Mission-Minded Investors Help Finance Market-Rate Housing in St. Johnsbury | Housing Crisis | Seven Days | Vermont's Independent Voice

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Mission-Minded Investors Help Finance Market-Rate Housing in St. Johnsbury


Published March 26, 2024 at 12:36 p.m.

Joe Kasprzak, St. Johnsbury assistant town manager, at the former hotel building - STEVE LEGGE
  • Steve Legge
  • Joe Kasprzak, St. Johnsbury assistant town manager, at the former hotel building
Investors who want to make a difference are teaming up with a New Hampshire-based nonprofit in an unusual effort to create market-rate housing in downtown St. Johnsbury.

The Northern Forest Center purchased a former hotel on Railroad Street in 2022 and is renovating it this year to create nine apartments and two commercial spaces. The center plans to create housing for workers who make too much money to qualify for affordable housing programs, but too little to buy a home in an overheated real estate market — a category some have called the “missing middle.”

Since the project is not eligible for some state and federal programs because the housing will be offered at market rates, the Northern Forest Center is turning to investors who are willing to accept what is typically a lower rate of return while making a difference in the community.

“It’s a way of letting our retirement dollars work inside Vermont,” said former House speaker Gaye Symington of Jericho, who has invested in the project.

The Forest Center, based in Concord, N.H., has long focused on areas such as recreation, business development for wood products companies and environmental sustainability. It works in areas of Maine, New Hampshire, Vermont and New York that have relied on the forest products industry.

As home prices have soared, housing has become a logical problem for the group to address, said board member Tabitha Bowling, who, with her wife, is also investing in the Railroad Street project.

“It’s a passion project for us,” said Bowling, of Burke, who worries what would happen if the region’s two local hospitals couldn’t find the staff they need.

“People might look at this from the outside and say, ‘Ten units isn’t that much; you’re just scratching the surface,’” Bowling said. “But it does make a difference. It’s 10 more units that are viable for teachers or nurses or young doctors or radiology techs, the whole spectrum of that income bracket.”

The Forest Center’s first foray into housing development, in 2018, was the renovation of six apartments in Millinocket, Maine. Last year, it finished work on a $3 million renovation in Lancaster, N.H.

The latter project inspired St. Johnsbury assistant town manager Joe Kasprzak to contact the Forest Center about buying the1908 building, then home to a small art studio. The town has supported some affordable apartment projects in recent years, and Kasprzak was looking for a way to build mid-priced housing, too.

“It’s hard to make these projects pencil out when you take the federal funds for affordable housing out of it,” Kasprzak said.

The center expects to spend $5.9 million on the St. Johnsbury project, said Evan Oleson, its Northeast Kingdom program manager.

So-called mission investment has been used for years in Vermont. The Vermont Community Loan Fund uses it to help local small businesses that might have trouble securing conventional financing. The Vermont Community Foundation has committed to using at least 5 percent of its assets to support community goals. For larger investors, the Flexible Capital Fund focuses on helping green businesses grow in Vermont.

Shawn Tester, CEO of Northeastern Vermont Regional Hospital in St. Johnsbury, has served as a local adviser to the center, and he and his wife have invested money in the apartment building. Tester often talks to policymakers about how the housing shortage limits hiring at the hospital.

“Will it solve my problems? Maybe not,” he said. “But we need a lot more housing, and every little bit helps.”

The project’s backers hope that the center’s downtown redevelopment — one of many apartment renovations under way or planned in St. Johnsbury — will prompt for-profit developers to take a new look at some of the town’s other empty downtown buildings.

Rob Riley, president of the Northern Forest Center,  said his investors often get a 5 percent return on their money, as well as the satisfaction of knowing they’re helping a rural community survive. “I have not seen a comparable model anywhere,” he said.

Kasprzak inside the building - STEVE LEGGE
  • Steve Legge
  • Kasprzak inside the building



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