In most places, when a new housing development brings an influx of families with children, property taxes go up. When I moved to Norwich in 2001, I was surprised to discover that my property taxes would actually go down if we could get families with children to move here. It seemed counterintuitive.
Given the dire shortage of housing in the Upper Valley, especially affordable housing, could Vermont borrow from the creative playbook it used to equalize school payments, so that cities and towns have a meaningful incentive to welcome affordable homes into their communities?
Resistance to affordable housing can, in part, be traced back to the massive public housing initiative after World War II. Many of these projects caused a blight. The government then shifted gears and used the private and nonprofit sectors to develop and manage smaller, subsidized projects. However, the stigma from earlier times meant that most of this housing ended up in less affluent and/or liberal neighborhoods. For example, the Jamaica Plain neighborhood in Boston ended up with lots of subsidized housing while neighboring West Roxbury had none.
The Upper Valley suffers from the same pattern, as Jim Kenyon pointed out in his February article (“Twin Pines apartment plan faces a flat rejection from some Hartford residents,” Feb. 20). Three key factors make Hartford more attractive than neighboring communities:
■Land prices: Hartford land is less expensive than many neighboring towns.
■Infrastructure: Hartford has municipal water and sewer, which allows for greater density. Without water and sewer it is almost impossible to build multifamily, affordable housing.
■Less opposition: Local residents and town officials have been more welcoming.
By contrast, other Upper Valley towns are both resistant and prohibitively expensive. When Twin Pines and Evernorth developed a 34-unit project in Woodstock, it took nine years and several court battles before they could even start construction of Safford Commons. Thanks mostly to the extraordinary advocacy and financial support of a group of Woodstock residents, developers did not abandon the project.
There is a desperate need for housing in the Upper Valley, especially affordable housing. According to the three regional planning commissions that service the area, we need another 10,000 units of housing by 2030.
Unfortunately, the need for more housing overall gets sidelined when individual projects take the stage. Neighbors have substantial clout. Those living in single-family homes often voice a strong preference for low-density development or open space. There is also fear that families with low incomes will not be good neighbors and will bring down the value of nearby homes. While numerous studies document the fact that well-maintained, affordable housing does not decrease property values or increase neighborhood crime, neighbors are rarely persuaded.
For towns like Woodstock and Norwich, there is no economic incentive to allow developers to build multifamily housing, especially for lower-income families. Some residents believe their town should create more diverse housing options, but they generally have in mind small-scale, moderate-income homeownership. Advocates for larger, multifamily projects, including the dedicated, hardworking members of the town’s affordable housing committee, generally lack the power and resources to make that happen.
The state of Vermont has taken steps to overcome NIMBY (“Not In My Back Yard”) attitudes. It has given municipalities a tool. A town can designate a project as “priority housing” as long as it is in certain defined areas like the downtown or a village center. The project must include at least 20% affordable units. Once it is designated a priority project, a housing development is eligible for streamlined permitting, reduced application fees and tax credits.
This designation provides a meaningful incentive for developers, but what about the towns and their residents?
In 1997, in order to equalize school funding, Vermont removed the education component from local property taxes and established a statewide property tax to fund schools more evenly.
How about employing a similar strategy for affordable housing? Suppose towns received an annual allocation of state money based on the number of affordable housing units they currently have. In addition to the taxes that these properties contribute to the tax base, if it were supplemented with state funding, communities might feel encouraged to come together to look for suitable land. Imagine a selectboard meeting in which people who wanted to hold down their property taxes, or get important infrastructure projects built, showed up to endorse an affordable housing project.
As with any proposal, there would be complications to navigate. For example, would only subsidized units be eligible or could we also count unsubsidized units that charged affordable rents? Also, 10- or 20-unit affordable housing complexes in very small towns may not be practical.
But the perfect should not interfere with the good. Fact is, there is a pressing need for more housing in the Upper Valley, especially affordable housing. To take advantage of the millions of federal dollars currently available for housing, we need to create meaningful incentives so cities and towns become more welcoming.
Until he retired in 2019, John Vogel taught real estate and nonprofit management at the Tuck School of Business at Dartmouth. He currently serves as co-chair of Evernorth, a nonprofit organization that provides affordable housing and community investments in Maine, New Hampshire and Vermont.