New housing incentives bring opportunities

Larry Lewack, Charlotte Town Planner

With housing prices at an all-time high, rental vacancy rate below 3 percent, few properties on the market and interest rates stuck at 7-9 percent, everybody’s talking about the housing crisis.

But did you know that the terms for what housing can be built in Vermont have recently changed? And that major public funding is now available to homeowners to renovate existing rentals and build new housing?

To be sure, not everyone can build new residential units on their property. However, if you’re ready to take that long-delayed housing dream off the shelf, read on.

In 2023, the Vermont Legislature adopted Act 47, the Housing Opportunities Made for Everyone (HOME) Act. This ground-breaking change in state statute outlawed single-family zoning in Vermont. It mandated that all communities allow for higher-density housing in areas served by public water and sewer capacity, and it reduced on-site parking requirements. It also provides significant financial incentives to property owners to upgrade existing rental housing and to build new accessory dwelling units. While not all these changes are relevant in Charlotte today, here are two that matter now:

  • Duplexes are now a permitted use across most of town. With the exception of Thompson’s Point, the conservation district and flood-hazard zones, any residential property in town that now allows single-unit dwellings can legally have a duplex if they have adequate septic capacity to serve the total number of bedrooms. Such renovations require only a zoning permit.
  • Accessory dwellings are now allowed across most of town: Any property with a permitted single-unit dwelling can now add an accessory dwelling unit that’s up to 1,500 square feet, with just a zoning permit, assuming adequate septic capacity, and that the house is not within one of the zoning districts listed above.

Here’s what’s new as of March 2024: The state of Vermont has rolled out the second round of grant funding to property owners to build new accessory dwelling units, and to renovate existing rental housing. The Vermont Housing Improvement Program provides individual five-year grants or 10-year forgivable loans to cover up to 80 percent of the cost for these building projects:

  • Rehabilitate existing vacant rental units
  • Repairs affecting multiple rental units, such as replacing the roof of a multi-family property
  • Develop a new accessory dwelling unit on an owner-occupied property
  • Create new units within an existing structure
  • Create a new structure with five or fewer residential units
  • Complete repairs necessary for code compliance in occupied units.

Based on the type of project, property owners are eligible to receive up to:

$30,000 per unit for rehab of efficiency, one- and two-bedroom units

$50,000 per unit for rehab of three or more bedroom units, renovations impacting multiple units, creating new units or creating accessory dwelling units.

Of course, there are some strings attached to this funding. They include:

Program match — All participants are required to provide a 20 percent match of the award. e.g., a participant who receives an award of $50,000 will be required to provide a $10,000 match.

Fair market rent — Participating property owners are required to sign a rental covenant agreeing to charge at or below HUD fair market rent for the length of the agreement (five or 10 years).

Find out more, email or call 802-810-8217. It’s also a good idea to call the planning and zoning office at 802-425-3533 ext. 2, if you have questions or to schedule an appointment to discuss your project ideas.