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Facing Funding Crunch, Two Nonprofits Decide to Move in Together

Local Matters


Published October 25, 2005 at 8:13 p.m.

VERMONT -- Two of Vermont's largest housing nonprofits could be shacking up. After mulling over their options for more than a year, the Burlington Community Land Trust and the Lake Champlain Housing Development Corporation have decided it's in their mutual best interest to merge into a single entity rather than trying to compete for increasingly expensive land and dwindling federal housing dollars.

Both organizations see the proposed merger as part of a natural evolution in the nonprofit housing sector. They also believe that a single, larger nonprofit could better weather today's harsh political climate.

"My belief is characterized by the phrase, 'Stability in life is change,'" says John Powell, LCHDC's executive director. "When you look at the biology of a species, those that don't change go extinct."

Both housing agencies were founded in 1984 by the City of Burlington. For years, they operated in geographically distinct regions and had different areas of emphasis: LCHDC developed and restored rental properties in Franklin, Grand Isle and Chittenden counties, primarily outside of Burlington. BCLT focused on owner-occupied homes and condominiums within the city, particularly the Old North End.

Over the years, however, both groups diversified their housing portfolios and expanded their geographical reach. Today, LCHDC is Vermont's largest nonprofit rental organization, with about 1100 apartments; BCLT is the nation's largest community land trust, with more than 380 single-family homes and condos. Though their organizational structures are somewhat different -- notably, BCLT is a membership agency, with approximately 2600 members -- their missions are effectively the same: to provide safe, clean and affordable housing to low- and moderate-income residents.

Both organizations see an opportunity to gain from the other's strengths. For example, BCLT currently manages about 370 affordable rental units, which are scattered throughout Burlington. Brenda Torpy, BCLT's executive director, says the residents of those apartments would be better served by LCHDC, which is one of the largest property managers in the state. Likewise, LCHDC could gain from the benefit of an active membership that provides feedback to a board of directors.

Clearly, the current political climate is a driving factor behind the proposed merger. Though neither agency is in crisis, as Torpy says, "Things could get dodgy for both of us in the next five years.

"When I started doing this work in Vermont 25 years ago, a homeless person was a huge crisis. You wouldn't go home on a Friday night if someone was homeless," she says. But as a result of the housing cuts of the 1980s and early 1990s, "homelessness became an industry." Meanwhile, the prices of land, construction and building materials in Vermont have all increased exponentially throughout the 1990s, while tax incentives to develop affordable housing dried up.

After George W. Bush's reelection, the writing was on the wall: In the nonprofit housing sector, things are expected to get worse before they get better.

"The funding climate that we're operating in has become dire," notes John E. Davis, LCHDC's board president. "When you have a federal administration spending $200 billion on the war in Iraq and nation-building, there's not a whole lot left for revitalizing local communities."

Neither organization expects the merger to result in major cost savings or staff cuts, and both groups say their respective tenants and members should see no deterioration in services. In fact, at a public meeting last week at the MultiGenerational Center in Burlington, about 40 residents voiced their interest in the proposed merger and said they want to be sure the new entity, whatever it's called, is accountable to residents.

Davis characterized the residents' concerns as "enough healthy skepticism but good will and support" for both board plans to proceed with the merger.

It isn't a done deal. Vermont laws requires a "plan of merger" to be approved by the board of both organizations. BCLT's members will also have to sign off on the deal. If they approve it, the merger would take effect in October of next year.