Due to its upward pressure on South Burlington’s home prices, I urge the city council to end its ban on homebuilding in certain neighborhoods (aka Interim Zoning). Due to the housing market disruption such a ban causes, studies and planning efforts should be conducted simultaneously to the normal course of municipal business. The stakes for housing affordability and community prosperity are simply too high to condone sudden policy shifts.
South Burlington is fortunate to enjoy modest economic and population growth. When housing construction meets demand, the market and home prices remain stable. But when development is unduly constrained, prices rise, quickly outpacing wage growth, especially in areas experiencing growing residential demand. Although local land use regulations are not the only reason for rising home prices, they are a factor municipalities can control.
Despite its focus on new homes, Interim Zoning limits opportunities for Vermonters across the income spectrum. New, privately developed homes are rarely affordable to middle income households, but the prior homes of new home buyers often are. If an existing city resident wants to move to a newly-constructed home here but finds too limited a supply to meet their needs, they may not move. Allowing the private market to build sufficient move-up options frees up an existing home for a middle-or lower-income buyer.
A low inventory of for-sale homes is exacerbated by residential development restrictions. The number of city homes sold each year fell from 380 in 2013 to 309 in 2017. Few options for buyers puts upward pressure on prices, reducing affordability for workers in growing employment sectors.
South Burlington has experienced modest annual housing stock growth of two percent, similar to Essex, Shelburne, and Williston. Continuing this is essential for local and regional economic vitality. With urgent calls from employers for more housing options affordable to workers, the economic fate of the region rests on the ability of communities to facilitate, not discourage, expanding the housing supply.