MONTPELIER, VT - The widening gap between wages and home prices threatens to displace working Vermonters and stunt the economy at large, according to affordable housing advocates. The cost of housing in Vermont continues to rise, despite a drastic decline in home values nationally, according to a report released Tuesday. Vermont's immunity to the nationwide downturn, experts said, evinces an intensifying housing shortage that has rendered many low- and middle-income Vermonters unable to afford homes or even apartments. "We have direct evidence that Vermont's economy is suffering because we don't have adequate housing around the state," Sen. Vincent Illuzzi, R-Essex-Orleans, said Tuesday. "The tendency is to look at housing and economic development as two separate issues. In reality, they are one."
The Vermont Housing Finance Agency, which finances affordable housing statewide, issued its annual statistical analysis comparing home values and wages in the state. The median cost of a home in Vermont has more than doubled since 1996. In 2007, the VHFA reports, the median Vermont home cost $201,000, up 2 percent from the previous year. Vermonters' salaries have not kept pace with rising home prices. An average Vermonter needs to make $65,000 a year to afford the average Vermont home. But the household income in two-thirds of Vermont families falls below that mark.
Exponential growth in home prices seems to have leveled in the past year. Even so, according to a VHFA spokesman, ordinary Vermonters still can't afford ordinary homes. "When a household earning more than $50,000 a year cannot afford the median-priced home, we still have a big problem," said John Fairbanks, public affairs manager for VHFA.
Prospects for working-class Vermonters may only worsen in coming years. According to the Vermont Department of Labor, seven of the 10 fastest-growing occupations in Vermont pay an average wage of less than $10 an hour. But that doesn't come close to what a renter needs to afford a median-priced two-bedroom apartment. At $836 a month for the median apartment, according to the VHFA, a renter needs to make at least $16.07 per hour. Cashiers, the fastest-growing segment of Vermont's workforce, make an average of $9.13 per hour. Waiters and waitresses, who make up the third-fastest growing job sector, earn an average of $9.83 per hour. "We have an economy whose primary job growth is mainly in the lower-paid service sector," Fairbanks said. "And it's a huge challenge to figure out a way to make sure they have a safe, decent, affordable place to live."
The VHFA draws connections between Vermont's disproportionately high rate of homelessness and its high housing costs. Vermont, which has more homeless people per capita than any New England state, has seen an increasing reliance on shelters. In 2000, the average stay at a homeless shelter was 11 days. In 2007, it was 33 days, according to VHFA. "People are paying ever-higher percentages of their incomes on housing costs," said Erhard Mahnke, coordinator of the Vermont Affordable Housing Coalition. "They can easily end up in a downward spiral that results in homelessness."
Officials cite a variety of factors for Vermont's housing shortage. Sarah Carpenter, executive director of the VHFA, attributed Vermonters' general aversion to new development for stymieing worthwhile housing proposals. Not-in-my-backyard activism, she said, has made it difficult for developers to construct high-density projects even in suitable places.
Mahnke said cuts in federal appropriations have compounded the housing shortage. The U.S. Department of Housing and Urban Development, according to Mahnke, has cut housing assistance funds by two-thirds over the past three decades. "The federal government basically got out of the busine
Source: Rutland Herald