 All right, welcome back everybody. We are here on what we've called on our agenda, Housing 101. And we brought back Gus and Jen from VHCB. We have Tony Pickett here with us from the Grounded Solutions Network. We have Chris Donnelly from Shemplin Housing Trust and Nancy Owens from Ever North. And the reason for this is that again, based on the last conversation that we have, there's a lot of affordable housing that's gonna be in the air over the next few years. And it's important for this committee to really hone in on what the vocabulary is and what we're talking about when we talk about things like 4% deals or 9% deals are shared equity housing. And so I asked these folks to put together a presentation. And they had asked me to weeks ago to consider something like this. And I was able to, I'm glad to be able to fit it in here. And this is training for us. This is to help us understand some more of the language and situations that we've been talking about and learning on the fly. But with what's ahead of us, I think it's an appropriate time to try to take a minute and understand what it is we talk about when we talk about affordable housing. So with that, I'll just pass the microphone to Gus. Welcome back. Thank you, Mr. Chairman, for the record. Gus Selig, director for the Vermont Housing and Conservation Board, Jen Holler's with me and she'll screen share in just a moment. In thinking about 101, somebody once said to me, history begins the day somebody shows up. So for me, the history in working on this issue in Vermont goes to the mid-80s when I was at the organization, now known as Capstone Community Action. And the housing market was changing very rapidly in Vermont and starting about 1985, real estate was going up at about 1% a month. Lakefront was going up at 2% a month. And we were concerned with the displacement of people and Jen, you can begin to screen share from their communities and opportunities for people to live in the communities they'd been in. Concerned about displacement, concerned about the impacts of gentrification, concerned about the need to preserve existing housing stock and looking for, in the age of Ronald Reagan, a fiscally sound approach to doing that. And so let's go to the next slide, Jen. And here's what happened. In 1985, 100 families in Essex, a community with a great school system were displaced from their community when after getting all kinds of HUD funding, rental assistance, accelerated depreciation, the owner of that development just went in and prepaid his mortgage one day and doubled the rents. That same owner had a project in Moortown, Vermont and he converted it to condominiums. And there was a real sense of potential loss. And so people began to talk about what could we do about that? The federal government's approach to affordable housing was 20 years of affordability was plenty. And we saw that that was really short and we had some big projects on the horizon and one of them you're looking at, Northgate Apartments, where the end of that 20 years was within the three year period a big issue for the city of Burlington. Let's go to the next slide. So a coalition was developed that created the Housing and Conservation Board in 1987. And we were talking about our statute in a different context a few weeks ago, but we were told to develop the capacity to undertake the housing mission across the state of Vermont and to work with nonprofits and co-ops to provide housing that would be perpetually affordable. And then in allocating funds, we were asked specifically to consider the effect, the long-term effects of proposed activities and with respect to housing, the likelihood that it would both prevent the loss of subsidized housing units and be of perpetual duration. So that's the charge you gave us. Let's go to the next slide. We've created across the state a network of nonprofits to undertake the mission in most of your communities. I think they're viewed as really becoming community development offices for towns that do not have community development staff which is most of our communities. And that network was not what in the mid-80s what it is today, the Champlain Housing Trust when we came into existence had a staff of one and a half and I think had funded three single family homes. So it was part of our charge to go out and make that happen. Let's go to the next slide. This is Northgate Apartments, it's an aerial view and you can see that how close it is to Lake Champlain and I'm just gonna speak briefly to the power of permanent affordability here. We invested $2.9 million in a little over $20 million purchase from the owners who are out of state investors and renovation of that property and it was in terrible shape. That was real money in 1989, $2.9 million. There was a surplus that Governor Kuhnen proposed that we get of $20 million that made that possible. If you think about the impact of permanent affordability as opposed to short-term subsidies over time not only did that only cost us $8,600 per unit but if you divide it by the 30 years of affordability since that time it's cost $287 a year for the state of Vermont to have not displaced 336 households. If we'd use the model of private investment which is what people do in real estate and you figure out eventually you're gonna sell it and because of its location so close to the lake and the potential for condominium conversion it was viewed as high then and I think it would be higher today. I think more important, if you said to us today well let's convert it, we'll build somewhere else that probably won't be as convenient to services and community. Building 336 homes in Vermont today would cost something north of $100 million. So I would say to you that the fiscally sound approach to the policy of permanent affordability just makes all the sense in the world from my perspective. I think you can be, and it was very interesting when we were working on this back in the 80s Alan Geer, husband of Sarah Geer who eventually became the Republican leader in the House and became quite a proponent of this because of what he considered it as a fiscally sound fiscally conservative approach to using the state's dollars along with the idea of leverage. This was a tax credit deal as we are talking about Nancy's organization was at the center of it back then. Let's move on to the next slide. This is a different kind of opportunity and we've talked to you about key downtown buildings across the state in the late, this was in the 90s. This was the Burlington bus station. There was a fire that broke out. There were about like think 40 some apartments that were kind of rabbit war and not very well in good shape. And we had a debate about whether or not the public should invest in this building. And one of my colleagues said, we don't need to make an investment in this building. The private market will take care of it. And the counter argument was if we don't make a public investment in this building poor people will not be able to live in downtown Burlington. And I think there's been all kinds of investment in and around the King Street neighborhood and in the old North end. And I think it doesn't, if you just look at what the real estate market has been like, that's meant that people can continue to afford to live in a community where real estate prices and rents are really high. So I think, again, it has real long-term benefit. This ideal of permanent affordability. Let's move on to the next slide. Another fire ravaged building. This is in downtown Rattleboro. The fire chief wanted to tear it down the next day. And the Wyndham Windsor Housing Trust stepped in, bought it, saved it. I would say to you two things about this. One is that some of you are aware of the story of the Brooks House which had a fire just, I don't know, six, seven, eight years ago, much bigger building around the corner. And I think the fact that this building was saved gave private investors the courage to save the Brooks House. This building has affordable apartments. There's an arts education program on the second floor. The Brooks House is renting apartments for $1,800 and $2,000 a month. So again, Rattleboro is a different market than Burlington, but the power of permanently protecting assets, I think, for me, the case is very clear, that you need permanent affordability in one's approach to affordable housing. To talk about single family housing for a moment, and again, the power of this approach over time. This is the quintessential Vermont Cape. This one happens to be in Brookline, Vermont. We invested $12,000 to help the first family buy it. Back about 1991 or 92. That family divorced, eventually the woman remarried, they moved on to conventional home ownership. A couple bought it, or a single mom bought it the second time. She eventually got married and they moved on. Then a local realtor who couldn't find anything she could afford in the area, owned it for about 10 years. Each of these folks was able, and Chris probably talks some about an evaluation they've done to take some equity with them when they left. What the chart is telling you is that even though there was a decline in the market from the 2005 purchase to the 2018 purchase, the homeowner still walked away with $17,000 in equity, the value of the subsidy group. So with $1,000 investment, we've now launched four families into home ownership. Several have moved on to the conventional market. And the cost per year is $428 to have affordable housing. We'll move on to one more slide and then I'll wrap up. This is what we call a dual goal project. We cut 10 acres off of a farm that we were conserving in Norwich, Vermont. 14 single family homes were built here. They're relatively modest, 1,000 to 1,300 square feet. First one was built in the late, in the early 90s for about $12,000 of subsidy, about an $80,000 cost. Most recently, the last sale was at about 100, in 2018 of a home resale was at about $160,000. But this is a community where the average home last year sold for $665,000. So again, we think that the power of this investment is very strong and we are preserving and recycling the housing for community need without having to deeply subsidize these units over and over again. That doesn't mean we don't make additional investments from time to time. And in this case recently, a local doctor made a charitable donation for solar to help the 14 residents of this neighborhood. So I think that's the end of the slideshow. We can go back to full screen. And I guess I would just say a couple of things that we developed a non-profit delivery system in Vermont because they would be the people who would steward resources for the long term as mission-driven organizations. We've used the community land trust model, which Mr. Pickett will talk about and Chris will talk about more for single family home ownership. But we really wanted not to have people displaced from their communities. We really wanted a tool that could withstand the power of gentrification in a substantial way. In lots of places across the country, people live further and further from employment centers. That's a climate issue. That's a transportation issue. It's a family stress issue when you have to travel long ways to get to employment you're far away from where your kids are in school. So all of the things that are embodied in our mission and in our housing policies in Vermont around smart growth, around reinvesting in community centers really are tied together along with this idea of making a long-term commitment to the assets we invested and having those assets be there for the next generation. So I'm happy to take questions but I think you probably want to hear from your other witnesses and maybe take questions at the end. One last point I just want to make to your previous discussion because Representative Murphy raised the question of the importance of rental housing. And I guess I would just say the average single family home that was built in Vermont according to VHFA went for 450,000 last year. The average VHFA buyer buys for about 180,000. Nobody's building those homes. One of the reasons we have a rental crisis is that people who might be able to afford a home for 160, 180, $200,000 have no place to buy. And so tackling that part of the market as we launch this initiative is really important to get some people who would like to become homeowners to have them have that ability and free up some of that rental stock. So I'm gonna stop there. Thank you. Thank you, Gus. And I think we will just do the presentations and save questions for the end. Next up on our agenda is Tony Pickett. Tony, welcome to General Housing and Military Affairs. Thank you very much for your time today and I'm just going to share my screen but I got a message that says my screen sharing is disabled. Is there a way to correct that? Ron, can we make Tony a co-host? You are now a co-host. Thank you very much. Mucho. And this, and the slide deck is on our webpage as well. Great. Hopefully you all can see my presentation now. And again, my name is Tony Pickett. I am the CEO of the Grounded Solutions Network and I'm based in Washington, DC. Grounded Solutions is a national nonprofit network. We have just over 200 members and we serve all 50 states, including the District of Columbia and Puerto Rico. Our organization was actually formed in 2016 by the merger of what was called the National Community Land Trust Network and an organization called the Cornerstone Partnership. You can read it there for yourself. Our mission really is to promote the expansion of affordable housing solutions as we say that last for generations. Whenever possible, we would like affordable housing to be permanently affordable. We support our network by providing capacity building and technical assistance. And the organizations within our network include predominantly community land trusts, but also Habitat for Humanity affiliates and municipal housing programs. Some are grassroots community organizers as well as resident leaders. We also provide policy expertise and conduct research to support municipalities and advocates across the housing sector who want to adopt our approach. Really, I like to start these conversations with getting a little grounding in the origin, particularly of the community land trust model that actually comes out of the civil rights movement. Really in Albany, Georgia, in 1961, the first mass protest movement of the civil rights era took place. And as a result of that, activists, including a young activist with a student nonviolent coordinating committee named Charles Sherrod, who was pictured there on that slide, actually came together in Albany to really support local residents in obtaining community ownership of land as a solution to retaliation through eviction of black tenant farming families from their homes as a result of them advocating for the right to vote and actually registering to vote. So really, it was a response to the overwhelming racism of the time. At its height, new communities, which was the organization that ultimately became the first community land trust in 1969, it controlled over 5,600 acres of land in Albany, Georgia, making it the largest tract of land owned by African-Americans in the United States at the time. And so they were trying to both stabilize the families in terms of housing, but also give them a viable means to have the land to actually farm and create a living for themselves. And so when I talk about this, I talk about the fact that really racial equity is in the organizational DNA of the community land trust. And one other thing I'll point out amongst all the folks who were around the table to form new communities, you can see them there. Certainly John Lewis played a part, but also Slater King and CB King who were local residents in Albany professional black businessmen. Those are first cousins of Dr. Martin Luther King Jr. So that is the direct family connection to the rights movement as well. And in 2019, we celebrated 50 years of growth of the community land trust. And so at that point, there were over 250 community land trust organizations in the country, stewarding approximately 12,000 homes within a larger, what we call shared equity housing sector, which controlled and stewarded 250,000 homes. And you can kind of see on this slide, it sort of shows you what I call housing continuum from private market home ownership to private market rental. And there are a variety of options in between, but in that sort of blue elliptical area, I would say that's what we count as our shared equity housing sector. And you can see community land trust highlighted there as well. In the late 1980s, 1990s, that was a real period of urban growth for community land trusts. And that's when Burlington moved forward and created the Burlington Housing Trust that is today known as the Champlain Housing Trust. So again, there was a great expansion of community land trust activity during that time period. And today, there are community land trust innovations happening all over the country. In places like Denver, Colorado, where a regional community land trust is operating in the Metro Denver area with $24 million of philanthropic support, leveraging public investment provided by local municipalities in the Denver region. In Atlanta, Georgia, there is a land trust operating that is partnering with their local land bank to access some 877 acres of property that is controlled by municipal entities. In Houston, Texas, there is an ambitious plan to create 1,100 community land trust homes over the next five-year period with support coming from hurricane relief funding that has been received by the city of Houston. Local jurisdictions across the country that are supporting CLTs include Baltimore, Maryland, Oakland, California, Seattle, Washington, Richmond, Virginia, the list goes on. One thing I wanna highlight is the excitement that is happening today around shared equity and community land trust is really based on the performance of the programs. In 2019, our Grounded Solutions research team partnered with the Lincoln Institute of Land Policy and created the first ever shared equity housing performance report. And the outcomes of that report really validate our belief that shared equity housing and even community land trusts in particular really add a great value in terms of benefiting low and moderate income populations. One of the criticisms that we always hear in relation to shared equity home ownership in particular is that it limits wealth creation because it prevents the homeowner from selling and taking the full appreciation or equity that has built up in the home over time. We limit the amount of appreciation that can be taken in order to keep the home affordable for subsequent buyers. So it is really a move that creates a sustainable and long-term permanently affordable home but we also push back on those criticize the limited wealth creation by pointing out that over the 33 year period of our study which encompassed 4,000 homes in 58 programs across the country. Really the median initial investment by families in purchasing those shared equity homes was just over $1,800. And at the end of a five to seven year period of tenure when a majority of those families decided to sell the median accumulated equity that they took was $14,000. So anywhere that you can get a return like that outside of gambling in Las Vegas, please let us know because we're not aware of where that occurs. So we say to folks it actually is a wealth creating device. And then the other part of that is that six out of 10 of the shared equity homeowners that actually chose to sell their homes used their game to actually go on to purchase a traditional market rate home which was what Gus was referring to earlier. So the majority of folks who were buying these homes who were first-time home buyers, low modern income families who otherwise could not get into home ownership. They're making their way into home ownership and they're making their way onto traditional market rate home ownership. That is a trend that we see happening across the country. Also, just in these times when everyone is focused on the racial equity impact of public investments and housing programs in particular, we point out that the study also shows that at the beginning of that 33 year period, we had about a 13% rate of minority home ownership and shared equity housing. And that increased during the 2013 to 2018 period to 43%. So we're increasingly serving households of color is the point to make there. And so again, part of our excitement right now is that we are really pushing our sector. I have challenged all of our members over the next 10 years to increase the amount of shared equity housing from the just over 250,000 units that we have on the ground today to over a million homes. And so again, tying this to our goal and our path toward increasing racial equity. And we understand now that housing really shapes the future of the family, the social determinants of health. Where people live really affects their long-term health outcomes. COVID-19 has taught us that housing is healthcare. We cannot really expect families to withstand the impact of pandemic type events unless they are stably housed. And also we'd like to point out that housing is really driving economic activity. If we're successful in creating a million homes over the next 10 years, we're looking at that potentially generating $45 billion of annual economic activity and supporting just over 6,000 jobs. So it's more than just housing that we're talking about when we talk about investing in shared equity and community land trust programs. And so I will end there and stop sharing and turn it over to the next presenter. Thank you, Tony. And we'll be back with questions. Next up, we have Nancy Owens. Hi. Hi, Nancy, how are you? I'm good. So much for having me. And I'm glad to join this group. I am a co-president of Ever North, which is a nonprofit organization that serves Vermont, New Hampshire and Maine with community development financing and development services for housing and economic development projects. And you may be familiar with the organization Housing Vermont, which had been active in Vermont for 30 years, Housing Vermont and Northern New England Housing Investment Fund, based in Portland, Maine, merged this past July to better serve the whole region. So that is Ever North. And I have been with Ever North 20 plus years and worked in this arena for a long time. So I was going to take a few minutes to just describe the Affordable Rental Housing tax code program and development in Vermont. So shifting from the home ownership and the shared equity model that Tony has focused on and returning back to some of the comments like that's brought up around affordable rental housing. And I'm just going to go from a very high perspective and I'm not using slides so I'm trying to keep it simple. But like, where does the money come from? Who's doing the work? What are the community benefits? And what are some of the key issues and trends coming up? Not going to go into the detailed rules of every person that's involved. It would be a lot and take a lot more time if there's things that are of interest. We can always come back and revisit or get you more detailed information. I'm just going to start with a really simple concept around the money, the question of the money. And so for simplicity's sake, let's just say that a new housing project costs $100 to develop. And of that $100, $2 or $3 is going to pay for the land and $75 is going to pay for the construction. So all the infrastructure, the building, all of the activity and the bounds of the money, the $20, $25 that's left of that $100 is covering the non-construction costs, the things like the legal and the accounting and the loan fees and reserves, the architects and surveys and all of those costs. So that's kind of like how that's involved in a very quick picture. And so like, where does that money, where does that $100 come from? It gets to be more complicated. We talk about the capital stack. I know folks have seen some of these proformas and see there's 10, 12, 14 sources of funding that come together to create that $100. But in general, maybe five to 12 of that $100 is coming in a conventional permanent debt, a mortgage from a bank. About 60 or $65 of that $100 is coming from private equity that's raised through the sale of the federal tax credits. And we're going to talk a little bit more about that program in particular. That leaves about $15 or $18 from other federal public funds, grant sources, things that are familiar to you, I'm sure, the home funds, the National Housing Trust Fund, the Community Development Block Grant funds, those are federal dollars coming to our state that are administered by BHCB and by the Agency of Commerce. And then the last piece, but an important piece is that last eight to $10 that's coming from the state, that's coming from the Housing Trust Fund, the funds that you are appropriating to the Vermont Housing Conservation Board. So just a quick snapshot of those parts and pieces and nothing can be built, nothing can move forward. A developer can't close a transaction and go until all those pieces are in place and that they can demonstrate they have a financially sound project. And a gap is a gap, you're short $5 or $50, the project's not going to move forward. So funding, all of those pieces in that capital stack are essential and critical. And just to think about it, the way that the housing is affordable is if you think about conventional financing, a private developer would go out and put in maybe five, 10, 20% of their own equity into a transaction and finance 80% and carry that debt and cover that debt through their operations. Affordable housing is balanced just about the opposite. We bring 80% or more inequity to the table of grant funds, equity from the sale of credits and so forth, and only financing five, 10 or 15%. And that's how it's affordable because we're not carrying all of that debt. And so the rents are going towards covering the operating expenses, but they can be much lower because they're not paying for that mortgage. So that's just sort of a structural way to think about that. I wanna just talk about the private equity, which is the largest source of funds and comes from the sale of the low income housing tax credits, and that's a role that Evernorth plays a strong part in in that we're raising capital through multi-investor funds. So every state is allocated tax credits from the federal government. Developers make proposals to acquire those credits and VHVAs are allocating agency as you know. The proposals are evaluated against a qualified allocation plan that's unique to every state. And so every state gets to determine within a framework how it wants to prioritize the use of those funds. There are two other federal programs that are also used, the National Rehabilitation Investment Tax Credit for Historic Properties, which were used in projects like the Wilder Block, the Brooks Block, the property in Burlington downtown, as well as you were referencing earlier the difference between four and 9% credits, so the 4% credits. Those other resources are useful and beneficial. They're not as valuable as that allocated 9% credit that VHVAs issuing out, because they don't add as much value, they create some other gaps that need to be funded from other resources. So there's a lot of people involved in the financing construction of projects. We've talked a little bit about the public and private funders. There's real estate developers and all of their professionals that assist them, the contractors, the architects, all of the private enterprises that are involved in the construction. And then two other critical players that are distinct to the tax credit financing are called the syndicators and the investors. So Evernorth is a syndicator, and our role is to raise capital from the investors for affordable housing. We do that by creating large multi-state, multi-investment funds, and we match the investors with the developers. So we just closed down a fund of $60 million that's investing capital into projects across Maine, New Hampshire, Vermont. The investors are typically, for the most part, are banks, and banks are driven to invest in tax credit financing because of the Community Reinvestment Act, which is asking each bank to demonstrate how it's supporting investment, how it's using investment dollars in the communities where it's based. So each bank's geographic footprint drives and defines their investment interests. So you won't see Wells Fargo Bank investing in Vermont because Wells Fargo does not have any deposits in Vermont or doesn't have any branches. Our two largest investors in Vermont have been just really great partners with all of the organizations are People's United Bank and TD Bank, each of whom have invested over $100 million through Evernorth into affordable housing all across the state. And most every single bank in Vermont has participated over the past 30 years at some level, purchasing state tax credits, low-income housing tax credits, historic tax credits. And we're really very fortunate that this community has supported our work. So finally, so we talked a lot about the money and the parts and pieces, but the key piece are the developers. And tax credit, affordable housing in Vermont is really dominated by the mission-based nonprofit developers. And Gus showed you those organizations and talked a little bit about the founding of that whole network. I just wanna say that network is not, there's not a network like that in other states that we are very well served by this nonprofit network and by its coordination and collaboration. And I wanna talk back on the issue of permanent affordability and how it brings all these pieces together. That permanent affordability is a key policy provision that's in the VHD statute, as Gus said, and it's in the QAP. It undergirds the whole process. And so if a developer is using any of those funds, they're committing to perpetual affordability. That's not the same. And across the nation, I think 41 states have a requirement that give a longer period than the federal statute requires, but only two other states, Massachusetts and Michigan, have that perpetual affordability that we have. And why does that matter? We've talked about that the permanent affordability creates the community assets that would otherwise be converted to market rate housing. And Gus's example of Northgate is a great one. There have been others more recent than that and they're happening all across the nation where homes are being lost and converted. The public investment is made and that appreciation that's gained over time should be appreciated, shouldn't that stays in the community? Again, sort of a similar concept to the shared equity model that the real estate's appreciating and we're keeping it tied to the use that we began it with low and moderate income housing. Mission-based nonprofits are so well suited to guard the long-term affordability because it is their purpose as an organization. They have that commitment to serve low and moderate income people. And they're not looking to cash out of the properties but instead are focused on serving the community. In addition to just being strong, having that central purpose, the mission nonprofits typically bring other kinds of services, whether that's counseling, financial counseling, or SASH services or transportation services, food access services. A mission-based nonprofit owner of affordable housing really enhances the whole property and brings a lot of benefits. And from a syndication and investor perspective, that is well-recognized. The investors have a lot of respect and for the capacity of the Vermont nonprofits and their performance and their good stewardship of the properties that they've invested in. We've never had a tax credit recapture or a failure in any way on any of these properties, no meter audit findings. And so again, there's a huge amount of confidence in this group. It's well functioning and effective. And it's proved it's worth, I think over the years, whether that was in the 2008 economic crash, the work that was done post-tropical stormwatering, the ability to deploy capital quickly through the housing revenue bond. And now during the COVID pandemic, how the nonprofit network has stepped up to support our communities. So I just wanna end with just a little warning or risk about the future ahead of us, in particular to the tax credit arena. As you know, there's so much pressure on the housing market right now and it's so difficult for people to find safe and decent homes to live in. But there are some threats to the credit program from some bad actors in the industry who are aggressively litigating, where they're aggressively litigating to convert tax credit properties to market rate housing. And we're seeing these companies grow in more bold and even as the industry is calling them out on it and we are seeking federal legislative changes to disallow these aggressive practices. One of the key preventative measures is just what we already have in place, which is perpetual affordability. That covenant is a protection against this kind of activity where homes are being converted from affordable housing into market rate housing. So it's protecting our investments forever and reducing the opportunity for those kinds of market rate conversions. And it's really makes for stronger and healthier communities. We don't wanna be, if we're losing housing and building housing, we're never gonna catch up. If we're losing affordable housing out of the market to market, how can we possibly ever catch up and fill that gap? So we need to sustain all of the investments that we've made over time. But I will end there. Hope we have enough time for questions still. And Chris. Thank you, Nancy. An incredibly important segment of understanding for us. Thank you. Chris Donnelly, welcome. You are the architect of this presentation today. So thank you for helping to put it together, but you have a serious part to play here. And then after you then we will open it up to conversation questions and answers. Great, thank you, Chair Stevens. And for the record, it's Chris Donnelly with the Champlain Housing Trust. I feel like I, it's strange. I haven't been in your committee at this session. I felt like I was here, was lived here last year. So it's nice to meet many of you. I'm just gonna share the screen and show a quick little presentation that gets more into the details of what the shared equity program is. That Tony had described. So since this is my first time here, I just wanna quickly outline what the Champlain Housing Trust is. We serve the three Northwest counties of the state. You can see some data points there for us. I like to think about our housing is we serve, we have roughly six or 7,000 people that go to bed in one of our homes every night. So it's really the size of a small community in the state. We also have a lot of commercial spaces. Gus showed a slide of a building in downtown Burlington. And then we steward a lot of community assets for affordable housing in perpetual nature. So, let's see. You've heard a lot about, I'm sure, in the past few months about the difficulties around people accessing housing. This is just a quick slide of some of the data. The one I'll point out here is that in Chittenden County, the median sale price last year was $339,000 for a single family home. You'd have to earn $93,000 to afford that. And it's $20,000 more than the median household income makes. So this is a huge gap between what is out there and what people can afford. And as we touched on earlier, as a renter and the high rental costs now, it's really hard even to save for the down payment. Tony touched on some of this and Gus as well, just some of the reasons why we do the shared equity program, the shared equity home ownership program. We protect neighborhood certification. We help build wealth. Tony had a number that was similar to what we have here in Vermont, creating about almost $17,000 in wealth for our owners. We enable mobility. The other thing that I like to point out is even through the ups and downs of the market, the national site showed that owners in the shared equity program are 10 times less likely to go into foreclosure than the regular market. And we serve lower income people. And again, one of the threads here is that we lock in the public investments forever. So I just wanted to walk you through how a person actually goes through this process to become an owner through our program. And I'll get to the numbers in a little bit. But the first thing is when people want to become a homeowner, we encourage anyone to take home buyer education. We offer classes or home ownership centers around the state that offer home ownership classes as well as counseling. So people come to us and then they take this class mortgage ready. If they can become mortgage ready, but the mortgage that they can get from a bank or credit union isn't enough to buy on the open market, then our option is a really good one for them. If they can buy on the open market, that's great. But many people just cannot. So we help them get mortgage ready. If they want to buy one of our homes, there are multiple ways that we have created these affordable homes over time. There may not be a lot available at any given time, but these are the different types of ways. So people start thinking about where they wanna live and what kind of home they wanna buy. There might be a home that's in the portfolio that's coming up for sale. We work with habitat chapters. We actually, I just heard yesterday that we have six or seven habitat homes being built right now or in development. And they have 200 people that have expressed interest. So there's a high demand for this. We are actually building, gonna be under construction this summer for new condos in Winooski. That's been funded by BHCB and also has been accessing the new market tax credits program. We at times there's been funding available to purchase homes that have been foreclosed or need rehab. And so there's a variety of ways that people, people can, or that we bring the homes into our portfolio. This is just an example of someone who's bought one of our homes, Ian Boyd. He called this program, not just a fiscal fitness program, but a physical fitness program because he, as part of his process of spending three years to buy a home, he sold his car and started walking to work. So he really, he worked very hard to get to the point where he could buy a home, save the money. And now he's, he and his wife have two kids. When he was ready to buy, when he was found at home, he wanted to purchase, he hired his own lawyer, his own home inspector, and he got his own mortgage. Well, we will help people along the way and give people training and support and help them any way they need to. They do need to take ownership over this process and they need to be ready to buy. So we really, we give them all the tools and then they act on them. When they get to the point of the closing, the local nonprofit, CHT or other nonprofits in the state will steward that subsidy that's attached to the property to that's insurance and affordability. The original subsidies usually come from BHCB or the state affordable hasn't tax credit. The buyer gets their own mortgage, the recovery union or local bank. Some credit unions have actually created specific products and mortgages for our buyers because they know it's so safe. It's a portfolio of products. This is just a quick snapshot of the types of people that have purchased our homes. You see over a third have kids. The average length of tenure isn't that much different than first time home buyers but the median income is much less. It's about 70%. And I think Tony alluded to this too in the past and more recent years. I think there's been a lot more intention at doing outreach to communities of color. So in the last five years, 25% of people that have bought our homes have been people of color who've added translation, interpretation services. And that's been really important. And I know there's been a lot of talk about the workforce in this committee and workforce housing. This is the workforce. These are the people that are taking care of our kids, taking care of our health and making the economy going. This is just a quick slide of Charles and Beatrice that bought in Burlington. I remember sitting with them about two weeks after they bought their first home through us. And just the way he described it was just that he had arrived. And it's hard to put that in, well, as eloquently as he did. He just, he felt like he was just finally set and he could take care of his family and he could settle into this, into Burlington. After the owners buy the homes, they're responsible, this home ownership, they're responsible for the mortgage, the insurance, the property taxes, they need fees. If they have a lawn or a driveway, they need to take care of that too. They can leave the property to someone else in their will. But the difference is that they have to work through their local nonprofit when they decide to sell and that they've agreed to a resale formula that preserves their affordability. So they have all the other rights to responsibilities, but we, the exchange for getting that assistance to buy the property in the first place results in their agreement, they're agreeing to keep the affordability mechanism in place for the next buyers. So just real quickly at the sale, the nonprofit will identify new buyers. We use this, people are coming through our home buyer education classes. We do a new appraisal and then the original subsidy that came into the property stays there. They don't, the seller does not take away that original subsidy, it stays with the property. The seller does receive though, anything they paid down on their mortgage, this is much different than renting. You pay your rent to your landlord, you walk away with no equity. So they get everything that they pay down on their mortgage. If they decide to improve their kitchen, put a deck on the house, anything that they can, we can document that they improve the value. They get 100% of that, but they only get 25% of the increase in the home value from the time that they purchased to the time that they sell. The new buyer as it again, takes this home buyer education class, they get a mortgage that's equal and I'll do the math for this in a second. They get a mortgage that's equal to the appraisal minus the original subsidy and minus 75% of any of the market appreciation from the time that the original buyer bought and then the sale. And then they agree to that same resell fund. So this is where doing math in public is a little dicey sometimes, but let me just walk you through this. If you look on the original purchase column, say the original appraisal was at $200,000. We have a subsidy that's this, usually you're at 20% to avoid the private mortgage insurance expense that people have to pay. So the original subsidy is 40% or $40,000. The buyer's mortgage, the original purchase would be 160,000. They live in it for five, six, seven years. They decide to sell, we do another appraisal. The home has increased in value from 200 to 240,000. The original subsidy is still the same, it's $40,000. You take 75% of the appreciation, the difference between 240 and 200, 75% of that you leave it in the home as an added to the subsidy. So that's $30,000. The new buyer's mortgage is $170,000. Seller, the original owner, guess whatever they paid down in the mortgage, plus 25% of the appreciation. Or in this case, it's $10,000. So they get whatever they paid down in the mortgage plus $10,000 in this example. Sarah Robinson and her husband, Colin, some of you who may know these folks, I know they've been around the state house a little bit, they did this, they bought one of our homes. They lived in it for several years, had a couple of kids, decided that they wanted a bigger house and they moved out and they were able to take the equity that they earned in the shared equity home and buy on the market. Tony alluded to some of this as well, that this is a growing kind of model around the country, but it's also growing around the world. Back in 2008, the Shampoo House of Trust received the United Nations World Habitat Award. We've received other kind of recognitions nationally that have kind of elevated this model. And I know Tony must get these every week. If we get them every week, we get calls all over the place. From county governments and cities asking how we do this. Just one last slide about, again, this is a workforce, this is someone that works at least when you bought, you worked at the Bellows Free Academy in St. Albans. He pays less in mortgage than he's paying rent. That's it. So I'll stop there. Thank you, Chris. Barbara, the representative Murphy. Thank you, Chair Stevens. And I just wanted to thank everyone for their information as a newbie to the committee. It's a great primer as well as just background for lots of what we've already done and hope to do. And I just wanna jump on what Chris closed with, which it's always broken my heart that it's more affordable truly to own a home than to rent in so many circumstances if you can just get in. That the monthly cost is so often actually less. So I really appreciate all of the work that goes towards helping people over that entry and being able to start investing. So thank you. If I may just add to that, thank you, Senator Murphy. The other big benefit is that it stabilizes your housing costs too. So you're not seeing a rent go up each year. So it's stabilizing your costs as you're building it, as you're saving as you're building equity. So getting people access to that is... And receiving a tax benefit, right? Which is, as mentioned earlier, is really the mortgage tax benefit for homeowners is one of the biggest housing subsidies that the country works with. Representative Clacky. Thank you, Chair. And welcome to everyone. Welcome back to many of you. Glad to see you all. Chris, I wanted to make sure I understood not your addition or subtractions in the mortgage part, but if someone, you said improves their kitchen or improves their deck, that it also often improves the appraisal of the house. So how does the person get a proportion, the 25% of the approval in the mortgage on the way out or do you get the costs of putting the new deck that also increases the price of the house? Yes, it's a good question. It's something that we negotiate with the owners. They have to document that they put this in and then the appraisal will demonstrate what the value of the improvement is. So a deck is a little simpler than a kitchen, but we don't want to prevent or disincent people to make investments in their homes. Okay. And I just wanna make sure I got your percentages correctly that 25% of the communities served are Black and Indigenous and people of color, correct? Over the last five years, 25% of the buyers overall in our portfolio, 650 or so homes, about 14% are people of color. Okay, thank you. And then my last question is for Tony, if I may. Tony, of your 250,000 units, I think that's what you said. How many are actually in Vermont? I'll defer to Chris to answer that question since I don't have the current number. We're approaching 1,200 representative Kalaki and they've been home to more than 1,800 households. Okay, beautiful. Thank you all. And hello to Nancy as well. Representative Bloomly. Thanks, Chair. Thank you, guests. Well, for the presentation, but also for this work. I think the model is so brilliant and it makes so much sense, but it had to be invented and I'm really proud of Vermont for being such a national leader. I confess that I am confused, Nancy. I mean, I just don't fully understand your comment about there's a lot of pressure on the market. There are threats to housing that were financed through tax credits, but now want to convert to market rate housing. And can you explain kind of, can you give me an example so that we play that out so I understand what you're talking about? Sure. It's not an entirely new thing. Gus mentioned that when properties are financed with a federal subsidy, they might be financed for 30 years or 20 years or something and our, and at the end of that period, the owner has the option to pay off that loan or do something else and convert to market rate. What's happening in the tax credit industry in recent time in the last three or four years? There had always been a pattern where the investor, the bank investor had been satisfied with their investment at the close of the compliance period for the tax credit partnership. They got their tax credits, they got the benefits they expected, they got the return they expected, and they exited the partnership and left the owners to do with the project what they will. Now, when the owner, when the project is perpetually affordable, to do what they do would be to continue to operate it as affordable housing. In recent years, there's been some syndication firms who, and it's not the banks, it's the intermediaries, the syndication firm, who are pressuring the owners to get as much cash flow out of the project as possible and strip the project of money. And they're changing the economic model of the whole system and introducing some really predatory and aggressive practices that we have not seen before. And so there's a group of people that I'm working with on a national level that are educating developers and housing finance agencies and others about this practice. There have been significant lawsuits with these organizations and HFAs and nonprofits and owners that are super costly where they're litigating the terms of the investment and owners are losing. And these bad actors, these bad syndicators are taking over projects and converting them to market rate housing. There's a terrific news article that was published last week from WBUR in Boston. I can send a link if folks are interested. That would sum up this up more quickly and easily. So I think that's probably the best way. And I would just say as a strategy, as we're looking to prevent this from happening, our perpetual affordability covenants are one of the strong measures that help limit that opportunity for those bad actors to convert our housing. And it's happening nearby. It's happening in Boston. It's happening in New Hampshire. There's litigation going on. So, and it stems from just the pressures to the value that's here, right? The rising rents, you walk into some communities, whether it's the Upper Valley or Chilling County or even St. Albans or other communities on Piliar where the rents are rising so fast that the difference between that affordable rent and the market rate rent is so substantial that people can see how they can cash out and get that value. So that's why I was talking about the pressure on the market. But I will provide that link to that article because it's much more clear and succinct and tells the story well. Well, what you said was pretty clear, but that'll help too. Thanks very much. Tony, in your slide deck, there was the page four of your slide deck had a map that was showing shared equity homes across the country. And again, we do all this work in Vermont and your map reflects about how much is being done in Vermont. And I kind of want to turn that a little bit and say, this is what we think is normal, this kind of work and these kinds of conversations. And then map reflects that. But to share with me more about what's going on in the other 49 states where it's not as densely green on your map. Some years ago now, I went on a mission trip to Biloxi, Mississippi and it was five years after Katrina. And Biloxi said, remember Katrina hit us. It flooded New Orleans, but it hit us. And we were down and we were fixing some homes and the folks at the back bay mission were just, I was asking them about what happens when they're affordable housing goes off their deals and there's a threat of them going. And they were like, we don't have affordable housing like that. And that's what this map reflects to me. And I just, if you could just share some thoughts on your research or your, just what do you see out there? I see a lot of empty areas. Certainly you're correct. You have a robust approach to permanently affordable housing. It is not as common in the rest of the country and the map certainly reflected that. I will say our survey of our membership shows that the majority of shared equity programs, they are small nonprofit organizations, mostly with five or less full-time staff members. So that is also one of the challenges that we're working on in this effort to increase the scale of shared equity housing across the country over the next 10 years is to build more technical capacity and provide assistance and education to train a workforce that can actually effectively implement these programs in other parts of the country. I will say in terms of numbers of organizations, actually no surprise, California has about 33 organizations in our membership that are really focused around the shared equity approach. But when you think about the size of the state, that's kind of a drop in the bucket in terms of meeting their affordable housing crisis. And it is no question about that even before the pandemic, the numbers from the Harvard Joint Center for Housing Studies said that 18 million families across the country were paying more than 50% of their income for housing costs. And that was both renters and homeowners. So again, it was a problem even before the pandemic, it's now been exacerbated further. Our approach really has been to seek more resources in terms of philanthropy and from the federal side, we actually have introduced a bill in Congress right now as part of this infrastructure package, the housing portion, it's called the Restoring Communities Left Behind Act. It would actually, if passed, result in five billion a year for the next 10 years to really focus on a variety of community development programs with shared equity and community land trust being specifically called out in that bill along with some other things that we feel would be effective. And so having those kinds of resources is what's needed to build the field and have more impact than you were correct. All of our members here in the US and across the world are pointing to the work of you all in Vermont as the way forward. You are the example that everyone is looking toward. Chris had it right in his slides. And so we are trying to promote that as much as possible even in recent weeks. We were all cheering because the New York Times chose to cover our work and really highlight the fact that creating permanently affordable housing is a necessity to create a protected stock of affordable units to prevent this expiration of affordability. The thing that Nancy is talking about, the same thing happens on subsidized, traditionally subsidized home ownership programs where there is no requirement for permanent affordability. So when the compliance period ends and sometimes dependent upon how it's structured that could be five years and there's no requirement to pay back really the initial subsidy. And even when there is, once you pay that back trying to produce another affordable home costs you more than you're getting back in terms of the subsidy recovered. So again, we're in this sort of cyclical issue that permanent affordability could help to solve. And when I talk about these things I also forget to share sometimes that I myself am a community land trust practitioner. I have started a community land trust organization. So I know what it's like to be an executive director of a startup nonprofit trying to introduce a new approach which I can tell you oftentimes is not understood by the public funders nor the private lenders nor by the people who are actually in need of these homes to have affordable places to live. So you're trying to educate across a variety of different interests to make people understand the effectiveness of the approaches. And also to Nancy's point an increasing number of our members are also working on the multifamily rental side putting multifamily rental properties through partnerships with either mission-based or even private developers on protected permanently affordable leased land to give them an element of control. So when the compliance period ends from the tax credits, the mission-based landowner steward entity is able to step in and either find another partner or even have a first right to purchase those properties and keep them affordable. So we're increasingly pushing forward with even business planning for startup community land trust entities to incorporate both rental and home ownership. So the ARPA money that's available across the country of course we focus in on what we receive which over the last year has been tens of millions of dollars more than we've received ever. And we're at the cusp of figuring out how to build a systemic change in our housing. Again, how are other states treating the same? I mean, they're getting more simply because they're larger states but and I'm assuming that their needs are as exponential as the amounts of money are but what are you seeing in the initial stages of this money becoming available and the planning for what we're trying to do? I'll say it varies widely. I think it also depends upon the awareness of advocates in each particular state and places like in New York. There are advocates who are actually being very effective in directing that funding towards community land trust and other shared equity models but you mentioned there are places in the country and I would say in the deep South where that's really less the case and most of it is being channeled into, I would call it more traditional affordable housing approaches and really dealing with homelessness is actually one of the really elevated issues in most of the larger urban areas and so a lot of it's being directed toward that. One thing I can tell you is we were successful in 2019 in partnering with NeighborWorks America through a lot of advocacy from the Vermont delegation here in DC to secure a $2 million sound small federal appropriation for education and training and we're now putting that out. We are serving 33 organizations in 28 states to incorporate shared equity into their affordable housing approaches. So those are existing for the most part mission-based organizations who are incorporating that as an aspect of their work and they are then in turn acting as the advocates in their states to secure more resources for that. So we're replicating that program again so we'll have another cohort of states and organizations that we're working with here before the end of the year. But again, it's another one of those things where we need more resources in order to really engage more entities in understanding how to do it. We've been working with both Fannie and Freddie for the last several years to create specific mortgage products and educate lenders in what's necessary in order to make shared equity home ownership work as well. So we're making progress on that score. We're even beginning to investigate some efforts to create acquisition funds so that we can be as nimble as some of the private players who have a mass capital and who are simply waiting to identify what they call distressed properties to acquire and convert to market. So we could intervene effectively in that process if we were able to create an acquisition fund that was national in scope to be able to do that. You mentioned neighbor works and I wanna go to Gus and say Gus, neighbor works is an integral affiliation in our state as well. Could you just give us a quick rundown of what neighbor works means to Vermonters? Chris may be able to do that more than I, but I'll just say we have five organizations in Vermont that are part of the NeighborWorks America Network. And being part of that network brings all kinds of financial and technical support. They have great training institutes that they've actually made available to our whole network whether you're a NeighborWorks affiliate or not. But they're a national intermediary chartered by Congress and it is, and we actually have more NeighborWorks affiliates in Vermont and you can guess the reason why than any other state in the country. So we're very fortunate that way. Chris, do you have anything to add? No, I think Gus captured that perfectly. They provide not just the training and technical assistance but they also provide resources for capacity for the nonprofit network in the state and as well as some capital resources. So it's really, they've been a great partner. It's just another word we're gonna hear just as we deal with the nonprofit housing organizations in the state as well. Any further questions for our guests today? That was just a lot of information. But I think I'll appreciate Zoom for a minute and just say that it's on tape. And I think this is gonna be important information for us to be able to, we can come back to this anytime we want, which is a little different than what it has been. So I'll appreciate this two-dimensional world a little bit in that way. Any further questions, any last questions for our guests? All right, thank you so much, Chris, for setting this up. Tony and Gus and Jen and Nancy, thank you for being a part of this conversation. It's really, I treat these as seeds and maybe seedlings of information and we'll see how they grow during our off time and we'll see some of you or most of you back next year as well. But I'm sure we'll be seeing more of our local folks but Tony, thank you so much for joining us. It's a pleasure to meet you. Yes, and I have other connections in Vermont, as Nancy knows, so I'll be maybe running across you at some point in the future as well. But it was a pleasure to join you and thank you for all the hard work that you all do. As we say here in Vermont, you're two degrees of separation, not six, so. All right, thank you. And committee, we have a version, I believe everybody's received a version, the latest version of S79 and we will pick up with that after the floor today and with the goal to getting it voted out of committee. Representative Hango. Yes, thank you. In that document, are the changes highlighted somehow? Yes. You know what color the changes are? David's following the same scheme that he has done before. So this version still has the yellow but also the changes that we made are in blue. So when you scroll through and for instance, get to a particular page on the language that we would focus on first today, which is about the home share language that we still have to finish up with. You'll find it in blue. And does it differentiate how it changed from last night's version? Oh, I. That's what I meant. I think these are all the changes that have been provided by David, so. The reason I'm asking is because Ron's email says that there are minor changes to last night's version and I spent a lot of time going through last night's version and now I'll have to spend a lot of time going through this version to figure out what changed from last night unless they're highlighted. My impression from David, and we can ask him, but from the email, since the document didn't change, draft number or timestamp is that these were editing catches, commas and cap holes and lower capes. That's my impression. Fair enough. These were not substantive changes in any way. And we'll take a seat with us at our afternoon hearing so we can ask him that. I certainly hope so. He'll have a front row seat. Thank you. The other thing to keep in mind to look at before we work. So there's a section about the home shares, but also go back and look at the section on the eviction moratoriums. There was just a technical, David had a technical change that he felt was technical and he can explain it when he comes in about keeping in the administrative order 49, which hasn't expired yet. So he kept that in and then added our language as an extension or as an addition to that. You can see it and he can explain it later. I haven't seen it yet, but he had just said that the AO49 has not expired yet. So he felt that it was appropriate to keep it into the language that we added on the moratorium. So just take a look at that. But with that, thank you everybody. Representative Kalaki. Well, I want to apologize to the committee yesterday. I got overheated over our shared home kind of discussion. And I took the heart with the chair set about the tenor of our relationships. And as we go into the next two or three weeks, I really want to hold each of you dear. And so I apologize if I became strident or sharp. And I also apologize to our presenters last night. I wrote them and they're giving us their best selves. And I did not bring my best self forward in the conversation yesterday. So anyway, thank you all for that. And I really do chair or says committee. And to me, it's a reminder of keep that blood sugar up without gaining 10 pounds over the next two weeks. Cause the sitting and sitting and talking is exhausting. So just before we go, I just want to make sure that you saw that Ron has posted the article from WBOR. Another article, and if I think about it, I'll share it this way too. We didn't talk about it today, but there was an article in the New Yorker magazine about a month ago about investment groups buying up mobile homes in other parts of the country. And then what happens is what happens, you know, it happens often, right? They decide they need to cut expenses. And so infrastructure needs drop off, garbage pick up drops, you know, just the maintenance of the park drops off the rents go up. And it's a pretty fragile ecosystem. The mobile homes, mobile home parks are very fragile ecosystems. And so we haven't seen it. I don't think we've seen it in this state yet. We're somewhere in out-of-state company or investment firms come in to buy up the real estate and treat these parks, you know, in ways that make the living situation more difficult. Our protections when home, when parks go up for sale, are pretty robust in terms of time frames and trying to get the owners to decide or the residents to basically give the residents a right of first refusal to see if they can put together a syndicate to put together. And we have an infrastructure that's growing in Vermont. I think we took testimony that said we're up to like 18 cooperative parks or total, you know, we're growing our numbers of protecting parks in that way. But anyway, it's just another mobile home parks are integral part of our mobile home, our affordable housing infrastructure. So it's just, it might just be more reading for us to just be aware of moving forward. I don't think it has any direct impact on the budget this year, except for in terms of that fear. So, but it's out there. All right, let's go have lunch, speaking of blood sugar and we'll see you on the floor and then we'll see you back in committee afterwards.