Rutland ramps up incentives, cuts red tape, in push for 1,000 new housing units by 2028 – VTDigger

Over a year ago, Rutland City Mayor Mike Doenges announced the goal of creating 1,000 new housing units by 2028. The mayor recognized that, on paper, the roughly 60 new units in development this past year is a far cry from being on track towards his admittedly “lofty” target. But Doenges said he anticipated a slow start and much of the work in year one has been to address bureaucratic roadblocks to get the momentum rolling. 

“I think it’s going better than I could have hoped,” Doenges recently said of his housing plan. “I don’t think we’ve seen that kind of burst of development in a very long time in our city so I take that as a very, very positive sign that we’re heading in the right direction.”

One of Doenges’ main affordable housing partners, the Housing Trust of Rutland County, has two projects in the works in Rutland City: 22 new units at the East Creek Commons on Columbian Avenue and 30 new units on Forest Street. It is also working on a 24-unit housing project in West Rutland.

Devon Neary, executive director of the Rutland Regional Planning Commission, sees affordable housing projects as a vital part of the solution to Rutland’s housing crisis. 

“When we really look at housing development, it needs to be along a spectrum,” said Neary. “We need to make sure that we are retaining the population that we have and providing housing for everyone within their affordable range.”

The region’s home sales and rental costs rose at a steep rate in the past few years and people living in Rutland have felt this impact in their wallets, he said. The average one-bedroom rental cost in Rutland County jumped from $780 in 2019 to $911 in 2023, and the median home sale increased from $150,000 in 2018 to $229,000 in 2022, based on a housing needs assessment by Vermont Housing Finance Agency conducted last year. 

This has left about half of the renter households in Rutland County cost-burdened, according to federal standards — a quarter of renters paid between 30% to 50% of their income on rent and 24% paid more than half their monthly earnings on rent in 2021. 

Mary Cohen, executive director of the housing trust, said that while the trust is doing its best to contribute affordable housing, its capacity as a public developer is not enough to fill the need for varied types of housing in the city. Rutland’s rents are not high enough to attract private developers who need assurance of a return on investment for housing projects, she said.

“It can’t just be the affordable housing organizations that are doing this. It’s a lot of private developers that need to step to the plate as well,” Cohen said.

Recognizing that Rutland’s affordable housing organizations are already “neck-deep” in projects, Doenges has looked for ways to encourage more market-rate housing development and bring in private developers. 

The mayor said that he sees his role as two-fold: to encourage and welcome new residents, and to “get out of the way” of developers by helping to remove costs and zoning barriers that slow down projects.

Doenges worked with the Rutland Heritage Family Credit Union to spearhead a program called Roofs Over Rutland, which received $8 million last month to provide low-interest-rate loans to developers. 

Of that funding, which came from the state treasurer’s “10% in Vermont” local investment program, $5 million will be designated for projects of five or more units. The other $3 million will go towards smaller-scale projects. There have been more than a dozen housing development loan requests since Roofs Over Rutland’s roll out, according to Doenges. 

“That’s very encouraging, because it does prove the fact that there have been developers waiting in the wings for interest rates to come down, to reinvest and bring units online,” he said.

Other steps include reducing prohibitive permitting fees and wastewater water allocation permits, which have been lowered from $4 per gallon to 25 cents per gallon for residential developments, Doenges said.

Due to modernized zoning and existing development in the area, Neary said Rutland is also positioned to take full advantage of the recent loosening of Act 250 regulations through Act 181, passed by the Legislature in June. Doenges, Neary and Cohen all agreed this legislative change will cut costs and speed up operations for developers. 

The Rutland Regional Planning Commission has also recently released a housing guide for developers, which Neary said has helped bring clarity to the housing production process.

“We’ve heard from several developers that that guidance document has been monumental in removing some of the barriers, especially information barriers for accessing public money and incentives for housing development and really bringing resources directly to those developers fingertips,” said Neary. 

The Board of Aldermen is also considering an ordinance to place limits on short-term rentals. Michael Talbott, the board’s president, said this would hopefully have the trickle-down effect of making more housing available in Rutland. Other municipalities in Vermont that have regulated short-term rentals include Burlington, Stowe, Killington, Woodstock, Londonderry, Tunbridge and Plymouth.

Talbott said that he recognizes a need to be more thoughtful about reining in the unfettered short-term rental market and protecting renters in Rutland. 

“We have people who tell us their landlord evicted them, turned their long-term apartment that they liked and always paid for into an Airbnb,” said Talbott. “Obviously, we need short-term rentals in Rutland, but how many do we need and where do we need them? Because we know we also need long-term rentals in a really significant way.” 

Neary said despite the “slow roll,” the lessening of regulatory barriers in concert with programs like Roofs Over Rutland mark significant headway towards tackling the region’s housing woes. The city’s success, Neary continued, will be key to addressing the housing shortage in the county as a whole, which is estimated to need around 7,000 additional housing units for renters and homeowners by 2040, according to the housing finance agency study. 

“Housing doesn’t just pop up out of nowhere. I think what is most critical is that the city of Rutland is really laying the foundation for significant housing growth,” said Neary.