Middlebury College Aids 250-Unit Housing Project Near Campus

Summit Properties had had its eye on 35 acres near downtown Middlebury for years. The South Burlington company was looking for a place to build a housing development, but the cost of the land made the project too expensive.

Middlebury College had been on the lookout, too. The housing crisis was making it hard for the college to hire for open positions, and college officials wanted to alleviate the housing shortage in a way that would help all local employers.

So, with a partnership in mind, the school approached Zeke Davisson, a Middlebury alum who is COO of Summit Properties. The college, which has an endowment of $1.5 billion, paid $1.5 million for the property Summit had been eyeing. The college sold a historic home on the property for $500,000 and in 2022 gave Summit permission to build on the remaining 35 acres. Summit will pay for the land over time, at a lower-than-market price.

In May, the company will start work on the first phase of a multiyear housing project with plans to eventually create more than 250 homes and apartments. The first units will be ready for occupants this fall. Cooperation from the college and the town, and an array of public financing, will enable Summit to rent and sell the units for hundreds of thousands of dollars less than their market value, Davisson said, creating the kind of scarce middle-income housing that is in short supply, particularly outside Chittenden County.

Increasingly, developers are saying construction of new worker housing isn’t feasible without a concerted effort like the one in Middlebury — a complex project that has included the builder, housing-friendly town officials who did the paperwork needed to ease construction, a local employer with deep pockets, and a complex stack of grants and tax credits to defray the costs of preparing the site and building the homes.

Town officials in Middlebury, eager to promote housing, created a state “neighborhood development area” that exempts the project from Act 250, the Vermont land-use law, and makes it eligible for a number of funding incentives.

“It couldn’t have happened without the leadership of the college and without the town and developer getting on the same page about what was needed,” said Maura Collins, executive director of the Vermont Housing Finance Agency, which worked closely with the group to provide access to financing.

“They had a shared vision of homeownership and rentals that made it work,” Collins said of the many parties.

As the costs of construction have risen in recent years, housing advocates have increasingly asked employers to help find a way to build. Many are trying. Shawn Tester, CEO of the Northeastern Vermont Regional Hospital, is working with the Northern Forest Center to ease the path for a builder to construct homes on about 40 acres that the hospital owns in St. Johnsbury.

“Our hope is to get the site developer-ready, with permitting and site plans ready to go,” said Tester, who last year received $100,000 from the Town of St. Johnsbury and $400,000 from the U.S. Forest Service to pay for the site development.

In South Burlington, electric aviation manufacturer Beta Technologies and computer hardware company OnLogic have both discussed ways to provide more homes for employees.

The Champlain Valley School District is exploring the potential for building homes on 30 acres it owns in Shelburne, according to communications manager Tyler Cohen.

But high costs can make housing development prohibitive for employers, even ones that own land. And few relish the idea of branching into the home-building business. Jason Webster, copresident and owner of the modular housing company Huntington Homes in East Montpelier, said providing health insurance already feels like too much involvement in his workers’ lives.

“I want to avoid the entanglement,” he said.

Some are making it work. The University of Vermont and the Braverman Co. are both investors in a building complex in the new South Burlington City Center. The project started with two apartment buildings for graduate students. A third building scheduled to open in November will be open to faculty and staff, too.

As an investor, the builder has an incentive to keep the project costs down, said Richard Cate, UVM’s vice president for finance and administration. Nevertheless, rents are comparable to those in neighboring buildings, and “some of the graduate students would tell you it’s not affordable,” he said. The apartments start at around $1,900 for a studio and $2,600 for a two-bedroom.

The University of Vermont Medical Center has built more than 180 South Burlington apartments for its faculty and staff in the past few years as part of a partnership with a private developer. In the building the UVM Medical Center opened in June, rent for some apartments is capped at 30 percent of the household’s income. The medical center belongs to a coalition launched last fall called Let’s Build Homes that aims to construct 30,000 new homes in Vermont by the end of 2029.

The cooperative effort in Middlebury, Stonecrop Meadows, is planned to include 254 new homes, including an apartment building, townhouses and single-family homes. Summit, a family-owned company with a large portfolio of rental properties, is relying on a $5.7 million award from the Vermont Housing & Conservation Board, $750,000 from the state’s Community Recovery and Revitalization Program, and another $1.2 million in federal money from the Vermont Agency of Commerce and Community Development. The Vermont Housing Finance Agency is kicking in more than $22 million in low-interest loans and federal low-income housing tax credits.

Davisson expects Middlebury College to recoup the cost of the land it bought but said the school won’t turn a profit on its decision to make it available to Summit.

“In that way, they’re subsidizing the cost of affordable housing,” he said.

With all those subsidies in play, the Stonecrop Meadows homes will be priced within reach of Vermonters — at least, the ones with good incomes. The cash infusion will shave about $200,000 off the purchase price of a home built in the first phase and $400 to $600 off monthly rents in the 35-unit apartment building, Davisson said — adding that it’s too early to know what the rents will be.

And the subsidies will enable the company to offer 37 of the first 45 townhomes and duplexes at lower prices for families with qualifying incomes.

For a buyer who qualifies, a three-bedroom, three-bath townhome is listed at $358,000 by Signature Properties of Vermont, which has sold some of the homes while workers are still preparing the ground for construction. The same unit is listed at $545,000 for people who don’t qualify for subsidies.

With about 1,200 employees, Middlebury College is Addison County’s largest employer. Twenty percent of the college’s workers commute to and from New York State, at least half an hour away, where home prices are lower than in Vermont.

David Provost, the college’s executive vice president of finance and administration, said the college has been searching for years for ways to help its employees find a place to live. It offers a second-mortgage program for its tenure-track faculty, but that’s not enough, he said, and faculty have been forced to live farther and farther afield. He added that Stonecrop Meadows will be open to anyone, no matter where they work.

“This isn’t a Middlebury College neighborhood,” he said of the development, which is half a mile from campus. “We were adamant about that.”

The first homes at Stonecrop Meadows are expected to go up quickly, after they’re delivered in prefabricated sections from Huntington Homes on May 5 and 6. Whatever the weather on that day, Davisson said, 12 modular units will be dropped onto newly poured foundations, ready for the addition of porches and siding. Davisson expects to have certificates of occupancy in hand within two months.

There’s no timeline yet for the other phases, which Davisson would like to see include apartments, senior housing and more homes. The company is still looking for investors to help with the future phases.

Davisson knows his company is well positioned to do something most others cannot. His is the only private construction company in Vermont that regularly uses the federal low-income housing tax credit program to subsidize affordable housing. And Summit received a large share of the pandemic-era American Rescue Plan Act relief money designated for housing.

“There was a special sauce here, and yes, it included ARPA funding and a large employer,” he said. “But it would have meant nothing if the town hadn’t recognized their issue: empty schools, no grand list growth, no way for employers to grow.”

He said he’s gotten calls from housing task force members in other towns asking, “‘What will it take?'”

For Davisson, the most important ingredient is the creation of neighborhood development areas. It’s that state designation, which is obtained by the town, that exempts the site from Act 250 environmental review.

“And it takes zoning administrators who work on policies that attract development,” Davisson said. “Developers will go where the [development review boards] are reasonable.”