[Editor’s note: This is a little long, but worth the read. Hold on to your hats.]

How a 24-unit project reveals a statewide crisis in cost, regulation, and taxpayer inefficiency

When Vermonters talk about the housing crisis, the conversation usually begins with a familiar set of ideas: build more units, increase affordability, support nonprofit developers, and protect the most vulnerable. These ideas are sincere. But a close look at one recent “affordable housing” development in West Rutland reveals a deeper structural reality — one that raises fundamental questions about cost, transparency, and how far public dollars actually go toward helping low-income households.

The project in question is the Marble Village Apartments, a newly completed 24-unit building on Main Street. What follows is not an indictment of the nonprofit developer involved. The organization followed the rules set by Vermont and federal agencies. Rather, this is an examination of the system itself — the regulatory framework, the subsidy layers, and the financing model that have collectively created a situation where building modest housing costs as much as urban luxury construction.

Marble Village is not an outlier. It is the template.

A $13.17 million project — and only $7.56 million of it was actual construction

Public documents show that Marble Village’s total development cost was $13,167,031. This is the number used in every press release, grant announcement, and ribbon-cutting speech.

But the project’s own Act 250 submission says something very different about the physical building itself. According to “Schedule A” of the application:

• Total building construction cost: $6,930,625
• Sitework and foundation: $635,000
• Total physical construction: $7,565,625

The building contains 21,400 sq ft across 24 units.

That yields two crucial numbers:

Actual construction cost:

7,565,625÷21,400=≈$354 per sq ft

Real total program cost:

13,167,031÷21,400=≈$615 per sq ft

The public never hears the second number.

At $615 per sq ft, Marble Village matches or exceeds construction prices for elevator-served luxury infill buildings in Boston, Washington, or Chicago. But Marble Village is:

• wood-frame
• three stories
• vinyl/Hardie siding
• standard windows
• economy flooring
• basic cabinets
• no amenities beyond laundry and a community room

Nothing in the physical building explains a $615/sq ft cost.

The explanation lies elsewhere.

To put that number in practical terms, the same $13.17 million could plausibly have produced roughly 80–100 modest modular homes on quarter-acre lots, or around 50 small stick-built ranch houses on quarter-acre lots — instead of 24 apartments in a single building.

While not every project site or community is suited for detached homes, the comparison illustrates how quickly costs escalate under Vermont’s subsidized, multi-agency development system.

Where the other $5.6 million went:

A system built on soft costs, regulatory overhead, and Act 250.

The gap between $7.56M in construction and $13.17M total cost — roughly $5.6 million — is not a mystery inside Vermont’s nonprofit development world. It is the expected outcome of affordable housing financing.

The additional money is consumed by:

• developer fees (allowed up to 12–15% of total cost)
• hundreds of pages of Act 250 filings
• architectural and engineering soft costs
• environmental testing and oversight
• contaminated-soil soft costs
• Vermont’s permit and agency fees
• tax-credit syndicator fees
• financing and legal charges
• accessibility consultants
• archaeological report
• energy modeling and commissioning
• repeated design revisions for state/federal compliance
• multi-year timeline delays
• administrative overhead for every funding layer
• required reserve accounts
• all the labor needed to satisfy a dozen separate grant and loan programs
• over $55,000 in state fees

In other words: the cost is not in the walls, floors, or structural materials.
It is in the system.

Every Vermont project goes through this in some form.
Every time, costs increase.

(AND because the nonprofit’s entire budget comes from taxpayer-funded grants, the $55,000 in fees it paid simply moved taxpayer dollars back to state agencies that are themselves funded by taxpayer dollars — a circular transaction with no private money involved.)

How much of the project was taxpayer-funded?

Essentially all of it.

A detailed reconstruction of the funding stack reveals:

Federal taxpayer funding

• LIHTC tax-credit equity: $7.8M
• National Housing Trust Fund (via VHCB): ≈ $1.0M
• Brownfields remediation grants: ≈ $0.6M

Total federal share: ≈ $9.4M (≈71%)

Vermont state taxpayer funding

• VHCB (state portion): ≈ $2.34M
• ACCD CRRP grant: ≈ $475,000

Total state share: ≈ $2.81M (≈21%)

Ratepayer-backed & quasi-public funding

• VHFA subsidized loan: $750,000
• Efficiency VT / GMP incentives (ratepayer-funded): unknown

Total public/ratepayer share: ≈8%

Private funding in the project:

Effectively zero.
Even the construction loan is backed by guaranteed rent streams and public subsidies.

Final tally:
≈98–100% of the project’s $13.17M cost came from taxpayers or ratepayers.

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How many deeply affordable units did Vermonters actually buy?

Five.

Of the 24 units:

• 5 are set aside for households exiting homelessness
• 19 are standard LIHTC “income-qualified” units with fixed rents

The advertised rent for those 19 units is $850–$1,350 per month, with utilities included. These rents are below market, but they are not tied to tenant income and are not deeply affordable in the Section 8 sense.

Crucially:

• Every one of the 24 units is eligible for additional taxpayer-funded rent subsidies
• Tenants who cannot afford the fixed LIHTC rent can still use Section 8, Vermont Rental Assistance, Emergency Housing, Rapid Re-Housing, or other state and federal programs
• Nothing in LIHTC regulations prohibits subsidy stacking
• Nothing forces the owner to reduce rent or “eat the difference”

This produces the system’s most counterintuitive outcome:

**Taxpayers pay to build the building,

and then taxpayers pay rent inside the building they already funded.**

What this means for Vermont’s statewide housing goals

Vermont’s housing needs assessment estimates 24,000–41,000 new homes are required by 2030. Not all of those will be publicly funded, and not all will resemble Marble Village. Many will be private construction, accessory dwellings, rehabbed units, or conversions.

But the part that is expected to come from subsidized nonprofit development — including housing for very low-income and homeless households — must use the same model Marble Village used. And that model has a documented cost structure:

• $325–$350 per sq ft for construction
• $600+ per sq ft once regulatory, financing, and soft costs are added
• 98–100% taxpayer or ratepayer funded
• Only a fraction of units deeply affordable

At that cost level, the current approach cannot scale to meet a significant portion of the statewide demand.

To illustrate the constraint, if even 5,000 of the needed homes (roughly one-fifth of the state’s goal) were built under a Marble Village–style structure, the capital cost would exceed:

• 5,000 × roughly $500,000 per unit = $2.5 billion

And that figure includes only the construction cost — not the ongoing rental subsidies many of those units will require.

In other words:

Even without assuming 24,000 units at $615/sq ft, the math shows Vermont cannot build its way out of the housing crisis using the current subsidized model alone.

This conclusion is supported by data, not speculation.**

The bottom line

Marble Village offers a clear view into the structure of “affordable housing” in Vermont:

• $13.17M total cost
• $7.56M actual construction
• $615 per square foot
• 98–100% publicly funded
• Only 5 deeply affordable units
• All units still eligible for rent subsidies
• Nonprofit owns the building; taxpayers hold no equity
• Systemic soft-cost inflation doubles project cost

This is not mismanagement.
This is not corruption.
This is the expected outcome of Vermont’s current development model.

As the state pushes for tens of thousands of new homes, understanding the true cost and true output of this model will be central to any discussion of how to house Vermonters effectively — and affordably.

When the project opened, several outlets celebrated the “$13 million affordable housing investment” without once pausing to consider whether it ever needed to cost $13 million. If they had looked at the building’s own Act 250 filings — the ones showing $7.56 million in actual construction cost — they might have asked why taxpayers paid for one $13 million project instead of two $7 million ones.

By presenting the inflated number as an achievement rather than a warning sign, the public was left with a feel-good headline instead of a hard question: how much of Vermont’s housing crisis is the direct result of a system that quietly doubles the cost of every unit it produces?

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Dave Soulia | FYIVT

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