Charlotte to revive affordable housing fund

By MADELINE HUGHES

In the mid-2000s Charlotters voted to create a fund that allocated tax dollars to build affordable housing. The fund currently has $140,000 in it for grants. The money was added over a decade ago but has since remained unused.

On Monday night, the Selectboard will consider amending the fund’s grant policy in order to revive the program.

A working group of four residents appointed by the Selectboard – Peter Richardson, Kate Lampton, Michael Russell and Nancy Wood – debated for months about potential changes to the program to make it more enticing for Charlotte residents to use.

The group is recommending five main changes to policies and procedures for the fund:

• Withdrawing and revising the previous priorities for funding approving grant applications for Charlotte residents over nonprofits, rentals over sales, and rehabilitation over construction.

• Allowing grants awarded to Charlotte property owners to be repaid without financial penalties after 5 years which would remove the original “perpetual affordability” requirement of  99 years.

• Increasing the maximum awards to $30,000 per unit and $100,000 per project.

• Allowing grants to be used in conjunction with density bonuses, but requiring that such projects maintain perpetual affordability stated in the zoning bylaws.

• Permitting the Selectboard to use funds from the program to pay for marketing.

Wood’s quest to revive the fund started “at town meeting two years ago the Selectboard asked voters to lend money in the (affordable housing) fund to something that had nothing to do with affordable housing,” Wood recalled. “And that money was voted by taxpayers to be used to develop affordable housing.”

This year on Town Meeting Day Wood asked about the fund’s status. That’s when the Selectboard created the working group to brainstorm how to restart activity with the fund.

Wood said the fund was created before the 2008 recession. Home prices were high, and “people working in town couldn’t afford to live in town,” she said. “It’s also to encourage more families to move here because our school system, like other parts of the state, is losing children.”

Funding development

Many affordable housing projects are funded by the state and federal government. However, when a local municipality takes an interest in helping to fund the projects it helps to fill budget gaps and attract more programs to an area.

“We often have to use multiple funding sources, so adding one more source helps us make a home that much more affordable,” said Amy Demetrowitz, director of real estate development for the Burlington-based nonprofit Champlain Housing Trust.

The Champlain Housing Trust previously used the Charlotte grant program for the Hagan Hill Condominium Association project by developer Steve Davis, which built five affordable condo units in Charlotte. Habitat for Humanity was another nonprofit organization that utilized this fund to build houses.

Josh Hanford is Deputy Commissioner of Housing for the Vermont Department of Housing and Community Development. “If a municipality has an affordable housing grant program, it fills a gap in the budget and shows a community investment in projects,” he said.

Charlotte’s program does not pave the way for mass development because of the relatively small size of the fund.

“Where we are in the process is to look at the existing program and identify the (current) problems, then propose ideas to make it work better,” Richardson said.

Under the recommendations from the working group to remove perpetual affordability, a developer could repay a grant without penalty or interest, Richardson said, but the fund is not supposed to be a revolving loan fund. If people abuse the five-year time period, the Selectboard could revisit the perpetual affordability requirement, he said.

The Charlotte working group has also identified affordable senior housing as a priority. Potentially combining local grant money with zoning density bonuses that require perpetual affordability could be an incentive for developers to include affordable units in a project because it would be possible to build more units per development.

The Selectboard next will to consider the working group’s recommendations.

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