An issue I see is the cost of all the consultants needed in order to satisfy the various requirements that come with using Federal and State money for affordable
housing development. It has, at times, seemed excessive.
Jeanne L. Montross, M.S.
Executive Director
802-388-3608 x 239
282 Boardman Street, Suite 1A
Middlebury, Vermont 05753
From: vtdevelopment@simplelists.com [mailto:vtdevelopment@simplelists.com]
On Behalf Of Mark Thibeault
Sent: Friday, September 27, 2019 4:46 AM
To: Jeremy Matosky, P.E.; Kemener Whalen; Johnny G. Illick
Cc: David White; Michael Kirick; Seth Leonard; vtdevelopment
Subject: RE: [VT Dev] Vermont Affordable Rental Housing Cost Study: last call for data!
Act 250, local zoning, impact fees, etc were put into place for a reason. However, those issues have changed. It’s time for a new better system.
Also, the cost additional staff (etc) to review the color of each door, is passed on with higher taxes for all!
Mark R Thibeault
CRE Source, LLC
P.O.Box 161
1705 Peach Brook Road
Newbury, VT 05051
(802) 363-8835 - Mobile
From: vtdevelopment@simplelists.com <vtdevelopment@simplelists.com>
On Behalf Of Jeremy Matosky, P.E.
Sent: Wednesday, September 25, 2019 4:58 PM
To: Kemener Whalen <kem@blackrockus.com>; Johnny G. Illick <JGIllick@rearchcompany.com>
Cc: David White <dwhite@whiteandburke.com>; Michael Kirick <michael@kirick.com>; Seth Leonard <SLeonard@vhfa.org>; vtdevelopment <vtdevelopment@simplelists.com>
Subject: RE: [VT Dev] Vermont Affordable Rental Housing Cost Study: last call for data!
I represent a variety of small and large developers as well as individual homeowners and businesses throughout Vermont. I try to stay neutral on most
issues but this one affects me personally, my businesses, my children, and my 20+ employees many of whom are young professionals trying to make a living in Vermont.
I 100% agree with Johnny and Kemener, the various fees paid to Town and State throughout the development process can be substantial. Anyone who runs
a business knows that overhead costs are simply passed on to the end users eventually, and competition determines what level of profit can be obtained, if any.
Essentially these fees are a “tax” that the end users often don’t see or don’t realize where it comes from. If the those same costs were collected through
taxes (of whatever variety) there would be an uprising.
As an engineer I like to solve problems, but this one is a challenge for all of us. I look forward to a better system in Vermont where the economic demands
and need for housing and jobs are spread out a bit more equitably for the benefit of all who live and enjoy this beautiful state.
Jeremy M. Matosky, P.E.
President, Principal Engineer
Trudell Consulting Engineers
p. 802.879.6331 x102
d. 802.316.5076
c. 802.734.9629
Your visions brought to life -
www.tce3d.com
478 Blair Park Road, Williston, VT 05495
42 Mapleville Depot, St. Albans, VT 05478
From:
vtdevelopment@simplelists.com [mailto:vtdevelopment@simplelists.com]
On Behalf Of Kemener Whalen
Sent: Wednesday, September 25, 2019 4:31 PM
To: Johnny G. Illick
Cc: David White; Michael Kirick; Seth Leonard; vtdevelopment
Subject: Re: [VT Dev] Vermont Affordable Rental Housing Cost Study: last call for data!
100% agreed with Mr. Illick.. What the state and municipalities fail to recognize (or accept perhaps) is that developers are not paying the permitting/impact fees, they are a conduit of the fees to the public. While anecdotal I think
this little story is representative:
I went to selectboard meeting in a town in chittenden county. The public works director in the town was discussing water upgrades needed associated with potential zoning changes. The discussion focused on pressure and cost. When asked
the public works person stated that given the current infrastructure if heights were increased there would not be sufficient water pressure to serve the increased heights. The public works person indicated that the cost to get sufficient pressure would be
substantial for the municipality. The selectboard response "make the developer pay for it".
This little anecdote highlights the fundamental lack of recognition that the consumer is ultimately who is footing that bill. Developers don't pay for anything, rather developers "float" the cost until it can be recouped from the consumer.
Developers are a conduit for the cost of permitting/entitlement to the consumer. Developers are a pass through to the consumer. Until the state/municipalities recognize that fundamental fact, there will be little headway in making housing more affordable
(for consumers/citizens) in Vermont.
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On Wed, Sep 25, 2019 at 4:04 PM Johnny G. Illick <JGIllick@rearchcompany.com> wrote:
All,
ReArch Company does work for both housing authorities and for our own development projects and I can tell you that construction costs are the exact same. I agree with Kemener in that it is the current market conditions that are driving construction costs up but the costs are the same for everyone.
I also think everyone is missing the point as the real issue is the extremely high impact and permitting fees. When you factor in the cost of all of the permitting, entitlement, ACT 250, wetland studies, etc., etc., etc., it drives up the project cost. The developer merely passes those costs on to the renter in the form of higher rent when most people think it’s the greedy developer trying to line their pockets. We as a state have to scale our impact fees back dramatically if we want affordable anything. Lowering fees will in fact affect us short term, but we need to be thinking more long term as it will pay huge dividends down the road by increasing our tax base, have a real supply of workforce housing, help attract and retain the thousands of people leaving our state, etc., etc., etc. The only way to develop affordable housing is with huge subsidies and even that is getting hard.
Until we can change the attitudes at the State and City levels, nothing is going to change and we will continue to struggle building affordable/workforce housing.
Current Impact fees in Vermont = “Unaffordable Housing” Not the cost of construction.
follow us!
Johnny Illick
Vice President of DevelopmentJgillick@ReArchCompany.com
O: 802.863.8727 Ext.215
C: 802.318.3169
88 Technology Park Way, Suite 2
S. Burlington, VT 05403
www.RearchCompany.com
From: vtdevelopment@simplelists.com <vtdevelopment@simplelists.com> On Behalf Of Kemener Whalen
Sent: Wednesday, September 25, 2019 2:16 PM
To: David White <dwhite@whiteandburke.com>
Cc: Michael Kirick <michael@kirick.com>; Seth Leonard <SLeonard@vhfa.org>; vtdevelopment <vtdevelopment@simplelists.com>
Subject: Re: [VT Dev] Vermont Affordable Rental Housing Cost Study: last call for data!
The cost of construction is rising for everyone. The construction labor shortage is a contributing factor. Material cost increases are a contributing factor. The current tariff environment is a contributing factor. These are issues that apply across all construction. Steel tariffs are applied to all materials, not materials intended for "affordable vs market rate". There are likely increased legal costs for "affordable housing groups", as generally their projects are reliant on tax credits, grants, etc - which will result in increased billable hours from lawyers/CPAs and may include fees associated with securing the funding. However, the (land use) regulatory environment doesn't selectively apply fees for affordable vs market rate (and affordable generally offers some additional benefit - increased density, etc). If the costs are being perceived as higher by the affordable housing groups, perhaps its a reflection of the increasing cost of construction coupled with a very expensive and time consuming permitting process, without recognition that for-profit developers are experiencing the same cost related burdens. Perhaps the development community (for profit and non-profit) should work together to advance a unified message of regulatory cost and the impact on the cost of housing overall. Vermont may indeed need more affordable housing (regulated), but more importantly it needs housing that is affordable (market rate).
Kemener Whalen
Chief Financial Officer
BlackRock Construction
p:
f:
a:
w:
On Wed, Sep 25, 2019 at 1:45 PM David White <dwhite@whiteandburke.com> wrote:
Michael,
There have been some suggestions over the years that non-profit affordable housing organizations have been paying more than for-profit developers for their projects. Although I am not involved in this study, my understanding is that one of its objectives is to evaluate that issue. If affordable housing developers have been paying more than necessary, what can be done to bring their costs into line and thus reduce the amount of public subsidy? Let’s use public funds more wisely.
I hope that helps.
David
White + Burke Real Estate AdvisorsFounded 1990
David G. White, MS CED, EDFP, CCIM, CRRP, CRE
President
PO Box 1007
40 College Street, Suite 100
Burlington, VT 05402-1007
P: 802-862-1225 x13
F: 802-862-3601
www.whiteandburke.com
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From: vtdevelopment@simplelists.com <vtdevelopment@simplelists.com> On Behalf Of Michael Kirick
Sent: Wednesday, September 25, 2019 12:31 PM
To: Seth Leonard <SLeonard@vhfa.org>
Cc: vtdevelopment <vtdevelopment@simplelists.com>
Subject: Re: [VT Dev] Vermont Affordable Rental Housing Cost Study: last call for data!
Excuse me for being an idiot, but by definition, if "affordable" construction costs more, then doesn't that make it less affordable? Help me here on what the question is. What is being defined as affordable vs market?
Michael
From: "Seth Leonard" <SLeonard@vhfa.org>
To: "vtdevelopment" <vtdevelopment@simplelists.com>
Sent: Wednesday, September 25, 2019 9:48:21 AM
Subject: [VT Dev] Vermont Affordable Rental Housing Cost Study: last call for data!
Good Morning,
Earlier this year, VHFA, VHCB and DHCD initiated a study of affordable rental housing development cost factors in Vermont. We are trying to answer a couple questions: is affordable rental housing more expensive to build than market-rate rentals, and if so, why and what can be done about it? Also, can we better understand the relation between public policy goals and their impact on the cost of development.
To make this study as valuable to our development community as possible, we need information on the cost of producing market rate rentals. The more data we have around market rate development, the more meaningful the study will be. We hope you will consider providing project-level development cost data for inclusion in a comparative statistical analysis. Even if you only have information for a small component of the development costs (such as engineering, architectural, or construction), this is helpful. As described in the Use of Data Agreement in the documents linked below, all data you provide will be aggregated and anonymized to ensure confidentiality.
We have put out several requests for data over the past few months, and are hoping to have all participants submit their information this week if possible (please contact me if a slightly longer timeline would be helpful).
Participation is very easy and will not take much time out of your day:
- Download a spreadsheet at https://www.neighborhoodfundamentals.com/s/Market-Rate-Development-Data.xlsx and e-mail to Michael A. Spotts at mspotts@neighborhoodfudnamentals.com.
- Complete the survey at https://www.surveymonkey.com/r/VHFAdata.
- Contact the consultant, Michael A. Spotts (mspotts@neighborhoodfundamentals.com), if you prefer to submit project data in another way.
Thanks for participating in this important effort. We will be sharing the results at the White + Burke developers’ conference in November, will blog about, and can share it in other ways when it’s done late this fall.
Thank you very much!
Seth Leonard | Managing Director of Community Development
164 St. Paul St, Burlington, VT 05401 | 802.652.3403
Vermont Housing Finance Agency
vhfa Affordable homes for a sustainable Vermont.
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Michael P. Kirick
Kirick Engineering Associates, P.C.
5399 Williston Road, Suite 103
Williston, VT 05495
(802) 655-5731 ext 3#
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