Business community criticizes housing bill

03/05/08 5:50PM By John Dillon

(Host) Real estate developers are criticizing a housing bill that they say will make projects more expensive.

The Legislature is expected to debate the bill when it returns from its Town Meeting break. But some in the business community say it's better to let the bill die, rather than pass it in its current form.

VPR's John Dillon reports:

(Dillon) Creating more affordable housing is a top priority of both the Douglas administration and the Democratically controlled Legislature.

Several House committees have worked on a bill that's designed to spur new housing development. But Tayt Brooks of the Vermont Homebuilders Association called a news conference to say the bill will backfire.

(Brooks) ``There are a number of us here today who believe this bill will actually be a detriment to housing and actually have unintended consequences of actually making building here in the state more expensive.''

(Dillon) The bill is supposed to encourage development near downtowns. If they build there, developers would get a break from certain environmental review.

But the developers object to a provision that says 20% of the project has to be affordable. The bill pegs the affordability level at $220,000. The Douglas administration wants to set the level at a higher price -- $275,000 -- and says 15% of the project should be affordable.

John Hausner is with Homestead Design in Essex. He said the bill's affordability requirement will drive up the cost of all other housing.

(Hausner) ``The unfunded mandate for affordable housing would basically create, I think, profit losses to any for-profit builder that could be any where from $40 to $50,000 a unit, conservatively.''

(Dillon) The legislation would also tighten development review in rural areas in an effort to control sprawl. The builders and their allies don't like that requirement either.

George Malek of the Central Vermont Chamber of Commerce said the bill's restrictions mean very little new housing will be built. Malek would like to see the legislation scuttled, unless lawmakers go back to the original version proposed by the governor.

(Malek) ``I'm enough of a pessimist to say that it's way too late in the session, that the only thing to look for at this point is for this bill to die.''

(Dillon) Tony Klein is a Democratic lawmaker from East Montpelier who's tried to find compromise on the bill. Klein listened as the homebuilders talked to reporters.

(Klein) ``You can't afford to make a mistake. You pave something over, you don't get it back. What I heard today was let's remove restrictions and let's make it easier for expensive homes to be built in areas where we want to build them.''

(Dillon) Klein said writing the bill is a challenge, because it touches many interest groups, including developers, environmentalists and affordable housing advocates.

For VPR News, I'm John Dillon in Montpelier.

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