Introduced by Committee on Economic Development, Housing and General Affairs
Subject: Housing; state land; land bank; housing development
Statement of purpose: This bill proposes to:
(1) Create a Vermont land bank program to make land available for construction of new affordable and moderately priced residential housing.
(2) Implement a land bank program to help meet the pressing need for more housing, both affordable and moderately priced; support economic development by increasing housing for Vermont’s workforce; and strengthen the social and economic vitality of Vermont’s communities.
AN ACT RELATING TO CREATION OF THE VERMONT LAND BANK PROGRAM
It is hereby enacted by the General Assembly of the State of Vermont:
Sec. 1. 10 V.S.A. chapter 18A is added to read:
Chapter 18A. VERMONT LAND BANK PROGRAM
§ 401. POLICY AND PURPOSE
(a) In an attempt to meet better the state’s housing needs with a thoughtful, planned approach, the purpose of this chapter is to promote new housing development.
(b) A substantial increase in affordable and moderately priced housing is needed.
(c) Creating more affordable housing and housing units for Vermont’s workforce will also stimulate economic development and strengthen the social and economic vitality of Vermont’s communities.
(d) Creation of a state-supported land bank program that includes inventoried land and other buildings or parcels owned by the state, offered by municipalities, and donated by private owners, that is not in use or designated for use and is determined to be appropriate for housing development would help to provide land at lower cost for appropriate housing development. The agency of commerce and community development will provide guidance and support to municipalities that undertake housing development in their communities.
(e) Making land in the land bank available at nominal cost for housing development will help to fulfill the objectives of this chapter.
§ 402. DEFINITIONS
As used in this chapter:
(1) “Agency” means the agency of commerce and community development.
(2) “Committee” means the joint committee on tax credits defined in 32 V.S.A. § 5930u(a)(4).
(3) “Perpetually affordable housing” means housing subject to housing subsidy covenants as defined in 27 V.S.A. § 610 that preserve affordability for a period of 99 years or longer.
(4) “Secretary” means the secretary of the agency of commerce and community development.
(5) “VHFA” means the Vermont housing finance agency.
§ 403. VERMONT LAND BANK PROGRAM
(a) The Vermont land bank program is established in the agency and administered by VHFA for the purpose of making land available for the development of affordable and moderately priced housing.
(b) The secretary, to advance the purposes of this chapter, shall:
(1) Undertake and coordinate an inventory of land owned by the state, offered by a municipality, or donated by a private owner that is unused and for which no future use is planned. The secretary shall analyze the available land to determine its appropriateness for housing development pursuant to criteria determined by the committee. Appropriateness for housing development shall be determined by location within or adjacent to existing downtowns, village centers, and growth centers; the availability of and access to existing or planned public services, including sewage treatment, water supply, and public transportation; and consistency with municipal and regional plans, municipal zoning ordinances, chapter 151 of this title, and any other state regulatory requirements. State land proposed for inclusion in the land bank program shall be included only after the secretary obtains the consent of the owner and an authorization from the general assembly. The secretary may solicit proposals from housing developers through an open and competitive bidding process.
(2) Prepare and maintain a database or list of properties that are eligible to participate in the land bank program.
(3) Consult with public officials of municipalities in which eligible parcels are located to determine whether the municipality supports the development of housing in these locations, and provide support to municipalities that wish to provide input into proposals from housing developers.
(4) Effect the transfer of land in the land bank program to for‑profit and not‑for‑profit housing developers for creation of new housing consistent with the objectives of this chapter and the recommendations of the committee.
(c) The committee shall adopt a plan, establish criteria for evaluating the appropriateness of parcels for development and procedures for soliciting and evaluating proposals from for-profit and not-for-profit housing developers that wish to acquire land from the land bank for the construction of affordable and moderately priced housing, and decide among the proposals the most appropriate housing development project on a land bank parcel. The criteria and procedures shall include the following:
(1) Guidelines related to the affordability and income eligibility in accordance with the standards and criteria of VHFA established in chapter 25 of this title.
(2) Options for maintaining or recapturing the state’s capital investment in all units that do not have perpetual affordability requirements. This shall include the option of non-amortizing interest‑bearing second mortgages held by VHFA.
(3) Priority for meeting local housing needs while allowing for the development of mixed-income housing projects.
(4) Procedures for publication of requests for proposals.
(5) Procedures for contracting for the sale or transfer of land bank parcels upon the receipt of all local and state development permits and necessary financing.
(6) Priority shall be given to proposed developments that produce the greatest number of units that will serve Vermonters at or below 100 percent of area median income in the case of homeownership housing, and that provide for the longest term affordability with consideration, among other approaches, given to homeownership proposals that maintain perpetual affordability through the use of the community land trust shared appreciation resale formula and ground lease. In the case of rental housing, priority shall be given to units affordable to Vermonters at or below 60 percent of the area median income.
(d) Not all home buyers shall be required to meet the income eligibility guidelines in order to purchase a home through the land bank program, provided no more than 20 percent of the units in land bank developments exceed the VHFA eligibility guidelines. Home buyers not meeting the income eligibility guidelines at the time of purchase shall pay VHFA the actual fair market value of the land on which the home is situated.
(e) For homeownership units that do not have perpetual affordability requirements, home buyers may elect to pay off the balance of the second mortgage at any time or transfer it to the next buyer of the home, provided that the home is sold at a price considered affordable under VHFA guidelines, and that the buyer is income eligible under VHFA guidelines. If the selling price of the home exceeds the amount considered affordable by VHFA or the income of the buyer exceeds those guidelines, the seller shall pay off the balance of the second mortgage.
(f) For rental units that do have perpetual affordability requirements, a housing developer shall convey a deferred second mortgage to VHFA when the developer under a written agreement commits to lease housing units at a rental price determined to be affordable under VHFA guidelines and for a period of time set forth in the criteria established by the committee but not less than 15 years. In the event that the rental cost of one or more units exceeds the affordability guidelines, the amount of the second mortgage shall become due and payable to VHFA.
(g) At the time of initial development or at the time of sale of a development, the housing developer may propose that repayments due from income‑ineligible homeowners or units that exceed the affordability guidelines may remain in the development as further subsidy for affordable housing units.
(h) The principal and interest of a second mortgage or land sales paid to VHFA as part of the land bank program shall be transferred annually to the Vermont housing conservation board established in chapter 15 of this title for the exclusive purpose of supporting the development of new housing consistent with the objectives of that chapter.
(i) Land eligible for the Vermont land bank program shall include any of the following:
(1) Any state land inventoried and placed on the list or database pursuant to subdivisions (b)(1) and (2) of this section.
(2) Any land under private or municipal ownership made available for a municipality to enroll in the land bank program for the purpose of developing new housing.
(3) Land donated to the department of buildings and general services and determined by the secretary to meet the criteria developed by the committee for participation in the land bank program.
(j) VHFA shall establish and maintain a Vermont land bank fund for any funds received pursuant to the land bank program created under this chapter. VHFA may also charge reasonable fees for the administration of the program.
Sec. 2. REPORT
The secretary of commerce and community development in cooperation with the committee shall report to the house committee on general, housing and military affairs and the senate committee on economic development, housing and general affairs no later than January 15, 2007, regarding the progress of state entities in completing the inventory of state land and a list of potential land inventoried that may be appropriate for housing development, including its location, the criteria and procedures adopted by the committee, including criteria establishing how much housing developers shall be required to pay for the acquisition of land in the land bank in order to fulfill the objectives of this chapter, and any further recommendation to advance and improve the land bank program.
The Vermont General Assembly
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