The Housing Crisis Part 3: Burlington's Housing Needs
This is part of a series on the housing crisis that is impacting Burlington, VT. These are all of the published parts of this series:
In Part 1, I outlined the history of city and state level policies that have restricted housing in BTV/VT, which has caused urban stagnation and suburban sprawl in Chittenden County. In Part 2, I explained how these policies have been a direct cause of housing cost and property tax spikes, homelessness, and public safety issues the city (and state) are now facing. In this post, I will get back to the numbers and explain just how much housing Burlington needs.
The most important number to consider when determining the health of a housing market is the vacancy rate. This is the proportion of housing units that are circulating on the market but not filled at a given point in time. The vacancy rate is important for two primary reasons: the vacancy rate determines how easy it is for someone who is seeking housing to have enough options to make a good decision (i.e. living close to work or family), and also pushes those who are selling or renting housing to compete with each other on price, preventing inflation of costs. The generally accepted healthy vacancy rate is 5%, and usually homes for sale and for rent have separately tracked vacancy rates. Both of these vacancy rate numbers are chronically—and currently *critically*—low in Chittenden County (0.5% for ownership, 1.56% for rentals).
The primary goal of any housing policy that aims to stabilize costs and give people more choices for housing is to increase the vacancy rate. Unfortunately, it’s very difficult to predict how many more housing units we need to get the vacancy rate to a target level, because new units can be filled by people moving into an area. This means that the only guaranteed way to know how much housing is needed to get to a certain vacancy rate is to just build the housing and track the data. However, while we might not be able to determine exactly how many units we need, we can crunch numbers to get a ballpark estimate of the units we need.
In Chittenden County, our housing targets are mostly centered on the Building Homes Together 2.0 initiative. This plan is rooted in historical data projections, but also grounded in our current realistic capacity for building (which I’ll remind you is insufficient). The plan calls for 5,000 homes built in Chittenden County between 2021 and 2026, and the Weinberger administration’s 2021 housing plan target of 1250 units by 2026 is Burlington’s share—it was the total 5,000 units times Burlington’s 25% of the county’s population.
More recently in 2023, the Vermont Housing Finance Agency put together an even more comprehensive statewide analysis of housing need, without worrying about what was currently possible. Their report shows that Vermont needs 30,000 to 40,000 new units built by 2030. This is currently our best assessment of how many units we need, and accounts for units lost to damage, our current shortfall, and state-wide population growth between 2023 and 2030.
And so what does this mean for Burlington? Let’s establish a low-end and high-end estimate for needed units. The low-end estimate is easy: Burlington contains 7% of the state’s population, so we can say the minimum amount of units Burlington needs is 7% of 30,000, meaning 2,100 units by 2030, for a pace of 350 units per year. This assumes no proportional growth of Burlington. A high-end estimate is more complex: we have to remember that BTV’s current population is artificially suppressed by housing scarcity. If we take Burlington’s peak share of county population (53% in 1950) and adjust it to today’s population of Chittenden County (170,000), we’d get a weighted population of 90,000 for Burlington today. This is 14% of VT’s population which we can take from the high-end estimate of 40,000 units, giving us a need of 5,600 units by 2030, for a pace of 933 units per year. This still doesn’t account for Chittenden County’s inclination to grow faster than the state as a whole, and so I feel that rounding it up to an even 1,000 gives us a healthy upper bound.
This makes our best guess approximation of Burlington’s housing production need to be 350 to 1,000 units per year, with a median pace of 675 units per year. But again, it’s difficult to know which part of this range will be effective until we start building and assessing the data. That means that from a policy perspective, we have to target the upper bound; there’s a risk that if we only target 350 or 675 units per year, we may find that it doesn’t make a dent in practice.
To conclude: the best guess for what Burlington needs to stabilize housing costs and alleviate the homelessness crisis is to develop housing policy, financing, and workforce development programs to enable the construction of 1,000 new units of housing per year.
In the next post I will outline the current barriers to this goal.