Workforce Housing

This week, legislators continued to explore approaches to address Vermont’s housing needs while bolstering economic growth statewide. During a Senate Economic Development, Housing and General Affairs Committee session, industry experts examined offsite construction for modular housing. The hearing detailed offsite building techniques, highlighting both cost efficiencies and operational challenges, while state officials stressed the importance of land factors and ongoing housing operations. The testimony concluded by outlining potential solutions and policy reforms needed to support sustainable housing development.

Parallel discussions centered on modernizing Vermont’s housing stock and infrastructure, with the Vermont Housing Improvement Program (VHIP) at the forefront. VHIP has successfully funded the rehabilitation of more than 1,000 housing units through a combination of grants and loans. Despite challenges such as fluctuating fair market rents and high costs associated with accessory dwelling unit projects, lawmakers remain committed to refining strategies that support a robust and accessible housing market for Vermonters.

The House Commerce and Economic Development and House General and Housing Committees are evaluating proposals to modernize community development financing. Two initiatives—the Housing Infrastructure Initiative (HIT), championed by Let’s Build Homes, and the Administration’s Strategic Projects for Advancing Rural Communities (SPARC) proposal—were discussed as potential new development financing tools that compliment Vermont’s traditional financing model of Tax Increment Financing (TIF). Both proposals offer streamlined structures and enhanced technical assistance for local municipalities, aiming to better support community needs. While concerns were expressed regarding rural feasibility and impacts on local resources, proponents detailed comprehensive financing and technical assistance strategies to alleviate these challenges.

Housing committees do not appear to be taking up the Administration’s omnibus housing bill. Instead, they plan to incorporate select elements into new committee housing bills. Ensuring that any final legislation includes strategic funding, robust infrastructure support, and targeted regulatory relief is critical. As both House and Senate committees continue to refine omnibus housing bills, the Vermont Chamber will continue working with lawmakers to integrate these forward-thinking proposals that equip communities and developers with tools to address Vermont’s housing crisis.

This week, Vermont Futures Project Executive Director, Kevin Chu, testified before the House General and Housing Committee and the Senate Economic Development, Housing, and General Affairs Committee, presenting key insights from the Vermont Economic Action Plan. Testimony brought forth conversations about actionable steps to address the root cause of many challenges impacting Vermont businesses, focusing on a future of abundance rather than scarcity.

To advance Vermont’s economic future and improve affordability, Chu emphasized that Vermont must focus on increasing its population to 802,000 by 2035 through recruitment and retention of working-age people. Attracting new people such as remote workers, military retirees, and international professionals, will strengthen the workforce, support business success, and broaden the tax base. Additionally, Vermont should aim to increase the labor force participation rate to 70% by 2035 by aligning education with employer needs and reducing barriers to employment.

The ability to grow businesses in Vermont ties directly to housing availability and infrastructure. The plan sets a target of 350,000 non-seasonal homes by 2035 and calls for reduced development timelines alongside 40% reductions in regulatory costs. Legislators engaged with the presentation content and discussed the intersections of growth and migration with infrastructure and transportation improvements.

The Vermont Futures Project’s testimony reinforced the urgent need to solve problems, quantified the scale of action needed, and outlined incremental steps to improve affordability. The testimony demonstrates the critical need for policy to be informed by data. The Vermont Chamber will continue working with lawmakers to advance policies that support business growth, streamline regulations, and improve economic opportunities across the state.

Access the full Economic Action Report here.

Governor Phil Scott delivered his budget address on Tuesday, presenting a $9 billion spending plan focused on education reform, housing expansion, and public safety—without increasing taxes or fees. Emphasizing the need for long-term structural fixes rather than temporary funding patches, the Governor underscored the importance of making Vermont more affordable and competitive for businesses and working families. His priorities align closely with the Vermont Chamber’s legislative agenda, which advocates for affordability, workforce development, and strategic economic growth.

Fixing Education

With Vermont spending $2.4 billion annually on education while student outcomes remain inconsistent, the Governor proposed a major overhaul. His plan includes consolidating school administration into five regional districts to improve efficiency, standardizing student funding and teacher salaries, and expanding career training programs to better prepare students for the workforce. To prevent a projected 6% property tax increase, he proposed using $77 million from the General Fund—aligning with the Chamber’s focus on fiscal responsibility and affordability.

Building Housing That Supports Workforce Growth

Vermont needs at least 7,000 additional housing units to meet demand, support employers, and sustain economic growth. The budget fully funds the Vermont Housing and Conservation Board with $37 million and provides $4 million for the Vermont Housing Improvement Program to help small-scale landlords bring units to market faster. Additionally, a one-time $40 million investment in water, sewer, and stormwater infrastructure will unlock stalled housing projects. These measures support the Chamber’s call for workforce housing solutions that directly address Vermont’s labor shortage.

Strengthening Public Safety for Businesses

Rising crime rates, including a 40% increase in aggravated assaults and a doubling of retail theft since 2018, have significantly impacted downtown businesses. The budget proposes tougher sentencing for repeat offenders, increased funding for pre-trial supervision, and expanded addiction recovery services. These steps align with the Chamber’s advocacy for policies that create safe, vibrant economic hubs for businesses and communities.

Investing in Infrastructure & Economic Resilience

The budget allocates $858 million for roads, bridges, and public transit, expands Downtown and Village Center Tax Credits by $2 million, and creates a new disaster recovery fund to provide immediate relief for businesses impacted by natural disasters. With a $15 million investment in Efficiency Vermont, the state aims to support climate resilience without raising costs for ratepayers—an approach that dovetails with the Chamber’s focus on sustainable economic growth.

A Shared Vision for Vermont’s Economic Future

Governor Scott’s message was clear: Vermont must fix broken systems, not just fund them. His budget priorities reflect many of the Vermont Chamber’s legislative goals—fiscal responsibility, workforce development, housing expansion, and public safety improvements. As the legislative session unfolds, the Chamber will continue working to ensure that policies promote long-term economic stability, business competitiveness, and a high quality of life for all Vermonters.

A complete transcript of the Governor’s budget address can be found here.

Governor Phil Scott’s inaugural address delivered a clear call to action on the most pressing challenges, including affordability, housing, education reform, and workforce sustainability. These priorities reflect significant overlap with the Vermont Chamber of Commerce’s ongoing advocacy efforts, emphasizing shared goals to strengthen Vermont’s economy and improve the quality of life for its residents. Keeping affordability and Vermont’s challenging demographics at the forefront, the address focused on:

• Affordability and economic growth
• Addressing the housing crisis
• Student-centered education reforms
• Moving forward together

Affordability and Economic Growth
A central theme of Governor Scott’s speech was Vermont’s need to tackle its affordability crisis. He noted the state’s reputation as a high-tax destination and emphasized that Vermont cannot afford to lose more residents due to rising costs. A vision of achieving affordability through economic growth rather than tax increases aligns with the Vermont Chamber’s emphasis on fostering business resilience and attracting new residents. Both aim to reduce the financial burdens facing Vermont’s families and businesses while expanding economic opportunities.

The Governor’s message of bolstering opportunities for working Vermonters and supporting local communities parallels the Chamber’s push for innovative workforce development solutions. Efforts to promote Vermont as a destination for skilled workers and investing in community development directly impact the other challenges facing Vermont. The economic impact of a shrinking workforce remains a key focus for the Vermont Futures Project, which continues to highlight the issue and provide valuable data to support solutions.

Housing: A Shared Priority
The Vermont Chamber has long advocated for increased housing supply by addressing root causes and barriers to development. Governor Scott echoed this urgent need, calling for the construction of 8,000 new homes annually—a figure Vermont is far from achieving. The speech advocated for treating housing development as an emergency by streamlining regulatory barriers, investing in infrastructure, and revitalizing workforce. Affordable housing for all incomes is critical to retaining employees, attracting new talent, and fostering economic growth.

Education: Tackling Costs and Improving Outcomes for Students
The Governor delivered a pointed critique of Vermont’s current education funding model, highlighting dramatic cost increases that outpace the value delivered. With the current expected 5.9% increase this year, property taxes will have increased by 33% over three years, a trend further compounded by increases in education-related revenue sources, many of which depend on taxes collected and remitted by the business community. These include 100% of sales tax revenue, one-third of purchase and use tax revenue, one-quarter of rooms and meals tax revenue, 100% of the new short-term rental surcharge, as well as lottery funds and general fund transfers. Despite these escalating costs, Vermont serves only 80,300 students across an “out of scale” education system with high administrative overhead and small class sizes.

Scott pledged to introduce a multi-year plan to overhaul the system focusing on a student-centered funding formula and a more efficient governance structure. This proposal includes streamlining administrative costs, rethinking local school board responsibilities, and implementing guardrails to ensure fiscal discipline. By addressing these systemic inefficiencies, the Governor aims to contain costs while improving outcomes—both of which are essential to Vermont’s economic future.
This approach complements the Vermont Chamber’s advocacy for critical cost-saving reforms that prioritize addressing root issues over simply increasing funding.

Moving Forward Together
Governor Scott’s speech reflected a shared vision with the Vermont Chamber: focusing on practical, long-term solutions to Vermont’s most significant challenges. From housing to affordability to workforce development, his priorities align with the Chamber’s commitment to advancing Vermont’s economy.

As the legislative session progresses, the Vermont Chamber will collaborate with lawmakers, the administration, and other stakeholders to achieve shared goals. The Governor, Speaker, and Pro Tem have all emphasized the importance of setting priorities, maintaining focus, and taking a collaborative approach. The Vermont Chamber will look for this commitment every day throughout the session, and expect all leadership to continue driving progress, delivering outcomes, and advocating for policies that support Vermont’s businesses and communities.