy works. So we are very different from Chittenden County but we are affected by and impacted by everything that happens in Chittenden County for good and for bad. Mostly for bad. So in this past year we recently completed a housing needs analysis. It was done by Police Census and Physic Consulting firm in Vermont. And what it showed is that housing growth has actually happened in our region but like Maura noted the size of households are decreasing. So the number of households are growing faster than population. So if you have five people that move in they need more houses than they did in the past. So housing growth also was not distributed across our region equally. So two of our towns, St. Audenstown and Fairfax is where 45% of the new households were created over the past 20 years which is really pretty remarkable of our entire region. Two communities accounted for that. And in those two communities, Fairfax has water and sewer that's owned by the municipality, St. Audenstown has water and sewer available through an agreement with the city of St. Audenstown. I will note that we're not clear what the actual household growth is in St. Audenstown because at the time the census was conducted they were in the midst of a major downtown reconstruction project which tore down several buildings that were apartment buildings. And so they show as having a loss of housing units when in fact those were then rebuilt the following year. So we're interested in seeing what the new numbers will show for St. Audenstown. So if you look at that later, that's not accurate. So our median age is rising in our county. Counties just like it is across the state and our household size continues to decline. We're a little bit larger than other places in the state but we still are a declining household size. So I'm just under two and a half people per household. And then what's really striking about our data is the rise in non-family households. So if you look at the data in the year 2000 72% of our households were family households. If you look at 2020 it's only 64% of our households. So our non-family and single-person households have grown significantly both in number and in proportion of our total household units. And that's important when you think about what you need for housing which leads me to my next slide. So if you look at our housing stock our single units, single-family dwellings make up almost 80% of our housing stock in Franklin and Grand Island counties. But as I noted before, our family households are down to 64%. So there's definitely already a mismatch in terms of what we have for housing and what we need for housing in terms of the household types and the houses that we have. Household income in our region is a real stark picture when you look at it. Renter and non-family households did not achieve the same income growth from the year 2000 to 2020 as our homeowners did. So if you look at all homeowners which is the data on the left if you were in Franklin County you had a slight increase in income. If you were in Grand Isle County there was a huge increase in income for all households. But then when you break that down and you look at the renters which are on the far right in Franklin County renters only had a small income growth from 2000 to 2020. And in Grand Isle County renters actually their incomes went down. So if you look at Grand Isle County specifically there is a huge disparity between homeowners and renters. Representative Smith. Thank you and thank you. Renters, do you put renters and homeowners in an age category? Renters and homeowners have covered all of the age ranges just like there's no specific group that renters tend to be this age and homeowners tend to be this age. I'm thinking that renters are probably a younger age group that they're not. No, it really is. No, I didn't know. I don't know. Yeah, I think our data did not show that but there is definitely, there's no age is not a predictor whether you own or rent, I would say. Okay, thank you. Yeah. Good question. I thought of that previous presentation. So you did look at age. Yeah, it's not, it's in my bigger study but it's not in here. But I would say based on the data that while there may be some trends it wouldn't be a predictor for a homeowner or a renter. So I wanna talk about costs because we just talked about what happened to people's income. So this is a bit of a complicated slide but it's not really once I explain it to you. So on the left-hand side this shows the median sale price by town. The light green bar shows what the median price was in 2021. So if you look at the top one, North Hero the median sale price in 2021 was $450,000. That green dark bar to the left that's what the median sale price was in 2018. So that's how much the price of homes in North Hero as an example has gone up in three years. And so you can take that same approach and follow it down the list and see there are a couple of communities where there wasn't very much price change but overall there was a pretty significant change in the median sale price from 2018 to 2021. And then rent is a similar approach with showing the cost in 2021 and the dark green line showing where it was in 2018. Is that data based on home sales? Okay. The Department of Texas is similar to it. Yep. And so then looking at that let's think about what affordability is. So as you know affordability you've probably heard if you spend no more than 30% of your income on your housing costs you're considered to be in an affordable situation. So if you just think about your own circumstances if you get paid four times a month if a little more than one of those goes to cover your costs of housing you get the other three paychecks to cover everything else. Well, if you look at what affordability it looks like in Franklin and Grand El County we're finding that almost one in three households are spending more than 30% of their income on housing. And for renters 48% are living in unaffordable situations. And I wanna really highlight renters because the chart that's on the right hand side of the slide, the total is 48%. So you can see it comes just under 50% of renters are in unaffordable situations. But the breakdown of that as shown by the green and that's where we're on the right side. Okay, affordability, did you miss that? Okay. All right, so we'll start again. So if you look at the renters column on the right hand of the slide you see it comes to just under 48%. But if you look at how, so 48% of renters are living in places that aren't affordable. But if you look at how that's broken down the green shows the percentage of renters that are paying between 30 and 50% of their income on housing, the blue shows that of that 48% half of them are paying more than 50% of their income for housing. Now just imagine if more than two of your paychecks went to cover housing what that would do to your ability to afford the rest of your life. There's a lot here, but I'm gonna explain this one too because I thought it was an important visual to show even though there's a lot to it. So we talked about how one in three households are living in an affordable situation. That is the upper left-hand circle that you see. 31% of our overall households are cost burden. So the dark green wedge that you see is the percent that's cost burden. Well, let's go across the top and see if we break down that a little bit more. If you are age 35 or younger you're asked about age, 41% are cost burdened. If you are not white, 54% are cost burdened. Now what if we go down the left-hand side column and we look at people who are low income? So of people who are low income, 64% are cost burdened. That's the very middle circle on the far left-hand side. Now take that all the way over to non-white people who are low income, 83% are cost burdened. So 83% are paying more than 30% of their income for housing. So you can see if you go to the last bottom left-hand box of middle income, middle income households only 15% are cost burdened. It's everybody else that's having any disproportionate share of the cost burden when it comes to housing. So we're not trying to solve the problem of affordability for middle income for monitors. We're trying to solve the issue of affordability for people who are low income, who are age 65 or older, who have a disability and who aren't white. And this is who we're trying to solve this problem for of affordability. Can I ask just what the size of those circles means? It's the proportion of the proportion of total households that each one of those groups represent. Thank you. So it's kind of proportionally. Thought you'd do that. I wanted to be sure. Representative Logan. Thank you. Sir, can you back to our earlier conversation? Could you let us know please how you're defining low income? So 80% of median income, thank you. Representative. Also in terms of income for the people who are living in an unaffordable situation, does income include benefits, low income benefits that they may be receiving or is that separate from that? You know, I don't know the answer to that question off the top of my head. So I would need to find out the answer to that question for sure. And do you know what your median income is? I can look that up. I don't know. It's slightly below the state median income. I do know that. It's good with more about memorizing all these data. She's my hero. So in total, when we do, when we did this work, we actually found that of the 23,000 households that exist in Franklin and Grand Isle counties, 7,600 have unmet housing needs. So that's defined as those who are currently unhoused, people who are under housed. So we took a percentage of people who are in multi-generational households who resume the percentage of those that don't want to be there. And then it includes people who maybe need an accessible housing unit but don't have one. And there's a bunch of categories like that that came to those who are under housed. And then there are 6,600 cost burden households. So in total, 7,600 households are in a situation that is not ideal, which is a really large percentage. It's about a third of our total, a little more than a third of our total households. So what are we doing about that? So we have two projects that we're working on. One is in partnership with the Agency of Commerce and Community Development and the bylaw and modernization program. We're working with five communities in our region to look at making sure their bylaws allow for the type of housing that we need in our region. And one, it was really interesting to be working on this project at the same time as H68 and S100 because everything that we were talking about that we're encouraging municipalities to do is included in these bills. And that's why I think we were really excited about participating in conversations and supporting the bills. And you can see the recommendations meet these needs are to focus on those experiencing the disproportional impacts and to really focus on affordable housing units, especially in the missing middle. And H68 and S100 does that. They do that through the allowing duplexes everywhere. They do that through the higher density where water and sewer is. And the bills really look at encouraging and reducing barriers for the missing middle housing that we need that the data has shown we really need. In terms of specific recommendations that we have on both H68 and S100, I know Charlie Baker is planning on coming in next week to go into some real specifics, but a couple of things I'll just highlight quickly, really early is that there are a few things that aren't in the bills that we would like to recommend that be added. And one is to take each five, which is a bill that looks at regional land use plans and how they can be used to help guide state programs and permitting and incorporate pieces of that into the bills. And we also would like to recommend that the Australian ballot adoption of bylaws and plans that is an option in rural towns be stricken from statute and treat rural towns the same way urban towns are so that the legislative body adopts the town plans and the bylaws. And then finally, we will have a couple of recommendations about the Act 250 portions, including potentially extending the 2555 jurisdictional trigger to a buffer area around the designations. So not just the designations, the areas itself. And also if we're having municipalities treat duplexes and single families, towns the same, we think Act 250 should do the same. So when you're counting units for jurisdictional purposes for Act 250, a duplex should count as one instead of two. So those are a couple of things that we'll be talking about in more detail when Charlie comes back, but I just wanted Tia for you. So I guess that I have a question about your Baptist relationship to the planners EPA who we heard from. So separate Vermont planners association is made up of, there are some regional planners that participate in the Vermont planners association on my number, but the regional planning commissions have a different set of priorities probably from our different perspectives, I would say. Okay, and so your recommendations are gonna maybe not always line up. They will not always line up. There are definitely some areas where we agree and some areas where we don't. Our representative Pat. Just what you just said for the towns that have to vote by Australian ballot to adopt the template, is that because they're a small town they don't have their own separate charter and other towns that for various reasons have their own charter, they included that provision. You know, it's interesting. It's not, it isn't that. State statute actually treats urban municipalities different than rural municipalities and they give urban municipalities the ability to have a legislative body adopt the bylaws while rural municipalities, the voters can make a decision to- So be up to us if we wanted to change this. Yeah, and I just, I've always found it really interesting that rural municipalities are held to a higher standard than urban municipalities in that regard. And one of the reasons why we think that that was the time to address it is some of the great areas of municipal flexibility that were included in S100 and some in XH68 require some affirmative action on the municipality in order to take advantage of those. And I've been involved in many cases where bylaws have been voted down, not because there's actually anything bad in the bylaws but because one person with too much time on their hand convinces everybody that now you're gonna need a permit for your mailbox. And so everybody votes no. And it's just this strange, it's really a legislative function. It's not a voter function. So how is, that's, how is rural and urban defined in the context that you're- 5,000 people. I didn't know this. So we'll bring you specific language next week when Charlie comes in. We talked about it briefly. Yeah. Do members have questions? Yeah, Representative Bogart. Well, when we talk on the last slide there about especially missing middle and yet as you go up to the slide, it shows all the circles. It kind of suggests there isn't a problem for middle. But I think you're talking about two different things. Yeah, I think missing, I think the middle when you're talking about housing is different than the middle when you're talking about income. Okay, so what are you talking about when you talk about missing middle for housing? For housing, you're talking about things like accessory dwelling and it's like duplexes, like smaller homes on smaller lots that still have yards and purchase. You're talking about condominiums. You're talking about things other than single family dwellings that cost $450,000. So you're talking about a flexibility of ownership and renter possibilities in smaller footprints, smaller sizes, sometimes common ownership, sometimes common walls. Okay, so that's what you're talking about for the missing middle, but what do you talk, what is the term missing middle mean as you're using it here? It's those sorts of houses. Yeah, but who is that? Oh, who does it serve? So it's going to serve the people who are traditional, who are at or below the median income. We'll be primarily who that serves. So it's going to serve the people who work as your parent educators in your schools or who are, check out your groceries. Representative Smith. Thank you. On the chart that you had up there with the circles. Yeah. You've got large percentages of non-white, the non-white community. Are you talking, when you're referring to non-white, are you referring to African Americans and Latinos? Yeah, we're referring to black, indigenous, Asian mix races. So the census allows you to pick more than one. Anything that, so if you didn't check the white only category on the census, it refers to all of the other. Do you know what the populations are of Franklin County and Grand Ave County? We're about 50,000 all together. 15,000. 50,000. 50,000. Yeah. Mellen Hoyt. No, no, oh, you mean total non-white, the actual total number. I don't know that total number off the top of my head. I do know it's growing. And I will tell you that the increase in people who chose black, indigenous, Asian or more than one race in this census, the increase in that number was almost 100% of the population increase. That was interesting. I guess we'll go further. And Kate, you can probably help, because I know you've been involved in a lot of this, but are these families that have just recently moved or they've been here for 50 years or 60 years or does a census tell you that? It does tell you that in some of the measures, but I would say that our, that's usually done through the American Community Survey, which is more of an estimate and our population numbers are such that most of those are inaccurate. Good. All right, thank you. Yeah. Further questions? Representative Wagner. I guess just one, just to maybe, your answer will have to be a little bit anecdotal, but going back again to the circles. Like on the bottom left hand, or when it kind of shows middle income, only 15% cost burden. Is it also the case that people who might be in that category still can't find a place to live? Oh, absolutely. Yes. So listen, those are people who are there now, not necessarily those who like the job coming back. Yeah. Yeah, I'm in that category, right? So I also raised my hand, yes, because I'm in a home now that's gonna be too big for me next year because I'll have an MTS, but I'm staying. I can afford my home and I'm staying because I can't afford to move anywhere else. So the housing that I have is not gonna, it's not gonna meet my needs, but I'm staying. Or it's gonna over meet your needs. It will over meet my needs, yeah. Yeah. Yeah, and also it also includes seniors who may want to downsize or move to a different place or allow their children to move into their home while they go somewhere else. And it's really the lack of affordability is clogging up the whole market. Even if, so even if you can afford where you are right now, I may not be where you want to be. And I had to, just to add to the anecdotes, I, and after we released our housing study, we got a lot of calls from reporters and I had this great conversation with a person who had moved here, was in their 20s and renting, had moved here from Maine to take a journalist job and everything I was talking to this person about, they said, yeah, yeah, yeah. And then they ended by telling me that they were a renter because they couldn't afford to buy anything here and they ended fully meet their career here in Vermont and ended up by saying, it's almost like Vermont doesn't want me. Mary, add to that. Representative Smith. Thank you. If a person can afford $1,000 a month rent or $1,100 or whatever it is, and they have $4,000 or $5,000 in their pocket and they've got good credit, what's stopping them from buying a piece of property? I don't buy them a piece of property and then- I'm buying a home. I'm buying a home because $1,000 isn't gonna get you a home. If the median household price is $300,000, $1,000 a month isn't gonna get you a home. You could finance for 200 years, it would take. You could, yeah. If interest rates were still super low and you could finance for 60 years instead of 30, you could get your home. And also remember that at least in our region, and I think more as shown statewide, half of the people that are spending $1,000 on their rent can't afford that $1,000 and so they couldn't get a mortgage that had an equivalent payment. All right, thanks. Yeah, that was a great question. Great, thank you for your testimony. Thank you, thanks for having me in. It's an interesting testimony. Yeah, it's a very, so we have, the good news is you have two bills to look at that are gonna really do something. They're gonna solve everything but they're gonna do something. So we're gonna hear from Chris and Jacob tomorrow. Thank you both for your flexibility. See you at the same time tomorrow. Thanks. And right now we're gonna shift gears and invite Joyce Manchester to join us. Shifting gears to back to S5 and S5. Welcome. Thanks very much. Do you prefer that I run through the physical note on screen, share it on the screen or do people wanna look at it on iPads? We have it up on the webpage. So I think that's fine. If you, we can just, you walk us through it. Oh, well, hold on a second. Make sure it's up there. You do? Come for me. For viewers it's sometimes easy. Only three pages. That's true. I realized that it wasn't coming up. Okay. It hit refresh. So, yeah, I think it's fine. It's not fun. It's fine for us to walk through it on our individual devices. Okay, very good. Thank you. And I'm Joyce Manchester from the Joint Physical Office. I have been working on the Affordable Heat Act for a few years, although I must say this year I have spent less time on the Affordable Heat Act as it used to be called. I've been spending more time on the childcare bill and the paid family leave bill, but in any event, here we are. And back in mid-March, I did put together this fiscal note on the current version of S5. And the thing to realize about the bill is that it's very much focused on the next fiscal year. So the fiscal impact is limited because basically the PUC and the Public Service Department are gearing up to be able to eventually implement the Affordable Heat Act. So the fiscal impact is, how shall I say this? Not huge in the coming year. It's basically administrative costs hiring some people and getting some studies underway and so forth. That does not mean to say that this would be the ongoing fiscal impact. So just keep that in mind. So I think you've done a walkthrough of the bill with Ellen. So you sort of understand what's going on. I hope we always include a very short fiscal, I'm sorry, a very short bill summary in our fiscal notes. And so I'll start off with that. So the bill would establish the clean heat standard to reduce Vermont's greenhouse gas emissions from the thermal, but I think of as the heating sector, also the cooling sector, the Public Utility Commission would administer the clean heat standard with assistance from two advisory groups, the technical advisory group or TAG as they call it and the equity advisory group. The Department of Public Service would be a partner in providing assistance and in verifying and evaluating the clean heat credit claims. So that's what the bill is trying to do. It's trying to set up those two departments. The PUC, National State Departments, is trying to set up the PUC and the Department of Public Service to be able to implement the clean heat standard. So the fiscal impact, JFO estimates that the bill would have a $1.725 million fiscal impact on the general fund. So this is all general fund spending in fiscal year 2024. And here I say, as a hint, the fiscal impact of the bill would likely be greater in future years because of increased investments over time. So the two appropriations from the general fund for the coming fiscal year, FY24, would be $825,000 for the Public Utility Commission to pay for three new full-time positions. Consultants for DMs for the two advisory group members, marketing and public outreach and translation services, and $900,000 for the Department of Public Service to pay for three new positions, consultants, and funding to complete the potential study and economic modeling. And many people think that that potential study with economic modeling is really important to be able to understand what we need to do as a state going forward. Okay, and now I no longer need to say that this appropriation reflects a recent request from the Department of Public Service. We were very slow in getting their appropriation request. So there were some other numbers floating around until the day that this fiscal note was released. So that's why that sentence is in there. So that's the basic outline. And we can go through this in more detail or you can start asking questions either way. Do you have a preference? More detail would be good. Okay. Okay, so I'm gonna run through this background on the clean heat standard. And if there are questions along the way, I will try to answer them. This is supposed to be a bit more detailed but not super in-depth on what the clean heat standard is trying to do. So first off, there are obligated parties. And these obligated parties include the regulated natural gas utilities that serve customers in Vermont. Also entities that import other heating fuels for consumption within Vermont. And also entities that produce, refine, manufacture or compound other heating fuels within Vermont for consumption in Vermont. So anybody who brings energy into the state would be subject to these clean heat credits. And those clean heat credits are assigned by the commission by the PUC based on the Global Warming Solutions Act requirements. They'll be ramping up more and more clean heat credits over time in order to get us to the greenhouse gas reductions that we need. Are you reading from page one of this? I'm still at the very bottom of page one. I'm reading the obligated parties are down in the footnote if you're looking for that. I'm looking for what you're reading. Yes. I have it up, I guess, please. All right, the other question is, do you interrupt the flow with all the detail or do you stick it in the footnote? Exactly. Okay, and what exactly are the clean heat credits? Well, they are a tradable, non-tangible commodity that represents the amount of greenhouse gas emission reductions caused by a clean heat measure. Okay, so you can think of installing a heat pump as being worth a certain number of clean heat credits. Or you can think of weatherizing a home as being worth a certain number of clean heat credits. So the folks who are importing oil to be burned in homes will be assigned a certain number of clean heat credits that they have to retire. In other words, they have to weatherize a certain number of homes or install a certain number of heat pumps or they have to pay somebody else to do those things. Weatherize homes or install heat pumps and install hot water heat pumps and so on. So that's the basic gist. Okay, so I just told you that the PUC is the group that would establish the number of clean heat credits and obligated parties must retire each year. Okay, I think we're good. All right, now we can go into the sections of the bills to see exactly where the fiscal impacts are. So in section three, we have the clean heat standard that gets defined and established and the clean heat credit system. So credits are based on life cycle greenhouse gas emission reductions that result from the delivery of eligible clean heat measures to end use customers in Vermont. So that's what I was saying. If you install a heat pump, if you weatherize a home, if you convert somebody from a oil burning stove to a pellet stove, that sort of thing. All those are worth a certain amount of clean heat credits and the rules for those credits will be established by the PUC based on these contracts that they will undertake given the financing in this bill. Okay, yes, the PUC will adopt rules to implement and enforce the clean heat standard program, including establishing the number of credits. Right, I've seen that before. Okay, so making annual requirements understandable to the public will include using translation services. And this is a last minute addition as well. So we have money in the bill. Take care of those translation services. It is a requirement in the bill that each obligated party will retire at least 16% of their assigned credits from customers with low income and another 16% from customers with moderate. Get the paddles out again. I think why? Oh my goodness. Which paddles? Let's leave. We're back here. That was a wake-up message. It does feel like it, right? It worked that way. Yeah, I think you're playing that. It's the request for paddles. Okay, so we have 32% of their credits going to low and moderate incomes and half of that 32% of the credits must go to capital investments that will last at least 10 years and lower energy bills. This is all in S5. And then we have the Department of Public Service whose job it is to verify and evaluate the clean heat credit claims. Okay, so entities will submit their clean heat credits through DPS. DPS will then take a look and make sure that they will result in reductions in greenhouse gas emissions. And the PUC may hire a consultant to evaluate, develop, or support a means for tracking clean heat credits and clients. Okay, I'll keep going if there are no questions. Section three also establishes those two advisory groups to help the PUC. So we have the technical advisory group and the equity advisory group. As you would expect, the technical advisory group establishes and revises the methodology used to determine each obligated party's annual requirement and establish credit values for each year of an installed heat measures expected life. The TAG, the technical advisory group will provide feedback on the work of the consultant hired by the commission to develop assumptions and methods relevant to clean heat measures and life cycle emissions analyses. And the way the proteams work is that you get a proteam if you're not otherwise paid by your employer. So state employees who might be on this technical advisory group would not get extra payments. Anybody whose employer reimburses them for time spent in government service would not receive the protein other folks would. And then we have the equity advisory group to assist the commission in ensuring that an equitable share of clean heat measures is delivered to Vermonters with low and moderate income. And that Vermonters who are not early participants in clean heat measures are not negatively impacted in their ability to afford heating fuel. I think the second part of that is going to be very challenging because you can expect that the price of oil and traditional fossil fuel energy sources, those prices are going to rise as the price of these clean heat credits goes up. Because the importer of oil, let's say, will have to pay higher and higher prices to get somebody to install more and more and more heat pumps, let's say, or whether it's more homes or whatever. And they're going to pass that higher price of clean heat credits along to their customers, presumably in order to be able to pay that. So you can think that that's the increase in the price of fossil fuels over time and how to protect the low and moderate income folks who have not yet made the switch to energy-efficient methods of heating cooling will be a challenge. Representative Smith. Or unable to make the switch financially. So, yes, but the folks who are assigned to the, let's see, the folks who are assigned the clean heat credits must find a way to use 16% of them on low-income folks, which means they are going to make it worthwhile for the low-income folks to install the heat pumps or weather eyes or whatever, right? So they may have to take a lower price, not the market price for that job, right? How can they keep surviving if they take, so if they don't make the money that they need to make to keep their business operating? So it's the entire business you need to think about if they're not making money on installing the heat pumps through low-income folks, they'll either raise the prices on heat pumps for the folks who can pay full price or they'll raise the price of their oil flows, right? I mean, somehow they're going to make their business whole or go out of business, right? Thank you. Yes, the market will work, we think, we hope, we expect. Okay, and yes, we have prudence and expenses, right? Okay, we'll move on to section six. This concerns how the commission will implement the clean heat standard, commission will hire a facilitator to help with public engagement, advertise, at least six public hearings or workshops, and provide at least three opportunities for the submission of written comments. This section also requires that the commission deliver several reports to the general assembly or committees of jurisdiction. And there's a note later on in the fiscal note that says it will be very important for those committees, that means you, and the general assembly to pay attention to the reports because that will tell you how well the system is working. Is it really reducing greenhouse gas emissions? And is it doing so without having a negative effect or severely negative effects on certain segments of the population? That will be really important. Okay, section seven establishes three new positions in the PUC and two new positions in the Department of Public Service. It appropriates 1.725 million from the general fund, which is what we talked about before. Okay, now my job at JFO is to tell you more about the appropriations. So $825,000 from the general fund is going to the PUC, three new positions, any consultants and the marketing public outreach. And you can see that in table one, where we have the nice JFO colors, green, blue. Are there any questions about those? I think it's pretty clear, table. The 900,000 appropriation to the Department of Public Service covers three new positions, consultants to support verification and evaluation, and funding for the potential study and economic modeling. And here I would note that the 250,000 for the potential study and economic modeling would be for the first year only. So we don't expect that to continue beyond the first year. The positions, the consultants, most of the spending up in table one, those are expected to continue. And all that funding comes from the general fund. Good. Okay, so now we move on to the impact on Vermont's economy. And here I am relying, I, JFO is relying on the Pathways Analysis Report that was completed for the Vermont Climate Council as part of their work. And their estimate was that reducing greenhouse gas emissions in Vermont, in line with the Global Warming Solutions Act requirements, would offer $6.4 billion in net benefits by 2050 compared to business as usual. Now, some people say, well, business as usual has changed relative to when this report was done. And that is true. There's more federal funding. I think Sarah Clark talked to you today sometime about the various provisions. That would impact the thermal sector. Business as usual has changed. And so the $6.4 billion might differ a little bit. I don't think it's going to differ a heck of a lot. But the clean heat standard is important in reducing greenhouse gas emissions in the thermal sector, one of the largest sectors for emitting greenhouse gas. So, and then I say, although additional costs and investments will be required to reduce emissions as required in the Global Warming Solutions Act, the avoided costs for fossil fuels together with the avoided economic health and environmental damages are expected to yield net significant benefits by 2050. Okay, so that's to say, yes, we have to invest a lot of money in order to get where we need to be. But if we invest that money, the net benefits will be positive based on the best thinking out there. Not JFO's thinking. JFO has no thinking on that subject, let me just say. Okay, so here is the paragraph, the final paragraph where it says, it will be important to monitor how the clean heat standard is implemented and administered and how the state can ameliorate possible negative effects on households and businesses with special attention to households with low and moderate incomes. Okay, so this is a little reminder that it's not going to be perfectly smooth sailing out there. There will have to be some adjustments along the way to make sure that low and moderate income households and businesses are not negatively affected more than they need to be. And then I talk about the critical roles that various players will have as the scenario plays out. That includes the Public Utility Commission, the Department of Public Service, wholesale fuel dealers and natural gas utilities and the households and businesses that will be forced to choose how to heat and cool their homes and businesses as we go forward. So it's going to take a lot of people saying, yes, I want heat pumps, yes, I want weatherization, so forth and so on. More and more and more people as time goes on in order to get to where we need to be. And then here's the sentence for you. The General Assembly will have an important oversight role in monitoring implementations and reviewing and responding to the frequent reports and recommendations from the Commission. So that's the fiscal note. All right, do members have questions? Representative Powell. To the long-term fiscal net benefit that you mentioned, if that was based on the data from two years ago, I think you said, how much of that is based on the avoided cost of fuel because fuel has gone up a dollar or $2 a gallon? Yes, but that's a long-term look at expectations of what fuel prices will be. And so two years ago, they were still expected to go up. They might have gone up really fast in your term, but I would expect that the long-term path is not terribly different from what it was. Representative Bogart. The 6.4 billion. That adheres to the entirety of the global warming solution cycle. Absolutely, yes. And we have a number for justice section. I do not. Yeah, I do not. So I don't even know if that would be possible to break out. Okay. Thank you for your testimony. Good. Thank you. Thanks. All right, members, that completes our work for the day.