Downstreet Working On New Affordable Rental Housing Projects

The housing crunch has made affordable housing a hot topic for renters, buyers, and public officials, and when the subject comes up, Downstreet Housing and Community Development is the local organization that almost everyone hopes can help. 

The Barre-based housing nonprofit runs a number of programs to help low-income renters and home buyers in central Vermont, including informational programs, a shared-equity home ownership program, and a program renting out 85 mobile home lots. But Downstreet’s largest program involves building, owning, and managing rental apartments primarily for those with 60% or less of area median income.

Downstreet owns 448 apartments in Washington and Orange counties, 189 of them in Montpelier, over three times the number in the next highest community, Barre — although there are reasons for that. More Montpelier units are under discussion, but three upcoming Downstreet projects will be located in nearby central Vermont communities.

New Housing in the Pipeline

Downstreet plans for a 30-unit project near the Berlin Mall that should break ground this spring, a 27-unit project in Barre involving preservation of 18 units and the creation of nine new ones to break ground this summer, and a 24- to 26-unit project in downtown Waterbury, for which Downstreet plans to apply for funding in early 2023.

Downstreet is always looking ahead, according to its executive director Angie Harbin. “The challenge with housing is it takes two to three years after we start before people can begin moving in,” she said. “You have to keep projects in the pipeline.” Every year, Downstreet explores 10 to 20 new housing projects, but only moves forward with one to three.

Among possible future Montpelier projects are a 26- to 28-unit, five-story affordable apartment building on property behind the Christ Episcopal Church on State Street, and a 20-plus unit project that would involve rehabbing a building that currently does not have housing. Downstreet is also buying a small apartment building in Montpelier, and plans to talk with local officials about housing at the Country Club Road site (a.k.a., the Elks Club) after the city finishes its master plan for the property this summer, according to Harbin.

Steve Dale, chair of the Housing Committee for Christ Church (which would donate land for the project where its parish hall sits today) said the idea of creating affordable housing with Downstreet has been under discussion since 2015, but has faced a series of challenges, most recently high construction costs. A decision on whether the project will go forward should be made by this spring, he said.

Demand for Housing

Demand for affordable housing has never been higher, according to Vermont housing advocates. During the pandemic, the rental market was made tighter and rents were pushed higher as more people moved to the state, a phenomenon that also sharply inflated real estate prices.

The migration pressures may be easing. According to U.S. Census figures, the net migration into Vermont in the 15 months from April 1, 2020 to July 1, 2022 totaled 5,188 people, but in the 12 months that ended July 1, 2022, net migration was 2,253. Meanwhile, even with the in-migration, the state’s population was virtually flat that same year compared to a year earlier, because of more deaths than births.

Nevertheless, even as the economy softens and rents are dropping a bit in some Sunbelt cities, workers here are still having a hard time finding housing, and the number of homeless individuals in the state is rising. Housing advocates say the state needs to build 10,000 new housing units in the next five years, half of them affordable. 

In mid-December, a group of 12 housing organizations urged the legislature to dedicate $175 million to new housing this year. That would be a huge increase from past state funding, but advocates say the need is there, especially as federal pandemic funds dry up.

Downstreet gets a good portion of its funding from the Vermont Housing and Conservation Board, which was given more than 50% of the half billion dollars in federal pandemic housing aid the state received, according to Vermont Housing Commissioner Josh Hanford. The board is expected to have allocated all that pandemic money by the end of June, he said, underlining the need for more state funding.

“We need something for the unhoused, we need more affordable rentals, and we need more modest middle-income housing development,” he said. Hanford praised Downstreet’s efforts. “They are always a great partner, taking on tough new projects,” he said.

Costs Up; Staffing Down

Even with funding, building more affordable housing is not easy these days. According to Harbin, the challenges Downstreet has faced in recent years include filling its own staff positions, unpredictable availability and costs of building supplies, higher interest rates, a 10% lower price for low-income housing tax credits, and a shortage of construction companies and workers.

When building the recently opened Foundation House in Barre, a residence for women in recovery from substance use disorder and their children, Downstreet found costs skyrocketed, local fundraising was needed to fill the gap, and the opening of the facility was delayed while Downstreet scrambled to find painters, Harbin said.

Downstreet Goes Way Back

Downstreet, organized in 1985, was originally known as the Central Vermont Community Land Trust (CVLCT). In 1984, it merged with Barre Neighborhood Housing Services, and in 2015 the merged organization was rebranded as Downstreet Housing and Community Development. Today, the organization is fully staffed with 34 full-time employees, but building more projects means finding more staff, including maintenance workers.

Downstreet serves Lamoille, Orange, and Washington counties, although it does not have any rentals in Lamoille County, as affordable rentals there are handled by a different nonprofit. In addition to its significant work developing and operating affordable rentals projects, Downstreet operates a “NeighborWorks HomeOwnership Center” to help homebuyers.

This center provides financial counseling, home-buyer education, and home repair loans. Downstreet also operates a shared-equity down-payment assistance program that provides grants to homebuyers at or below 120% of the area median income. In exchange for the grant, the purchasers agree to limit the amount of market appreciation taken at the time of a sale of the homes, which Downstreet resells to new buyers with the same restriction. Downstreet has 159 homes in its shared-equity portfolio but is only able to add a handful of new houses to the program each year.

The Downstreet/Montpelier Partnership

Montpelier has been a focus of Downstreet activity over the years, and the city now accounts for a third of Downstreet rentals in Washington and Orange counties. Downstreet also has its greatest number of shared-equity homes in Montpelier — 40 out of 159.

“Montpelier is one of our best housing partners,” Harbin said. “They have been fantastic.” She also noted that Downstreet wants to develop where there are services as well as water and sewer, and Montpelier meets those criteria. “Montpelier is also affluent and can afford to do more” than other municipalities, she suggested.

Although Downstreet projects pay property taxes on their units, it is usually at a discount, meaning they pay 80% to 85% of the taxes that would be due if the building was a privately owned, market-rate apartment. That reduction in revenue may be an issue for some other communities, she said.

At the same time, Downstreet recognizes it serves a broad area, Harbin said, and its next three projects will not be located in Montpelier. Moreover, two of its most recent projects were in Barre (Foundation House, and two tiny homes), and, Harbin noted, Berlin is interested in getting another affordable rental project built, in addition to the one on which construction will begin this spring.

Montpelier Planning Director Mike Miller confirmed that “more housing is certainly one of the city council’s identified strategic goals,” and one his department is working on. The last year that a significant number of new units were given permits in Montpelier was 2017, when 66 permits were issued, including some for two Downstreet projects — the Transit Center and the French Block.

Since then, Miller said 31 housing unit permits were issued in 2018; 16 in 2019; five in 2020; and 16 in 2021. In 2022, the Planning Department issued 11 housing permits, two for new single-family homes and nine for new rental units.

Miller, who worked in Barre before coming to Montpelier in 2014, identified two additional reasons that may explain why Montpelier has more Downstreet units than communities like Barre. 

“The Barre Housing Authority has four really big projects, so Barre City has the majority of subsidized units in the county,” he said. “The Montpelier Housing Authority has subsidized units, but not to the same extent.” In addition, rents are lower in Barre than Montpelier, so there is more market-rate affordable housing in Barre compared to Montpelier, he said.

While it primarily targets low-income renters, Downstreet tries to include a diversity of income levels in its buildings, with some units referred to as “market rate.” But as Harbin explained: “We use the term market rate very loosely. It generally applies to units that don’t have a funder-restricted rent or associated household income or to units if the funder-restriction is over 80% of area median income. Either way, these units tend to have much lower rents than what would be considered ‘market.’”

After a period of leadership turnover at Downstreet, Harbin began work there in late May after spending 15 years working in affordable housing development in the Rochester, NY area. Downstreet Board president Kevin Ellis is pleased with Harbin’s hire and the fact the organization recently was able to become fully staffed again. “We’ve hit our stride,” he said. “We’re going gangbusters.”

For her part, Harbin said she is happy to be in Vermont and running Downstreet. “I like the way Vermont is working to increase housing,” she said. “And the people here at Downstreet are committed, enthusiastic people.”

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How To Apply For A Downstreet Apartment

Downstreet recently changed its application process. Previously, interested applicants would complete a lengthy application to be placed on a waiting list. It could take upwards of five years to rise to the top of the list, and because all applications were required to be processed in the order in which they were received, the process was inefficient for applicants and for Downstreet staff. 

Today, instead of managing long waitlists, Downstreet maintains a vacancy notification list for the majority of its 448 units, including many in Montpelier and Barre. When a unit becomes available, Downstreet contacts everyone on the list so those interested in the specific vacancy can apply. Applications are still processed on a first-come, first-served basis, but those on the vacancy notification list have a three-day head start to apply before the apartments are advertised publicly. Anyone can sign up for the vacancy notification list at downstreet.org/apartments.

Downstreet continues to maintain short waitlists for each of its subsidized properties, which include some apartments in Barre, Bradford, Montpelier, and Waitsfield. The same web page has a link to information about how to get on these lists.

Another small group of Downstreet apartments in Bradford, Cabot, Waitsfield, and Waterbury require housing vouchers. To apply for these, renters must apply directly with the Vermont State Housing Authority. After processing, the Housing Authority refers applicants to Downstreet.

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Downstreet Apartment By Municipality

Downstreet owns or manages 448 affordable rental apartments in Washington and Orange counties, with more on the way. Below is the current number by municipality.

• 189 Montpelier
• 55 Barre
• 50 Bradford
• 42 Waitsfield
• 41 Waterbury
• 29 Wells River
• 18 Warren
• 15 Waterbury Center
• 8 Cabot