As Vermont grapples with a worsening housing crisis, the state’s Landlord-Tenant Law Study Committee has produced its long-awaited report, due December 15, 2024. Ostensibly created to provide solutions to the challenges landlords and tenants face, the report devotes considerable attention to tenant protections while largely glossing over the structural issues driving housing unaffordability in Vermont. Most strikingly, it fails to critically examine the role of the state of Vermont itself in creating and perpetuating this crisis—a glaring omission given that the state commissioned this very report.
This report, accessible here, embodies the adage: “You can ignore reality, but you cannot ignore the consequences of ignoring reality.” The reality ignored in Vermont’s housing crisis is that state-imposed regulations, taxes, fees, and out-of-control spending have made it nearly impossible to build or maintain affordable housing. These costs inevitably bubble down to renters, who feel the brunt of high property taxes passed along as rising rents, even if they don’t receive the bill directly.
The Report’s Shortcomings
The report leans heavily into proposals for tenant protections, including rent control, just cause eviction laws, and expanded tenant legal representation. While these measures might stabilize some renters in the short term, they fail to address the root cause of Vermont’s housing crisis: the exorbitant cost of building and maintaining housing. The report acknowledges that Vermont’s aging housing stock and rising construction costs exacerbate the crisis but avoids asking why these costs are so high.
The answer lies in state policies and excessive government spending. Vermont’s permitting processes, such as those governed by Act 250, impose significant delays and costs on housing development. Property taxes—some of the highest in the country—are driven by the state’s relentless spending growth. Landlords, forced to cover these escalating costs, have no choice but to pass them along to renters. While tenants may believe landlords are the source of high rents—an idea encouraged by some politicians—the reality is that Vermont’s property tax system and regulatory burdens are the root cause. And yet, this cause is almost never discussed.
A Looming Crisis: Rising Property Taxes
Adding to the housing affordability crisis are steep property tax increases in 2024, with another large increase anticipated in 2025. Renters, who already face high housing costs, should expect a state-driven rise in their rents as these taxes continue to climb. Property owners, unable to absorb these growing tax bills, will inevitably pass the burden to tenants.
Ask any property owner or landlord in Vermont, and they’ll tell you: property taxes are a killer in this state. Renters, meanwhile, often assume it’s their landlords raising prices arbitrarily, without realizing they are effectively paying the state’s skyrocketing tax bills and compliance costs. Vermont’s politicians, eager to avoid blame for these rising costs, have failed to address this fundamental problem, instead directing renters’ frustrations at landlords.
The Villains and Heroes Fallacy
Tenant advocacy groups and some politicians often portray landlords as villains, framing them as opportunists exploiting vulnerable renters. This oversimplified narrative ignores the significant financial risks landlords take in providing housing. A missed rent payment can leave a landlord scrambling to cover property taxes, mortgage payments, and maintenance costs. If landlords default, they lose not only their income but also their investments, often their retirement savings.
Meanwhile, the real “villain” in this story is the state of Vermont itself. By enacting restrictive zoning laws, imposing costly permitting requirements, and layering on high taxes, the state has made housing construction and maintenance prohibitively expensive. While tenant advocacy efforts focus on regulating landlords, the reality is that Vermont’s policies drive these high costs, and landlords are simply passing them along to renters.
Math Is a Cruel Mistress
The housing crisis boils down to a simple but inescapable truth: the math must add up. Landlords, developers, and tenants cannot escape the cumulative costs of property taxes, regulatory fees, labor, and materials. Policies like rent control may cap what tenants pay, but they don’t reduce these underlying costs. If landlords can’t cover them, they’ll leave the market, exacerbating the housing shortage.
The cruel reality is this: you cannot spend indiscriminately and expect housing to remain affordable. Vermont’s unchecked spending and heavy regulatory hand have driven up the cost of housing. Without addressing these systemic issues, no amount of tenant protections will solve the crisis.
A Path to True Balance
To achieve real progress, Vermont must take a balanced approach that acknowledges the root cause of high housing costs: state overspending and its resultant tax burden. While tenant protections dominate the report’s recommendations, meaningful solutions must also address the challenges landlords face without further inflating state spending.
The report fails to propose measures that reflect the reality landlords contend with, such as rising property taxes, tenant nonpayment, and damage liabilities. While there are potential balancing ideas, these must be weighed against the state’s spending trajectory:
- Mortgage and Property Tax Relief: Providing relief during tenant nonpayment or economic downturns could stabilize the rental market, but this approach requires additional state funding and could further raise property taxes if not offset.
- Landlord Risk Mitigation: Programs like state-backed insurance pools or damage relief funds would protect landlords, but implementing them would increase state expenditures, placing more strain on taxpayers—including renters indirectly.
- Streamlined Permitting and Regulatory Reforms: Unlike the above, simplifying housing permits and reducing unnecessary regulatory burdens could reduce housing costs without additional state spending. This approach incentivizes private investment and lowers costs naturally.
- Private Market Incentives for Affordable Housing: Tax breaks or grants for landlords who maintain affordable rents or invest in new housing could offset costs, but only if paired with disciplined state spending to avoid further tax increases.
The reality is that both tenant protections and landlord relief ideas depend on state spending, which exacerbates the very problem driving Vermont’s housing crisis: the unsustainable tax burden on property owners and renters alike. A truly balanced approach must prioritize reducing the cost of building and maintaining housing through regulatory reforms rather than continuing to increase public expenditures.
Final Thoughts
The Landlord-Tenant Law Study Committee Report reflects a troubling tendency among Vermont’s policymakers: focusing on short-term tenant protections while ignoring the structural drivers of housing costs. Renters may not see the property tax bill, but they feel its effects in every rent check. As long as Vermont’s spending and regulatory policies go unchecked, housing will remain unaffordable for the majority of its residents.
In the end, “you can ignore reality, but you cannot ignore the consequences of ignoring reality.” And Vermont’s housing crisis, driven by high taxes and unchecked spending, is a painful reminder that math is a cruel mistress. Without addressing the true costs of housing, the crisis will only worsen, leaving renters, landlords, and the state itself to deal with the consequences.
Dave Soulia | FYIVT
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