Earlier this year, Vermont took a major step forward in addressing our housing shortage by creating the Community and Housing Infrastructure Program (CHIP). This program allows communities to use future property tax revenue from new housing developments to pay for the infrastructure those homes need today—things like water lines, roads, and septic systems. By solving the upfront infrastructure funding challenge that stops many housing projects before they start, CHIP could unlock thousands of new homes across Vermont.

Since the legislation passed, we've been closely following the development of CHIP's implementation guidelines. Throughout the summer, we attended meetings of the CHIP Guidelines Subcommittee of the Vermont Economic Progress Council (VEPC), watching as state officials worked to translate the law into practical rules that communities can actually use. The draft guidelines have now been through the subcommittee process and have had their first hearing before VEPC, with final approval expected in October.

Most of what we've seen gives us reason for optimism. The draft guidelines embrace the program's broad vision, allowing communities to use CHIP for various types of infrastructure and explicitly permitting developers to participate as sponsors—both essential elements for making the program work statewide. These choices reflect the diverse needs of Vermont's communities, from our small cities to our rural towns.

But two specific areas in the current draft could limit CHIP's effectiveness in practice if left unchanged.

First, the guidelines require that privately-owned infrastructure be "publicly accessible." While this might sound reasonable, it creates real problems for rural communities that need community septic systems to make housing possible. These systems serve multiple homes but aren't "publicly accessible" in the traditional sense. Under the current language, it's unclear whether these essential projects would qualify for CHIP funding, potentially leaving rural communities with limited access to this critical tool.

Second, we believe the definition of "public good" remains unnecessarily vague. The draft definition contains subjective language requiring the public good to be "articulated beyond the value created for the development." This is ambiguous, and creates confusion when the statute itself clearly identifies the public good: enabling new primary residences across Vermont. If housing creation itself is the public benefit, we shouldn't need to search for additional justifications.

These aren't just technical details. Clear, objective guidelines determine whether communities feel confident moving forward with CHIP applications. Ambiguous language could discourage communities from pursuing viable projects or create unnecessary delays during the approval process.

We've proposed a few straightforward fixes to the language that ensure CHIP becomes the powerful tool Vermont needs to address our housing shortage. The guidelines are close to getting it right—we just need to ensure they work for all Vermont communities, rural and urban alike. As VEPC prepares for final approval next month, these refinements will make the difference between a good program and a transformative one.

If you'd like to read more about the technical details and our suggested fixes, read the full letter we sent to VEPC below.

Let's Build Homes strongly supports the Community and Housing Infrastructure Program (CHIP)—a project-based TIF tool designed to close infrastructure gaps so housing that would not otherwise be built can move forward statewide. As VEPC finalizes the CHIP guidelines, we offer support and recommendations to ensure CHIP becomes accessible to all Vermont communities, particularly focusing on infrastructure definitions, the public good standard, and developer financing options.

Our areas of focus

• Infrastructure definition: The guidelines provide a broad, non-exhaustive list of eligible infrastructure—a vision we strongly support. However, the requirement that privately-owned improvements be "publicly accessible" creates ambiguity for critical use cases like community septic systems in rural areas.
• Public good standard: While the updated definition acknowledges that improvements can provide both public and private benefits, the final sentence remains vague and subjective. Meanwhile, the statutory purpose clearly identifies the public good: enabling new primary residences to be built across all of Vermont.
• Developer financing: We applaud the explicit inclusion of developers as eligible sponsors, aligning Vermont with common practice in other states and expanding financing options.

During the legislative process, Let's Build Homes advocated for these very elements: broad infrastructure eligibility that acknowledges Vermont's diverse community needs, an objective purpose statement prioritizing housing growth for households of all backgrounds and income levels, and flexible financing options including developer participation. While the draft guidelines largely reflect these priorities, we see two critical areas that need refinement to ensure CHIP fulfills its promise.

Key concerns

• Infrastructure accessibility requirement

  Rural communities need CHIP for privately-owned community septic systems—infrastructure that is essential to housing but not "publicly accessible" in traditional terms. Current language creates uncertainty about eligibility despite legislative intent to support such projects. The existing requirements (meeting program purpose, public good, directly supporting housing) provide sufficient guardrails.

• Public good definition ambiguity

  The final sentence in the proposed definition ("Public good must be articulated beyond the value created for the development...") remains subjective. This creates unnecessary evaluation complexity when the statute already defines the public good: enabling new primary residences. This is a missed opportunity to explicitly recognize housing creation as the core public benefit.

These concerns risk limiting CHIP's accessibility and impact, and could either deter communities from pursuing otherwise viable projects, or create unnecessary roadblocks for some projects. Clear, objective language will give communities the confidence to move forward with CHIP applications.

Recommendations

1. Strike "publicly accessible" from the final bullet under eligible improvements

   Proposed: "Privately owned publicly accessible improvements that meet the purpose of the CHIP program, public good definition, and directly support the housing development project are eligible."

2. Replace public good definition with purpose-aligned standard

   Proposed: "Public Good: A benefit resulting from a CHIP-supported project that supports or directly enables the development of new primary residences in any community within the state of Vermont."

These straightforward changes align the guidelines with legislative intent while maintaining appropriate safeguards. By removing ambiguous language and anchoring the public good definition to CHIP's statutory purpose, VEPC can ensure consistent, predictable implementation across all Vermont communities.