Moving Towards Home: Strategies for Ending Homelessness in Ten Years
City of Burlington, Vermont
February 2004

People are homeless because there isn't enough affordable housing.

"Every study that has looked has found that affordable, usually subsidized, housing prevents homelessness more effectively than anything else." 

Shinn and Baumohl, Rethinking the Prevention of Homelessness, The 1998 National Symposium on Homelessness Research.

In 1970, there were 300,000 more affordable housing units in the country than there were low-income households who needed to rent them. By 1995, the number of low-income renters exceeded the number of low-cost units by 4.4 million.

Housing is generally considered to be affordable when a household pays no more than 30% of pre-tax income for housing and utilities.[1]

In the 1960s and early 1970s, there was, generally, lots of housing - and it was affordable. In 1970, there were 300,000 more affordable housing units available nationally than there were low-income households needing to rent them.[2]

• Locally, real estate prices in Burlington in the 1980s spiraled - with accompanying spiraling rent increases. The City attempted to apply a moderating influence with a voter-approved municipal anti-speculation tax, but saw that measure rejected by the state legislature. 
• The City was successful in developing 226 new affordable housing units in the 1980s (through, among other things, the HODAG program) as well as preserving 336 affordable units at Northgate. 
• In the 1980s, the City also established a municipal land trust, a $1 million line of credit for land trust purchases, a condominium conversion ordinance, a municipal housing trust fund, and a housing replacement ordinance - and, in 1990, an inclusionary zoning ordinance.

By 1995, there were 4.4 million more low-income renters in the United States than there were low-cost rental units. And the problem was getting worse. While the number of households needing housing support increased, the number of units affordable to them decreased - between 1991 and 1997, 370,000 unsubsidized units affordable to extremely low income renters were lost.[4]

• Locally, over 100 housing units developed during the 1990s were made affordable through Burlington's inclusionary zoning ordinance. 
• 228 additional affordable units were developed in Burlington during the 1990s, principally using the Low Income Housing Tax Credit. 
• During the 1990's, there were 56 new affordable units developed in Chittenden County outside Burlington.

On a national level, there were a variety of market forces and other factors throughout the 1990s that contributed to the ongoing crisis in housing affordability- including the continued migration of people and jobs to the suburbs, regulatory barriers to developing multifamily (as opposed to single family) housing, underinvestment in affordable housing by many local communities, continuing discriminatory housing barriers, and the simple economics of supply and demand in which rising incomes for higher income families drove up rents faster than poorer families could afford.[5]

• In Vermont, the housing boom peaked in the mid-1980's. Production of new housing dropped sharply after that. Between 1990 and 2000, Vermont added only enough new housing units for 83% of its new households - leaving the other 17% to compete for the existing housing stock, with associated increases in housing prices.[6]
• By the end of the 1990s, the number of assisted units available to low and moderate-income renters in Chittenden County was meeting less than half the demand.[7]
• At that point, Burlington and the neighboring municipality of Winooski - with around one-third of the County's population - were home to 68% of the County's publicly assisted affordable housing units and 74% of the County's publicly assisted tenants.[8]
• Currently, around 25% of the City's apartments are affordable to low-income households due to Section 8 or equivalent rental assistance.

There has been a persistent housing availability and affordability crisis in Burlington and the surrounding region:

• The rental vacancy rate in Chittenden County was at or below one percent from June 1996 to June 2001.[9]
• Apartment rents rose between 5 and 9 percent each year between 2000 and 2002.[10]
• Burlington area renters now need to earn $16.35 per hour to afford a two-bedroom apartment - an increase of over 20% since 2000.[11]
• The median price of a single-family home in Chittenden County increased by over 33% between 1999 and 2002.[12]
• An extremely low income household (earning $19,680, 30% of the Area Median Income of $65,600) can afford monthly rent of no more than $492, while the Fair Market Rent[13]  for a two bedroom unit is $850.[14]
• Seventy-six percent of those on the public housing and Section 8 tenant-based assistance waiting lists at the Burlington Housing Authority are extremely low income.

The housing shortage disproportionately affects minorities.[15]

• In 2000, a local fair housing study found evidence of racial discrimination in 46% of rental housing tests, while a 2002 sales audit study found a 48% incidence of racial discrimination in the home buying market.[16]

The local housing shortage in the last decade has coincided with a dramatic increase in the number of homeless families. In 1995, 73 homeless families sought services through the Burlington-based Committee on Temporary Shelter. In 2000, the number had risen to 330.

• This past year, 142 families who requested emergency shelter from COTS had to be turned away or added to a wait list, to be granted shelter at a later time.

Housing programs do exist to address these issues, but they are not adequately funded or sized to meet the need.

• Federal rental housing subsidies can help address the problem, but here again supply does not keep up with demand. Nationally, the number of units receiving direct federal subsidies dropped by 65,000 between 1995 and 1999.[17]
• The Burlington Housing Authority, in contrast, substantially increased the number rental assistance subsidies it has available - from 416 units in 1995 to 1,711 units in 2003. However, even with that increase, the number of people on BHA's waiting list has remained about the same - around 900 to 1,000. 
• The Low Income Housing Tax Credit program helps to funnel private investment into new affordable housing development, but again - resources do not meet the demand. Vermont's allocation of federal tax credits under this program has been increased from $700,000 to $2 million annually - but there are still more requests to assist potential projects than there are credits available.

The largest federal housing assistance program is the entitlement to deduct mortgage interest from income for tax purposes.

Federal support for the housing sector focuses most of its resources on supporting homeownership.

• For every one dollar spent on low income housing programs, the federal treasury loses four dollars to housing-related tax expenditures, 75% of which benefit households in the top fifth of income distribution.[18]
• The Section 8 new construction/substantial rehabilitation program alone funded the construction/rehabilitation of 4,100 affordable apartments in Vermont between 1976 and 1985 (when the program was abolished). Over the next twelve years, only 2,384 units were built in Vermont with every remaining form of federal assistance combined.[19]
• Other than the HOME program, which was created by Congress in 1992, there have been no new federal programs designed to stimulate new rental housing production for the past 15 years.
• The federal Low Income Housing Tax Credit is the only program specifically for new production, and applications for tax credits far exceed the amount available. For example in the semi-annual application round of August 2002 for the State of Vermont, the total credits requested were approximately $2.7 million and the credit available was approximately $650,000. 

The City of Burlington and the State of Vermont have historically aggressively used private investment to develop affordable housing through the Low Income Housing Tax Credit. The City and the State have also supported new housing development through their Community Development Block Grant funds (with each allocating around one-third of those funds annually to support affordable housing) and HOME investment partnership funds. In addition, the City has historically supported the creation and preservation of affordable housing through its Housing Trust Fund and Inclusionary Zoning, Housing Preservation and Replacement and Condominium Conversion ordinances.

• Since 1987, the Vermont Housing and Conservation Board has invested $92 million of state funds in affordable housing. This has helped to generate over $320 million in construction activity, created approximately 10,000 jobs in Vermont, and created or preserved over 6,000 units of housing. However, the need for affordable housing far exceeds what the resources can deliver.[20]
• Over 500 new affordable units were built in the greater Burlington area in the last 3 years, at a cost of around $71 million. That rate of new housing creation was made possible in large part because a state surplus and successful advocacy made possible a $10 million state appropriation to support affordable housing development. We will not be able to sustain that rate without new federal and/or state appropriations to support it.

Considering northwestern Vermont as a whole, each year through 2010, 350 new renter households earning less than 80% of median are projected to become part of our regional economy. If each of these households requires a publicly-assisted unit at an average public investment of $30,000 per unit, it will take $10 million a year just to meet the anticipated new demand for assisted housing in the six-county region surrounding Burlington - without addressing the current unmet need.[21]

In November of 2001, Mayor Clavelle appointed a politically diverse group of stakeholders representing housing developers, builders, lenders, tenant and landlord advocates, and planning and preservation professionals to serve on an Affordable Housing Task Force.

• The Task Force held 15 meetings, including two public hearings, between November 2001 and June 2002 to gather public comments, assess Burlington's current housing conditions, review regulatory impediments to creating more housing and to explore changes needed at the local, regional, state and federal level to encourage more affordable housing development and preservation throughout the region.
• The Task Force issued a set of 67 recommendations, adopted by City Council in the fall of 2002.  This Plan incorporates all of those recommendations.

 Page last updated March 5, 2004