Community and Housing Infrastructure Program (CHIP)

Community and Housing Infrastructure Program (CHIP) is sponsored by Vermont Agency of Commerce and Community Development. A statewide tax increment financing tool designed to help communities invest in infrastructure to unlock housing opportunities.

Community and Housing Infrastructure Program (CHIP) | Agency of Commerce and Community Development Northern Border Regional Commission (NBRC) Vermont Economic Progress Council (VEPC) Community and Housing Infrastructure Program (CHIP) Tax Increment Financing (TIF) Vermont Employment Growth Incentive (VEGI) VEPC Meeting Agendas and Minutes Community and Housing Infrastructure Program (CHIP) Guidelines for the program have been approved by the Vermont Economic Progress Council (VEPC).

They outline the criteria and procedures governing the program's housing infrastructure project applications, VEPC review, and related requirements. The Community and Housing Infrastructure Program (CHIP) is a statewide tax increment financing tool designed to help Vermont communities unlock housing opportunities by investing in critical public infrastructure.

With CHIP, $2 billion can be invested between now and 2035, one of the largest investments in municipal infrastructure in Vermont history. The program launched on January 30th. The portal link can be found below.

CHIP enables municipalities to finance essential infrastructure (like water, sewer, roads, and stormwater systems) that supports new housing development.

It allows towns and cities to: Access long-term financing without raising local property taxes Capture a portion of new property tax revenues from future development Invest in public improvements that directly support the creation of homes Infrastructure is one of the biggest barriers to housing development in Vermont.

CHIP provides a scalable, municipality-driven solution to this challenge by giving communities the financial tools to: Develop the types of housing most needed in their community Support economic growth and workforce needs Help generate an estimated $380 million in new Education Fund revenue over time, without raising taxes Municipalities apply to the Vermont Economic Progress Council (VEPC) to designate housing development sites.

Once approved, towns can retain a portion of new property tax revenue to pay for infrastructure investments for up to 20 years: Not less than 85% of new municipal tax increment Up to 75% of education tax increment for market-rate developments Up to 85% of education tax increment for developments with at least 15% affordable units Both rental and homeownership projects are eligible.

Debt may be issued by municipalities, developers, or third-party sponsors. The first step of the application process is to complete a brief online form to provide VEPC with a high-level overview of your project. This will help track program interest and anticipate incoming applications.

CHIP Application Portal User Guide (PDF) Apply Now – Online Portal Delivered in partnership with the Vermont League of Cities and Towns (VLCT): This kick-off session provides the high-level basics of what CHIP is and how municipalities might use this new financing tool to build the infrastructure to support the creation of new housing in their community.

This session provides a clear overview of CHIP, including: How the program works and what makes it different from traditional funding tools Eligibility requirements and key guardrails to ensure responsible implementation The timeline and expectations for program launch VLCT’s upcoming 3-year CHIP technical assistance program - “CHIP IN VT” (CHIP Invest in Vermont) Whether you’re a town manager or administrator, selectboard member, lister, assessor, treasurer, or local or regional planning or development staff, this session will help you understand what CHIP is and how it can be a game-changer for communities of all sizes.

Presentation: CHIP Program Slides – VLCT & VEPC (PDF) Video: Introducing CHIP – Vermont's $2B Housing and Infrastructure Program (YouTube) Delivered in partnership with the Council of Development Finance Agencies: This three-part webinar series will help local leaders understand how tax increment financing works and supports community investment.

This series explores the steps local municipalities should take to implement CHIP and is designed for first-time learners and local leaders to lay the foundation for responsibly putting this tool into action.

Thursday, January 15 (2:00 PM - 3:30 PM) - Implementing CHIP: Rules, Requirements & Readiness Thursday, January 13 (2:00 PM - 3:30 PM) - In Practice: Targeted Tools in Infrastructure and Housing Development Thursday, January 8 (2:00 PM - 3:30 PM) - Understanding TIF: Intro to Tax Increment Finance for Vermont Communities Does Eligible CHIP Infrastructure Have a Proportionality Component?

No, CHIP does not include a proportionality component. Eligible improvements under CHIP are not required to be prorated to the housing development’s use of the infrastructure. However, a de-facto proration will be applied based on the potential increment the site could generate.

The maximum that site could contribute to the improvement is the amount of new tax revenue the housing development will generate over the increment retention period. The critical piece is that the applicant must demonstrate the improvement is necessary to enable the CHIP housing development, regardless of how many other homes/businesses the improvement may support.

Are impact fees, or similar one-time charges levied by municipalities for public infrastructure improvements, eligible under CHIP? Yes, impact fees and similar one-time fees used to offset the cost of public services infrastructure for new housing developments are eligible under CHIP.

The fees must be paid at the time of construction, based on a rational nexus of the project, and collected in a capital account under the legal authorization of the municipality for the purpose of emergency repairs and/or future upgrades to the CHIP-financed public service infrastructure, including utilities. No. CHIP is a financing tool using Tax Increment Financing (TIF). Is there a deadline to submit a CHIP application?

No. Applications will be accepted on a rolling basis until December 31, 2035. Is there a deadline to submit the Interest Form? No. There is no deadline to submit the interest form; however, municipalities should submit the form within a year of the CHIP project being "shovel ready".

Can a CHIP project site be located within an existing TIF District? No, the CHIP project site cannot be located within an existing TIF District. Can a land trust/landowner/developer/sponsor submit a CHIP application?

No, only a municipality can apply. Therefore, a land trust/landowner/developer/sponsor is encouraged to discuss a potential housing development project with the appropriate municipality. How does a municipality begin the application process?

The municipality must first submit an interest form . How long does the application process take? After review of the full application, a site visit of the proposed development site will be conducted.

The application will then be approved or denied in writing within 90 days. Are related costs eligible? Yes.

Related costs are costs incurred by the municipality, sponsor, and/or developer associated with the creation, implementation, and administration of the CHIP site. Please see the CHIP guidelines for further examples. The following costs are not eligible: annual municipal operating costs, public transportation operating costs, annual maintenance or repair costs, purchase of vehicles, and interior furnishings.

Is a “but for” narrative required? Affordable housing does not require a “but for” narrative. All other proposed developments do.

Department of Economic Development Newsletter Department of Housing and Community Development Newsletter For inquiries related to CHIP, please email ACCD. CHIP@vermont. gov .