Want to Support an Equitable, Prosperous Vermont? First You Need Workforce Housing.
By Kelly Klein, founder and CEO of Groennfell Meadery and Havoc Mead
As seen in the Brattleboro Reformer and VTDigger
Some days I feel more like a blend of real estate agent and therapist than CEO and Founder of Vermont Craft Mead.
One of our employees, having sold his out-of-state home more quickly than anticipated, is scrambling to find anything available, much less affordable, here in Vermont. Another has steadily built her credit and savings while working at the meadery; enough, she dreamed, to finally buy her first home – only to watch the market explode, suddenly yanking such an option out of reach. A third member of our team just had his new landlord increase his rent by 44%, making it impossible to stay put, yet he can’t find another affordable place to live.
All this at a company of about 20 people. And these are just my most recent stories.
I am not alone in trying to help our people navigate these housing hurdles. My peers all share similar challenges with me. The exact details may differ case by case, but the stress and anxiety brought about by Vermont’s housing crisis hold true for all involved.
Housing is undoubtedly one of the biggest issues of concern expressed by Vermont Businesses for Social Responsibility (VBSR) members like me – in fact, this crisis was voted the top barrier to success for businesses in the latest VBSR membership survey.
Vermont’s citizens, lawmakers, and advocates alike are working tirelessly to respond to our state’s workforce shortage and create more just, equitable communities, but for Vermont employers, the housing shortage is keeping them from attracting and retaining new workers – right now. But just as this challenge did not arrive overnight, it will not be solved overnight.
So, what recent forces got us here – and where do things stand exactly?
Even in the years preceding the pandemic, the average Vermont household’s buying power was no better than it was before the recession over 10 years ago. More recent, post-pandemic data paints an even starker picture especially for the over 75,000 Vermont households who rent their homes.
According to Out of Reach 2021, the National Low Income Housing Coalition’s annual report documenting the significant gap between renters’ wages and the cost of rental housing across the United States, the average Vermonter needs to earn nearly $24 per hour to afford a safe, decent place to live in Vermont. The challenge? An average Vermont renter makes less than $14 per hour – making ours the sixth-largest affordability gap in the nation. And small businesses often can’t afford to pay workers high enough wages to make up that gap.
If you’re a working Vermonter looking to stop renting and start owning, you face similar challenges. While Vermont’s housing market should be able to provide quality homes for middle income workers, we have seen an unprecedented spike in housing costs – one that has created a value gap that is insurmountable for most working Vermonters.
Vermont homes have appreciated 37% over the last three years. Meanwhile, our developers are struggling with increasingly high material costs and labor shortages, forcing builders to sell homes well above their appraised value to cover these growing construction costs.
So how can we tackle Vermont’s housing and workforce woes at this moment?
Some argue employers must increase their pay to reflect Vermont’s new cost of living, and while VBSR members like me have long supported “livable jobs” – a vision for economic growth centered on the creation of jobs with good wages and benefits – justly compensating workers is only part of the solution.
Vermont employers are using every tool in the toolbox to help their employees solve their housing issues. But based on discussions I’ve had with peers and conversations VBSR has had with members and partners, we need to see something we have not seen to date: historic state and federal investment to turn the tide.
Thankfully, there are some promising programs up for consideration this legislative session as part of the Senate’s housing omnibus, S. 226, that are designed to help to bridge Vermont’s affordability gap, build our workforce, and create a more equitable economy that not only bolsters the current livelihoods of employees, but puts a down payment on their future economic mobility. And the community impact? Investments in middle income housing initiatives yield strong economic returns via tax revenue and consumer spending.
The Commercial Property Conversion Incentive Program would tap into Vermont’s existing building stock and create near term opportunities to build new housing quickly and efficiently. VBSR has had conversations with multiple local manufacturers who have excess space in their facilities. They have explored converting these spaces into much needed workforce housing but were largely deterred by the upfront costs.
We’ve seen this creative approach play out in neighboring states, primarily resulting in the construction of market-rate housing, not affordable housing. In other words, conversions to affordable units are not an appealing option from an economic standpoint unless there is some form of government assistance involved. By providing grants to Vermont employers, we can make good use of otherwise vacant commercial spaces while ensuring long term affordability for tenants.
Don’t have a commercial space to convert? Not to worry. Legislators are also looking to launch a new Large Employer Housing Partnership Program that would provide employers with matching grants to provide housing for their employees. Many of my fellow VBSR members are already moving in this direction.
Some have adopted income advance programs to help their employees deal with unexpected expenses – including the cost of finding and securing new housing. Others have gone so far as to purchase workforce housing for their employees either individually or in partnership with other local employers.
However, like any developer or prospective homeowner, they face significant hurdles in raising the necessary capital to acquire land, secure labor, purchase building materials, and navigate their local permitting processes. These grants would take their work to new heights.
The new Missing Middle Home Ownership Development Pilot Program is yet another historic opportunity to provide moderate income Vermonters with the resources they need to make a home here in Vermont. Access to home ownership represents a significant opportunity to build equity and intergenerational wealth, but for those who make too much to qualify for traditional housing assistance and too little to compete in our current market, affordable listings are scarce and constructing a home is equally as onerous. The Missing Middle program would help to challenge this paradigm by subsidizing the construction of middle-income housing and bridging the otherwise insurmountable value gap.
Like so many Vermont employers, I think of myself as creative, resilient, and ready to keep wearing the multiple hats necessary to help my team stay safe and sheltered. But I cannot do it forever and I cannot do it alone. Ultimately, Vermont can neither tackle our workforce issues nor build a more equitable economy without creating more abundant and accessible housing for our workforce. The programs to do this await decisions by our legislators – let’s pass them and get to work.
Kelly Klein is the founder and CEO of Groennfell Meadery and Havoc Mead, a certified B Corp located in St. Albans, Vermont. Groennfell and Havoc brew craft mead perfect for craft beverage fans: with light carbonation, single-digit alcohol content, and a dry finish, they are smooth and supremely drinkable. Kelly has worked since the company’s founding to use the business as a force for good and sits on the Vermont Climate Council as the representative for the Small Business Community. She is also a member of Vermont Businesses for Social Responsibility who supported the development of this opinion piece.