Economy Part 2: Housing

Housing is one of the three essentials of human life.  Vermonters are steadily being priced out of the housing market because of stagnant wages and non-resident buyers. 

The median price of a home in Vermont was $200,000 in 2008.  To afford this price a potential buyer would need at least $63,000 in family income; however, Vermont's median income is $51,566.  This means that most Vermonters can't buy this home. 

The median income earners are in the market for homes priced at $160,000 or less - assuming they have enough savings for the down payment and closing costs.  At this level and below are mobile homes with land and "fixer uppers." Thus, the traditional "starter home" is out of reach for young couples and others wanting to get into their own home.

Housing Alternatives

One answer is to increase owner-occupied rental properties.  This type of real estate allows the owners to purchase more building than they could hope to in a single-family home.  It allows the building owners to build equity faster and also potentially provides more affordable rentals.

Another is clustered housing with homeowners holding the land in common.  The legislature could put into place tax incentives for development of this type.  I would rather see this enacted at the local level than at the State.  I would rather that communities provide tax incentives to developers and the State would make up the difference in the tax loss, especially for education funding.

This development should be focused in, or adjacent to, village centers.  Towns should be working toward more centers within walking distance that limit the need for vehicle trips to get to shopping and services.

Vermonters Helping Vermonters

We can encourage these two housing options using State Employees' and Teachers' retirement funds. Instead of sending this money out of state to invest in Wall Street, let's keep it here to house people. As these people prosper so will the retirement funds.

I suggest taking the next year's worth of payments into the retirement system (both the employee's and State's shares) and investing it through the Vermont Housing Finance Agency and the Vermont Community Loan Fund.

This money would be targeted to the two types of housing I mentioned, either new or existing. The exact rules could be worked out either in the legislature or the agencies but it should have a preference on low or middle income Vermonters.

This is just my opinion, what do you think??