State says housing affordability help on the way
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By DANIEL BARLOW Vermont Press Bureau - Published: March 9, 2007
MONTPELIER — The Legislature and governor are both promising action on the cost of housing in the state.
The average price of a home in Vermont grew to $197,000 last year, putting the dream of home ownership out of reach for 67 percent of residents, according to a report released Thursday.
For the sixth year in a row, a report on home and apartment prices in Vermont has painted a bleak picture of the growing gap between wages and home prices, which leaves a strong majority of Vermonters unable to afford their housing.
The average house price increased by 8 percent last year, according to the report, meaning that a family would need to earn about $66,000 to purchase a house. Only 33 percent of Vermont households meet that threshold.
The report, compiled by a coalition of state agencies and nonprofit housing groups, should be seen as a call to action, according to Molly Dugan, the deputy commissioner of the Vermont Department of Housing and Community Affairs.
"This shows us that the gap between housing prices and wages continues to grow at an alarming rate," she said Thursday, hours after the report was unveiled at a press conference in Winooski. "The problem is screaming out for bold and innovative solutions."
The report — a joint effort of the Vermont Housing Council and the Vermont Housing Awareness Campaign along with several other agencies and groups — details sobering statistics on the state's housing market, including that the average price of a home has risen 97 percent since 1996.
Other statistics in the report include that the cost of new housing has increased by 15 percent to $282,000, meaning that a Vermont family would need an annual income of $93,000 to afford to build a new home.
Also, the average monthly rental for a two-bedroom apartment was about $797 last year, an increase of 10 percent since 2005 and a 42 percent increase in 10 years. A household would need to earn $31,987 a year to afford that rent.
"Although we've seen a real estate slowdown recently, the price of homes is still a problem," said Sarah Carpenter, the executive director of the Vermont Housing Finance Agency. "Action is critical at this stage."
While the report did not carry any good news concerning Vermont's economic and housing condition, Dugan said she is optimistic that the situation may change as the issue gains more attention.
That may not result in a major dip in the gap when the report is released next year, she said, but it means politicians are listening and that the public is demanding change.
"Word is getting out," she said. "The culmination of the work here is raising the profile of this issue."
There are several bills in the Vermont Legislature that would address the state's high housing prices and lack of new home building.
The New Neighborhoods initiative, proposed by Gov. James Douglas, would create tax incentives to grow already existing housing developments in communities. The second, which is supported by many affordable housing advocates, would create special zoning areas to ease the construction of new homes.
Douglas expressed dissatisfaction Thursday with the speed of the Legislature in reviewing his proposal, according to spokesman Jason Gibbs.
"Unfortunately, the legislative majority has not demonstrated that it understands just how important affordable homeownership is to our future and has basically ignored the governor's proposals to make homes more affordable," Gibbs said.
But Rep. Helen Head, D-South Burlington, the chairwoman of the House General, Housing and Military Affairs Committee, said she just received the dueling proposals about six weeks into the session.
She said the committee will hold hearings on the two proposals on March 15. She said it was too early to give her own thoughts on the bills, but said there is enough urgency that action needs to occur in this session.
"These are very new proposals," Head said. "And we'll look closely at each of them."
Contact Daniel Barlow at daniel.barlow@rutlandherald.com.
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