 Before we move on to missing middle. I just would like. Ellen, your name has been invoked. In terms of maybe knowing more. About the history of taking. We're moving. In one of the drafts removing. The community wastewater system. Could you educate us a little bit about this issue perhaps. No. I guess I would just add so the. Can you, can you be more specific? What community. The. What section are you talking about? Um, Section to a, I think. Oh, oh, oh, from that, from the neighborhood, the neighborhood, the designated neighborhood development area. Requirements. Right. Yeah. Oh, okay. And you wanted to know what. I just wanted to understand. Peter mentioned you being involved in some meetings around this. And I just wanted to understand. What's going on. My understanding is that it's. That in five 11. The stakeholders got together and they saw this as. An impediment. Housing development. And so I'm just trying to understand. Why. It may have been part of the requirements. For designation and what's the ramifications potentially of taking it. Senator, I was in, I was in those discussions as well. And it's simply a technical correction. It's simply that. It's just a technical correction. It's just a technical correction. And it's just a technical correction. So if you're talking about those, you're going to need a permit to have any sort of wastewater. Um, location. I mean, we as a group, I believe Ellen was on some of these, the, um, Regina. Um, that, uh, Bennington regional planning commission executive director and others debated this over and over there, whether we should just leave the language. Because then it. People wouldn't feel like we're taking away a requirement to have a permitted wastewater system. And in some locales, folks may, um, have a wastewater solution in a neighborhood development area. That isn't technically a, an alternative system. And that still may work and they'll still have to get a permit. So that calling it out those specific elements served no purpose because your course, you're going to have to have a permitted system in order to put new housing units in it. So it's not really meant to, I think, give people this much pause, put it back in, leave it out. The end result is the same. You're going to need permits in order to build housing units in those areas. But I thought the way I. Was reading as a layperson. The permits you would need, uh, under existing law to have the designation had to be sort of. Congregate or community based and taking it out. Does that allow. Development where every home has its own wastewater system. Um, I really wouldn't work in most situations, but there may be a double lot that you can expand the number of units by having a shared system and certain. It's just giving more options to meet the required wastewater requirements of any housing development in a dense area. Um, if you want more technical, I think the folks that were debating whether to leave as is, or just take this out because it, you know, I don't know why the sort of policy folks suggest to just take it out because it wasn't really serving as much of a purpose. I'm not an expert in this area. Just, I remember those conversations clearly. It sounds like they, it sounds like they were painful. I would just add respectfully, I disagree with what the commissioner just said. I don't think this could be considered a technical correction in any way. So, I'm not going to talk about the requirements for what a neighborhood does. A neighborhood would need to be designated under the state requirements. So this is what the municipality needs to demonstrate they have before they can get that requirement. Uh, uh, before they can get their designation, having the designation that opens up. Um, these areas for incentives. Yes. This is requiring that the municipality demonstrate up front that there is already infrastructure in place, whether that be municipal infrastructure or an alternative system. Um, so it's demonstrating that this area already has infrastructure for wastewater in place before they receive the designation and therefore the incentives. And that's exactly the point that this may be looked at is, oh, we don't have those. So nevermind. We're not going to pursue this designation and go through the planning that will ultimately require them to get a system that meets a permit. And so if you, you know, it could be looked at as a disincentive to pursue the designation because we don't already have this in place. And so this was the planner debate. Well, take it out because once they get the designation in order to incur that development, they're going to have to get an approved system to make it all work. And so it was looked at as a, a first stop barrier. Um, and the conversations I was on, no one in the sort of planning world was feeling like we were giving away permits or encouraging less development in these areas. It was simply giving people, um, a chance to pursue this designation without feeling like they already needed to have, um, systems in place that they would need to put in place before housing could be built because, you know, the requirements of the designation area all speak about more dense development in very rural areas that don't have it. Um, so it's really not, I think as big of put it back in, take it out. I think that the community debated this. And I think I was one that said, if we take this out, it's going to be perceived as we got rid of a bunch of, um, requirements for building that that's not the case here. And so if it's so is confusion, I don't think it's helpful. Okay. Thank you commissioner, but that was not exactly what I was related to what I was saying, but this is about the requirements on the town. So yes, permits will be needed for wastewater. Um, if the town doesn't have the infrastructure in place as is required under this designation currently moving forward, if you remove that requirement, yes, development that is added will need to get a permit from ANR, but this is removing the requirement on the town. And I do think yes, that it is currently a barrier to towns getting it because the infrastructure may not be in place in all of these towns currently. So. That is part of the discussion as well. These are the requirements that the town needs to demonstrate to get the designation. Okay. It sounds like, uh, it's a, it's certainly an interesting argument. But it doesn't seem like the advocates for taking it out care that much about taking it out. So we'll have a committee discussion and make a decision. That's why we get paid the big bucks. So, uh, anyhow, um, let's move on to missing middle. Um, I'm going to start off with let's, oh no, I, I'm sorry. We have Graham Campbell here from JFO, uh, to give us a brief update on his projections on, um, Uh, On, uh, the. Removal of sales and use tax on building materials for PHP products. I work with the joint fiscal office and I was asked by, uh, Senator Rockin to look into, um, A sales tax exemption on building materials for housing project or for priority housing projects. Um, I worked with the Pat, Senator in our office to look at this. And I also want to quickly say, thank you to, uh, Chris Cochran, Jen Holler and Kathy buyer, who helped me a lot on this estimate. Um, I was like doing housing stuff because the, because the group is so helpful in this world. So more or less at that rate to the point, we estimate that this would reduce sales tax revenues by $1.25 million in fiscal year 23, if enacted in fiscal year 23, and then growing to about $1.75 to $2 million per year, beginning in fiscal year 24. Because this is the sales tax, it impacts the education fund solely. And $1.25 million is under half a penny roughly on the average homestead tax rate. I wanna emphasize that this estimate was based upon information provided by Chris and Jen. But it is, I guess what I would say is subject to a lot of uncertainty to the extent that we see a lot more priority housing projects getting built. It doesn't take much to make this estimate larger or smaller is what I would say. So based upon the figures that I have, more or less for every average priority housing project that gets built, an average one that we estimate would cost the Ed fund and sales tax about $200,000. So it doesn't take many more. So if we add three, four additional priority housing projects above this estimate, you're talking an extra $800,000 or so. So be less than that. This is sort of our best guess estimate. So, but I wanna sort of give the committee our sense of the level of uncertainty that this would have. So I guess we'll wrap it up. Yeah. Couple of questions. In terms of implementation, is there anything magical or unusual that, you know, how an individual builder going into lows and buying stuff, is that a tried and true thing to get the exemption and to track it? And I understand like nonprofits probably go in and don't have sales tax imposed on building materials. They buy, is there any complication in that regard? With respect to just this exemption, I don't think this exemption creates any more complexity with respect to the sales tax on building materials. I think sales tax is paid on building materials in general, it is sort of a complex area. As you mentioned, you know, if a contractor goes into lows and buys supplies, they are more, they are almost certain to pay the sales tax on that. But if a contractor is working, you know, directly with someone, because the contractor is the final sale in that case, but if they are sort of buying and then, you know, handing it off or if they're distributor of sorts, then the sales tax gets paid there. So I would say, I don't think I am prepared enough to speak to this committee exactly how the sales tax applies to every case in building materials. But I can say that that's a somewhat complicated area of sales tax law, but I don't think it's complicated by this exemption. I think that's another factor, as you mentioned, the nonprofit aspect of this is an area that does create additional uncertainty here. Nonprofits generally are exempt from the sales tax. However, it's my understanding speaking with the advocates in this area that sometimes the nonprofit, while they're sort of overseeing the project, it's actually built by sort of a private developer of sorts. And so they would be subject to the sales tax. So to the extent that nonprofits do actually are, you know, hiring their own crews and building, then they would be exempt. But if they are sort of contracting out with a private entity, then they would pay sales tax. And so sort of trying to shave out those types of builds from this estimate was something that we tried to do, but it's, I guess, subject to a lot of uncertainty. But that is something that we accounted for is that sort of relationship. Did you know enough to give us an estimate of what percentage savings there would be on the cost of an overall project by eliminating the sales and use tax on building supplies? On an average project? Well, on a project, how does the 6% saving on building, I guess what percentage of a typical project is building supplies? I mean, are we saving 1% of the cost of the project? Are we saving 3% of the cost of the project? Yeah, so it's a little difficult to know exactly, but generally what I've been told is about half of the total development cost is construction materials. And so you're saving for a median project on based on the data that I have, the sort of sales tax savings is about $200,000 on materials. And so I can't tell you exactly what that is based upon the data I have because I haven't inflated, I've inflated the cost of construction materials, but not the total cost of development. So this data has from 2017 roughly. And so it's hard to say exactly what share, but it's probably somewhere in the neighborhood of two to 4% of total development costs is what you'd be saving. Okay. I get a little nervous in this area because I remember getting involved, I think it had something to do with current use where you bought like ATVs and stuff and whether you were using it for planting or recreation and it all wound up being decided at the point of sale and someone got a certificate or didn't get a certificate and something that seems so uncomplicated became very complicated very quickly. So... Yeah. And I do think I don't, you might wanna have the tax department in to talk about potentially if there's any administration issues here, but typically how this would work is that the entity that would be building the priority housing project would issue, would fill out an exemption certificate given pretty often from the tax department and give it to the seller that they're buying the materials from and the seller collects those and then the event that they are audited by the tax department, they have those exemption certificates available. And so that's how I would imagine this would work. And I don't imagine it would require any sort of additional administration costs in the part of the department of taxes. Okay, great. Senator Brock. Ken. Graham, can you tell us what's the total amount of project cost that this would apply to? Estimated? So I've been told by advocates in this area that construction material costs for those only the amount of costs is object to this exam. It's about 50% of total development cost. I mean, total dollars is what I'm talking about that we would spend in this area that this particular exemption might apply to. And that includes project labor, everything else. Oh, so if, yeah, for, so based upon my estimate, it's about, we're estimating about 20 to $25 million worth of materials would be spent. So the total amount of development if we're assuming that 50% rule would be in sort of the 40 to $50 million range of. 25 million would be the cost on which a sales tax would be based. Is that right? Yes, yeah, that's correct. And so on that, let's say 25 million, you've got potential savings of, I think you said somewhere between two and 4%. Is that correct? On the, just the construction side, you would have total savings of 6%. And then it's about, I'm guessing two to 4%. But you said about two to 4% on the total. And the total is 25 million or is the total, is the 25 million the actual cost of materials? It's the cost of materials. So the total would be probably. That case you had 6% of that then, is that right? Yes, that's correct. And so that's why I'm saying like, I don't know, I'm guessing it's somewhere in the two to 4% range. It would depend by project. But if I'm assuming about 20 to 25 million in construction costs and 50% of the cost, total cost of development is construction costs and we're talking about 40 to 50 million of total development. And so 1.25 million of 50 is the two-ish percent. Okay, so if you assume though, the savings that you would get as a result of that, is it reasonable to assume that you would be able with the same amount of money to build more things like housing, which is what we're trying to do? I mean, the numbers I'm saying right now are just an aggregate. And so it really depends upon the size of the project. When I say size of the project, I mean the total amount of development costs. So we're estimating that on an medium project based on the data. So if the building that's happened in the past continues as it's going to continue, we're going to get sort of housing projects in sort of the 20 to 25 unit range. Then you're talking about $200,000 worth of tax savings. Based upon my calculations, the median cost per unit on the historical data that it has about 131,000. So another way to put this is that you may be able to construct one extra unit, but I don't think that's how developers would, I don't know if that's how they would use this money. They might just, it might just be sort of a, it might be applied to some other way or just might reduce the amount of debt that they'd have to take on. I don't know exactly, but you're talking about $200,000 worth on an median project. And so whether they use that to construct an extra unit of housing, I don't know. I guess it's reasonable to assume that if it costs less to build, there would be at least some likelihood that you might build more. Well, again, it depends on the project. So in the data that I have, some projects have a per unit cost that's significantly lower than others. So for projects that are very large, they benefit from economies of scale. And so if you're constructing a very large expensive housing project with a very low per unit cost, it's plausible that you would be able to take that your sales tax saving and plow that bank into an additional housing. However, if you're building something like a housing development with 10 or less units, your per unit cost might actually be quite high. And so it might not be as, there might not be enough sales tax savings there to make you be able to build or have the money to build more additional housing. And so- It's reasonable to assume that if the cost is higher, you're spending more on materials, aren't you? Yes, but on a, I guess what I'm, I don't disagree with anything you're saying. I'm gonna, I'm gonna throw you a lifeline on this one. I don't think you're really the, in the builder's mentality to know what they're gonna do with the savings. And also sort of Brock, it's a great segue into the next segment. No, it's a great segue because any savings that you have by not paying the sales tax is gonna lower the construction costs, which means they're gonna get less money in the value gap that we're gonna talk about. So either way, it's coming out of the state's pocket and it probably will wash out one for the other in terms of missing middle. So it's a good segue. So I, and we're running out of time. So I hope we can just move on. And Graham, thank you very much. 1.25 million is the figure. We have to, we would have to talk to the, our money committees about, okay, thank you. That's just for this year. Yes. So let's move on. Josh is here. Josh, I love that your label says, number one, Josh Hanford. Do you know that? No. You're the big boss, big boss man. So let's just start off by having you in three or five minutes, just explain to us the governor's proposal on missing middle. Sure. You know, we started this actually two sessions ago with a really even more basic concept calling it the home builder program, which was a up to $50,000 proposal to subsidize the building of homes, modest homes. Literally provided to a builder that was going to commit to build homes below a certain price point. And here we are now following up on a federal, the basics of a federal proposal, which was in the Build Back Better program to subsidize costs of construction and target affordability. And, you know, the governor has been seeing the need on this for some time, seeing the stats of the construction starts and the building permits just drop off in this area. We're just not seeing homes built in this price range in Vermont at nearly the level we need to. And so, you know, our goal was to propose supporting this, but realizing it needs to work its way through all the folks that are actually gonna access these funds, put them to use, leverage it for the construction loans and the mortgages that need to be taken out by folks. It was a small part of that larger discussion with only a few principles that are sort of like the lines in the sand from our perspective was obviously an upper income on the affordability of the households that should participate. We were following the federal guideline of 140% of AMI. There's been discussions now about maybe bringing that down to a cap of 120, but our top line was 140% AMI. And then looking at what someone in those price ranges could afford, you were getting at different home prices across the state. And the delivery method for homes coming online across the state, whether that's new construction or purchase rehab of old buildings is quite varied. You have some very sophisticated developers and nonprofit partners in Chittin County and some other parts of the state that those models don't work as well. So the other red line here in the sand is that this needs to be something that works across the state to address the needs and have some different points of entry for folks that wanna participate. And so that's where we are now. Those were the only perimeters seeing that VHFA was the main partner here being the largest affordable housing lender in the state, someone that offers first-time mortgages and does construction loans. So they were our partner to work with it, develop this proposal out and sort of build upon the Build Back Better neighborhood tax credit. We were really hopeful that that was gonna pass earlier and give us a launching point. And we wanted to be ahead of the game knowing that that program at the federal level would take a year or so to roll out and try to get something up and going before then to really work out the kinks and have this benefit from now in a fusion of a stable tax credit program. The tax credit program would have required VHFA to establish a new qualified allocation plan just like they do with the rental low-income housing tax credits, public participation, set affordability limits, all these standards of a public process that they have to go through. And so we were trying to mirror what those guardrails were of that program. And that's the first program we delivered and we've been talking about for a couple months now. Since then, there's been a lot more efforts to maybe target more perpetual affordability and things like that that weren't in the federal tax credit program. Those weren't conditions of that. We've said all along that the program we were rolling out could be utilized by folks that wanted to do shared equity and perpetual affordability. It would be a new source of capital to help those projects go, just like the state tax credit is now, just like in some cases new market tax credits can be. This would be a new source to fill in gaps but not meant to restrict access to the program to only work in a shared equity housing model. So that's where we are at this point. We're working with VHFA and Champlain Housing Trust and others to talk about what the different elements of this could be that could work for everyone, could work statewide in different markets and we could be successful on and still meet the overall goals of supporting the production of as many modest homes we can get to market because it really is about some scale here and actually making some progress in the severe shortage of homes in this area that we are experiencing in Vermont. So happy to try to answer questions and drill deeper but I think we have both VHFA and Champlain Housing Trust on here that have been involved in these discussions and have some maybe more of the detailed mechanics that you might wanna dive into. So in the bill, I noticed that there's language that this money can be used for rehab and acquisition. Is that, are those words loosely put in there? I thought this was all new construction. Nope, that was always in there. It's always been in the federal program by design with examples we give because they're easier to characterize and people to understand have always been about that cost $400,000 to build a new home when averaging Vermont, the bank construction loan appraised value appraisals only gonna give you 375. So there's a value gap in the construction and then to get that $400,000 home that we just allowed a contractor to build because they were only able to get a bank loan for 375. Now that home needs to sell for 340 in order to be affordable to a family in Chitton County that makes 120% of BMI. And so now we need to subsidize another $60,000 to bring that home down. We've always used that example because it's more standard and understandable. The purchase rehabs are all over the place and you can buy a home in Berry City that's falling down for $60,000. You can buy homes in Richford, Vermont for $50,000 but they're gonna need a varying degree of rehab to bring them back up to a marketable condition. And that could be $100,000. It could be $200,000 of rehab. It just varies. So it's too hard to sort of give those examples but it's always been part of the program. Okay, but I guess when I look at the VHIP program and the Revolving Loan Program that's yet to be launched it seems like we've got a program for everything. And now we're starting another program for rehab. It's very different than those others. I mean, this would be, sure. So I'm a builder, let's say I have a crew of 15 and I might see this program as a way for me to buy three or four of those dilapidated homes and you name it and put my crews to work on them. I took the risk, I bought them. I'm investing $100,000 of rehab and now I'm gonna make those available to sale as affordable homes for Vermonters. It's very different. It's driven by the industry, the builders, the contractors, the developers and not a homeowner. The million dollar Revolving Loan Fund is the homeowner qualifies for a mortgage on one of these same homes but they're not gonna get the mortgage because there's too many deficiencies in the home inspection. And so we're giving them a grant loan to commit to making those repairs so that the mortgage could go forward. It's one's driven from the owner and one's driven from the developer perspective. And the VHIV program is yet different in the sense that it's a landlord tenant situation and it's only for rental properties. So this builder is not gonna, you're assuming that he's gonna renovate it under this program and sell it as opposed to rent it out. Yeah, this program is only for home ownership, missing middle home ownership development pilot program and the development is rehabbed or new construction but it's homeowner with a upper limit of the homeowners that are eligible to then benefit from those homes and this investment. Okay. And so that does explain the rehab element. I think the word acquisition is in there as well. Are we starting a new program to... Just to purchase those homes that in order to do the work on them, someone's gotta acquire them. Acquisition in our world has a very clear definition for federal funds and sometimes acquisition has, you can acquire things and then someone else is actually owning it in a short period. So acquisition is just the way to gain ownership of that property so that you can do the necessary work on it. Okay, got it. Thank you, Senator Clarkson. Thanks, Josh. It's always good to hear about these time and time again and the time we've done it three times, we actually get it like a good sermon. Missing middle, we just had a presentation from Gus and Jen this morning and in their presentation, they talk about the home ownership development risk pool program, how that struck us as similar to the missing middle program. So I'd like you to discuss, if you could, the differences and how we could build in permanent, if they're building in permanent affordability, how could we do that here as well? It is the same program. They were the first funders in. They have a lot of ARPA money to support rental and home ownership. They had a set aside for an innovation fund and this program, VHFA applied to VHCB to get it started and VHCB committed $2 million to share in the construction risk pool, which is another part of this program that we've talked about. Folks, contractors, builders, developers, in order to get more construction loans to build these homes, if we can make banks take more risk because speculative building, even though there's a hot housing market, it's not, there's a lot of risk involved in that. And a lot of banks are, the interest rates are either higher or they're only giving them a portion of what they need for a construction loan. So what VHCB has done is supported this missing middle home ownership development pilot, the exact concept we presented in the beginning with an initial $2 million grant to help VHFA support the construction lending that's going to be needed as part of this program. And the risk pool that they've supported, I could be wrong, but I'm pretty sure doesn't necessarily come with perpetual affordability on that risk pool. It's to help more builders access construction loans to build more homes that are in this missing middle period. The funding that they're supporting is an add-in risk. There's no way to track that money to an end user down the road. And I'm sure Mora could chat more about that or Jen, but it's supporting this very concept as we've laid it out since the beginning. So why aren't we just putting more money into that program as a term? Yeah. The creating a missing middle program. It doesn't have this ability to do all the other things we want, which I believe you do too, that the sort of ensuring that that subsidy can carry forward and help reduce that cost of time over time. It doesn't, folks to build need to access capital to build. Then we are trying to subsidize the costs to allow affordable homes to move in. There's multiple layers in that process. And this is one of the areas that when VHFA started talking about how to make this pilot successful, they heard loud and clear from banks and from large construction companies that they needed access to more construction loan dollars. Banks were not willing to take the same risks that they took a decade ago. And this would help free up more capital to make it happen. And so it's a small part of this overall pilot. And it's not gonna solve the other problems we want to throw $50 million into sort of some sort of construction lending that we don't have the same oversight on. Maybe, I mean, we only have 10 more minutes, but Mora is with us and she probably knows the details of this better than anybody. It sounds to me from a lay perspective that this is sort of getting at the value gap in loan form rather than grant form. But Mora, you've heard this discussion. I'm sure you've got a couple of comments. Hi, good morning. Good morning, Mora Collins with Vermont Housing Finance Agency. And Commissioner Hanford laid it out very well as did Gus earlier this morning. I was listening in that, yes. And when I had testified earlier, I had spoken that there were three components to this missing middle proposal, the first of which I glossed over quickly for your committee. And that's probably why it didn't land and really resonate is because we weren't asking you all for money for it. And so it didn't feel appropriate to go into details about what we were doing with VHCB, but we did apply through the Innovation Fund that VHCB set up to ask for $2 million for this use, as was described. This was an idea that it was the state's builders and bankers came up with to make housing more affordable. And it's going to backstop the construction loan. It does not cover the value gap. It has, there's no, the way it's set up looks at 15% of the construction loan. And that is how much we can backstop with this loan support. And so it's a totally different calculation than looking at the total development cost. And I understand that it is complicated but that is the nature of home buying in home building especially. It also does, this program through VHCB that was funded is not a separate program than what we're talking about today. It's just three components of one program. It'll be marketed together. The rules will be the same. In fact, if you all, if I'm gonna be brutally honest if you all decide not to fund the value gap and affordability gap in the rest of this program then we would likely turn to VHCB and say we will not be drawing on the $2 million because that 2 million was always designed to be in partnership with this other funding where we would build out as Josh explained a comprehensive program plan that describes the type of eligible homes, their size, their affordability, the profit limits and all that. This other, this complimentary funding that we're talking about today was always designed to work with this money from VHCB and be one program. We just went to two different sources to fund the one program. So what do you mean by backstop and do you have $2 million sitting in an account as like a surety or something or do you give out that money at any time? How does that work? In talking with the state's bankers, they said that different bankers had different preferences of how they'd like us to structure this. And so we are still working through if we're going to allow a menu of options or if we are going to pick one option and go with it but the choices right now are that VHFA could hold onto the $2 million and should there be a loan loss in the construction loan then we would cover that loan loss up to again, 15% of the loan amount. We would have rules about what would qualify as a loan loss and that this isn't just that the builder wants more money or that the banker does or anything like that that would be, there would be some assurances there about what would trigger a loan loss. Another model is that we could actually deposit money with that lender and that lender would use some of the funds we've deposited in that bank to be the money that the builder receives and that would lower the cost of the construction loan because they're using this money as part of the loan and then that gets repaid at the end when the construction loan closes out or there could just be the same kind of VHFA holds the money and the builder knows, I'm sorry, the builder has to put up less upfront capital because all builders have to put in equity at the start of construction loans. So there's a couple of different models that we are working through and like I said, we haven't yet decided if all three options are gonna be available in each situation or if there's a reason that we should pick one option and have that be the program. A lot of that really decides on the elements of the larger program that we're talking about today which is what qualifies as a missing middle home, how much subsidy is there and the like. So some of these decisions we can't really get out ahead of and make yet until we know what this program fully looks like. Okay, Senator Collection. So, Maura, you talked about the three components, there's the VHCB component, there's our component, what's the third? Well, your component is split into two, it's the value gap and the affordability gap. There's been broad-based support for covering the value gap. The affordability gap has been a conversation that I think is one reason why CHT is here to speak to. Got it. Thanks, I've sort of thought of those as we were covering. That was sort of one, but I should move. Yep, can I just make one more thing just to make sure it's perfectly clear is that while VHCB has not imposed a special permanent affordability meaning that these home ownership units must be below a certain income level, they know about this discussion that we're having here and they know that permanent affordability will be a part of this broader program and I think are relying on that. In addition, in this state, we really do define a permanent subsidy as a revolving loan fund where the money will get paid back and then another home is assisted. That is very common with the home ownership text credit program, actually with the mobile home replacement program, sometimes it comes into play. So I think that VHCB would say that being a revolving loan fund that continually is helping more and more homes protects the public subsidy because it doesn't diminish that subsidy. The only time that would get diminished is frankly if we had to draw on it because the loan didn't perform. Would you, if this missing middle program goes through would you see a need to continue the $2 million program? Yes, because that is how, that's another way we're making housing more affordable by having the construction loan be cheaper. And so for those homes that are built through the missing middle program, they would be the only ones who have access to this construction loan program funded through VHCB. Doesn't the value gap grant lower the amount of the construction loan you need to take out? The value gap will lower the total development cost, but there's still, you could save $15,000 on a construction loan. And so that would lower that total development cost, but it may not lower it to the point where the home will appraise that. Give one example, we heard a big builder like Snyder Braverman, for them to launch one of their development proposals, they've got $2 million in the bank to guarantee performance and that they're good for their loan. Others don't have that, this construction risk pool that we're developing will help others be able to access these loans and get projects underway. Banks are very risk adverse to building like this. Lots can go wrong between when they start the project and delivering it on time, on budget and getting people into those homes. And this is a way to help the market build more homes. It's not a giveaway, it works in conjunction with and it's a tool that's used in lots of different areas. We do it all the time through Vita and whether it's in the ag industry or everywhere else, we're putting a little bit of a risk guarantee into a loan pool to help make more lending. We're familiar with that from our days in finance on CUDs, that's what they do there. So I just want to, we've had a bunch of offline conversations about perpetual fallibility. I don't know if there's two sides to that equation as far as I'm concerned, the dollar amount that's preserved in the home, but also subsequent buyers. Do they, are there any requirements on subsequent buyers in terms of their income levels and that kind of thing? And whether there's any way to address that, the way it's addressed in I guess all other forms of perpetual affordability in the state of Vermont or is the second and third home buyer even though the cost of the home is lessened by whatever amount, able to be a cash buyer that just walks in that has a lot of money and says, I want to take advantage of this subsidy that was given a long time ago. And is there any way to control that in a practical fashion? So just we should put our thinking caps on that as well. Senator Clarkson. I'm sorry, Mr. Chair. I had a 12 o'clock with the pro tem that quickly pulled together meeting on another issue that I need to scoot to. Well, we're going to finish up now. I apologize. Stay tuned. We're talking about this housing and mostly housing for the next two days to see if we can get this bill out. Thank you all for being here. Thank you for your patience, Chris, Jen, Michael never got to you, but we'll figure it out. It's that time of year. I apologize. Lot to be decided.