- Diana Bolton
The goal is to address a housing shortage that is making it difficult for companies to find staff and is hurting the economy, said Clay Adams, president and CEO of Mascoma Bank, one of the contributors. The fund will lend at an interest rate of just 1.5 percent over 15 years.
Some of the companies involved, including Mascoma, have a social mission, but Adams said the impetus was economic.
“The housing market is not functioning in a healthy manner, and this is the way these businesses felt they could help create more housing for the employees they need to hire," he said.
Related Raising Homes: It Takes a Village to Grow Housing. How Vermont Towns Are Trying to Make It Happen
Evernorth is still talking to prospective investors, and isn’t actively soliciting more, Flannery said. The minimum investment is $100,000. If the fund is a success, she said, Evernorth might start another.
Flannery noted that at such a low interest rate at a 15-year term, the investment is effectively more of a gift than a loan, and will reduce project costs.
The Upper Valley housing project is modeled after others in the U.S. It sprang from talks held by about a dozen area CEOs through Vital Communities, a nonprofit that works to strengthen business and community in several New Hampshire and Vermont towns. The target area for the loans roughly covers 43 towns in Orange and Windsor counties in Vermont, and Grafton and Sullivan counties in New Hampshire.
The region, home to Dartmouth College and the Dartmouth Hitchcock Medical Center, has some of the highest housing costs in Vermont and New Hampshire.
A recent study created by Vital Communities found that the area needs 10,000 new homes by 2030 to meet demand. About 230 units of housing have been added each year over the last 10 years, said Adams.
With businesses limiting their hours and curtailing services because they can’t find labor, he said, it was clear to all of the business leaders that they needed to do more to tackle housing.
“For the past four or five years, we have been bemoaning the fact that there’s a labor shortage,” said Adams, adding that the most common reason that prospective workers give for turning down jobs is that they can’t find a place to live. “This is something we’ve been talking about as employers for quite some time.”
The $10 million fund is expected to produce an additional 260 rental homes available for people earning 50 percent to 80 percent of the area median income, or from $13 an hour to $25 an hour. The new housing will be multifamily developments, not individual homes, Flannery said. In return for the low-cost, flexible financing, developers will have to accept deed restrictions limiting how much they can charge for the rental units.
Adams said organizers are aware there are many people looking for housing who earn too much to qualify for those income restrictions, but who can’t afford the housing on the market now. He said adding new apartments will make a difference for everyone who is seeking housing.
“The supply is so constrained that any additional units on the spectrum are going to help,” he said.