VermontS.1272025-2026 SessionSenateWALLET

An act relating to housing and housing development

Sponsored By: Sponsor information unavailable

Signed by Governor

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Bill Overview

Analyzed Economic Effects

14 provisions identified: 9 benefits, 1 costs, 4 mixed.

Rental funding targets households facing barriers

For at least five years, landlords receiving covered rental improvement aid must work with approved partners to house qualifying tenants. These include households exiting homelessness, working with immigrant or refugee resettlement programs, or displaced by natural disasters. Households receiving or approved for Medicaid-funded home and community services or Social Security Disability Insurance also qualify. Approved organizations can hold master leases to serve these groups, and participating landlords must accept vouchers. At least 30% of annual program disbursements support five-year awards; funds unused after nine months become available for ten-year loans.

Renters gain access and discrimination protections

Landlords cannot charge residential rental application fees or require a Social Security number to complete an application. For background or credit checks, they must accept an unexpired government ID, Individual Taxpayer Identification Number, or Social Security number. The law protects citizenship and immigration status in housing, lending, permitting, harassment, and public accommodations. Federal-law-required checks or different treatment remain allowed for home sales and rentals. Lenders may consider immigration status only when relevant to loan repayment rights and consistent with federal law.

Manufactured homeowners get repair grant options

The law creates manufactured-home assistance through statewide or regional nonprofit housing organizations. Community owners can receive up to $20,000 for specified small capital projects. Homeowners can receive up to $15,000 for foundations or approved slabs, site work, and connections on vacant community lots. Owners whose manufactured home is their primary residence can also get help with habitability and accessibility needs.

Rent caps stay, tenant preferences end

For at least ten years, covered rental improvement loans limit rent plus utilities not included in rent to local HUD fair market rent. Landlords may accept an available housing voucher above that limit. The law removes these loans' required preference for specified household groups. It also removes the former fallback income limit of 80% of area median income and related tenant approval requirements.

Housing projects use future tax growth

Approved projects retain up to 75% of education property tax growth, or 85% for qualifying affordable or moderate-income developments. Retention lasts up to 20 years from the first debt year; towns retain at least 85% of municipal tax growth. Affordable developments require at least 15% affordable units; moderate-income developments require at least 25% moderate-income units, preserved through debt retirement. Moderate-income housing costs cannot exceed 30% of gross income at 150% of the highest applicable county, area, or state HUD median. Retained money pays allowed project costs, while original-value education taxes still go to the Education Fund; units must remain primary homes until debt retirement, documented every two years.

Towns gain housing financing, lose appeals

Towns can apply to use future property tax growth to finance housing infrastructure, with applications due December 31, 2035. Projects must devote at least 60% of projected floor area to housing or meaningfully advance the program's purpose. Non-affordable projects must show that tax financing is needed for development to occur as planned. Municipal approval, a housing infrastructure agreement, and Council plan approval are required before the sponsor incurs debt. Annual approvals cannot exceed $200 million in lifetime education tax retention, and Council approval or denial decisions have no contested-case hearing or court review.

Homebuyers gain alarm choices and fixes

Beginning July 1, 2025, single-family homes being built, sold, or exchanged can use photoelectric or UL 217-compliant smoke alarms. Sellers must certify qualifying smoke and carbon monoxide alarms at closing. Buyers must notify sellers by certified mail within ten days after transfer about missing or broken alarms to require correction. Rules must require stores selling these alarms to post approved guidance on alarm types, placement, and installation.

Subsidized renters get yearly increase limits

The Rental Housing Revolving Loan Program supports rental developments serving middle-income households. Covered subsidized units limit annual rent increases to 3%, unless the Vermont Housing Finance Agency authorizes another amount. The affordability period lasts seven years or the full loan repayment period plus three years, whichever is longer.

Housing cleanup gets priority and funding

The state must prioritize brownfield cleanup review for sites containing housing or planned for single-family or multifamily housing construction or rehabilitation. For fiscal year 2026, it may spend up to $2 million from the Environmental Contingency Fund. That money supports brownfield assessment, planning, and cleanup. Review priority does not guarantee approval or funding for a particular site.

Developers gain soil options with safeguards

Projects can manage qualifying development soils at locations authorized through an insignificant waste event approval. Soils must come from hazardous-materials sites covered by approved cleanup or soil management plans. Required testing covers arsenic, lead, and polyaromatic hydrocarbons, with monitoring to prevent pollution above groundwater limits. The state must approve the location's suitability, soil cap, and management plan for activities disturbing the soil. The permittee must record the soil location in land records.

Rental owners get grants and forgiveness

Covered rental improvement awards provide up to $50,000 per unit, plus up to $20,000 for work meeting visitable accessibility standards. Ten-year loans receive prorated forgiveness for each year of participation, replacing the former 10%-per-year credit. Converted grants also receive prorated credit for past participation; conversion requires Department and approving housing organization consent. Organizations administering specified program activities are exempt from state lending laws for those activities only. Repaid or returned money goes back into the program fund for program and administrative costs.

Towns get loans supporting new housing

The Vermont Bond Bank establishes the Vermont Infrastructure Sustainability Fund for infrastructure supporting new housing. It provides low-interest loans or buys municipal bonds. Projects must add reserve capacity needed for new homes and directly support housing production. Towns must own and operate the infrastructure throughout its useful life. Loan repayments support future projects through the revolving fund.

Landlords must file yearly rental details

Rental-property owners must file a rent certificate with the Department of Taxes by January 31 each year. It lists renter names, property address and school property account number, and owner or landlord contact details. Owners must also report unit types, counts, ADA-accessible units, and additional information required by the Commissioner.

Towns face housing debt repayment safeguards

Each municipal borrowing needs majority voter approval at a duly warned meeting, with debt terms fully disclosed. Towns must borrow within five years of site creation, unless the Council grants up to three more years. Interfund loans carry no interest, but towns remain responsible for principal and interest when site tax growth falls short. Beginning July 1, 2025, project accounts need audits by April 1 annually through the year after education tax retention ends. Education Fund underpayments are due upon billing; after 60 days unpaid, the state may withhold town or associated school district payments.

Sponsors & Cosponsors

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

All Roll Calls

Yes: 290 • No: 124

House vote • 5/30/2025

Which was agreed to on a Roll Call Passed -- Needed 70 of 139 to Pass -- Yeas = 137, Nays = 2

Yes: 137 • No: 2 • Other: 1

House vote • 5/23/2025

Which was disagreed to on a Roll Call Failed -- Needed 70 of 139 to Pass -- Yeas = 53, Nays = 86

Yes: 53 • No: 86 • Other: 1