The Vermont Housing Finance Agency (VHFA) board of commissioners has reserved its annual federal low-income housing tax credits (LIHTCs) to support the construction of 109 permanently affordable apartments in four communities across the state.

iQoncept/Adobe Stock
iQoncept/Adobe Stock

The sale of this year’s tax credits to investors is expected to yield nearly $25 million in funding, which will cover an estimated 55% of total project development costs.

Projects receiving housing credits include Central and Main, a new 30-unit building being developed by Windham & Windsor Housing Trust and Evernorth with 23 affordable units, including six for households experiencing homelessness. The building will fill in a vacant lot in the heart of the historic town center in Windsor.

Also in the Upper Valley is Prospect Place in Hartford by Twin Pines Housing Trust and Evernorth. The developers will build 30 affordable apartments in a new 42-unit mixed-income building, eight of which are reserved for households experiencing homelessness.

O’Brien Farms will be developed and managed by Summit Properties. The O’Brien Hillside project is a large master-plan development in South Burlington, including both homeownership and rental homes. The O’Brien Farms building that received tax credits is a 47-unit mixed-income building with 32 affordable units, including eight reserved for households experiencing homelessness. The project will also include a second mixed-income, 47-unit building next door, which will apply separately for federal bond tax credits next month.

Downstreet Housing & Community Development and Evernorth will develop Fox Run Apartments in Berlin. The town of Berlin received a New Town Center Designation for the neighborhood to allow for additional public infrastructure and redevelopment of the area. The project will include 30 new apartments—24 will be affordable, six of which will be set aside for households experiencing homelessness. The project was partially funded by tax credits last year, with the understanding that the sponsors might need to apply for additional funding to move the project forward.

Firehouse Apartments in Bristol, which also received tax credits last year, received an additional supplement of tax credits in recognition of the escalating development costs seen during the pandemic.

For the fourth year in a row, every project sponsor will reserve at least 25% of the new tax credit apartments for households that are either experiencing or at risk of homelessness. To date, state and federal housing tax credits have helped develop 434 affordable apartments paired with supportive clinical and social services devoted to Vermonters experiencing homelessness. The 28 new apartments for households experiencing homelessness developed with this year’s awards will provide an important resource to help shift families from temporary emergency housing into permanent affordable homes.

Vermont housing leaders envisioned pairing American Rescue Plan Act (ARPA) funds with LIHTCs. However, due to incompatibility issues with the two programs, Vermont was at risk of losing this opportunity to put federal dollars to their best use, said officials.

Officials say Vermont’s congressional delegation was the first to recognize this problem and are leading national efforts to seek a solution. Sen. Patrick Leahy (D-Vt.) recently introduced the LIFELINE Act to allow states to make long-term loans with ARPA funds to tax credit developments, with strong support from Sen. Bernie Sanders (I-Vt.) and Rep. Peter Welch (D-Vt.). Together, Vermont’s congressional delegation will continue to work with their colleagues in the House and Senate to solve this challenge.

“Safe, quality, affordable housing is a human right, period,” said Sanders. “At a time when we are experiencing nothing short of a crisis of affordable housing in Vermont and across the country, we must make sure that federal funding to address this crisis is put to work quickly and efficiently to serve working families, seniors, and all those lacking stable housing. The good news is that when we invest in affordable housing, entire communities benefit. I look forward to seeing all the good that comes of these critically important projects across our state for years to come.”