This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.
Facing a reduction in federal funding, the Vermont State Housing Authority will stop issuing new rental assistance vouchers to low-income households on its lengthy waitlist, and has begun rescinding vouchers from about 50 Vermonters currently searching for an apartment to use them.
“We have a plan to curtail our spending and to protect families that are receiving rental assistance,” said Kathleen Berk, executive director of the Vermont State Housing Authority, the state’s largest administrator of the federal Section 8 program.
The housing authority faces a roughly $1 million funding reduction for the remainder of 2025, Berk said, which came as something of a surprise earlier this month. That funding gap is the result of a budget cut to a specific voucher program that serves disabled individuals, along with the lack of an annual inflation increase to keep up with rising rents, which Berk said had historically been included in yearly appropriations for rental assistance.
That means VSHA’s $39 million annual budget for vouchers won’t go as far. The funding loss means the housing authority must trim about 489 vouchers from its rolls, Berk indicated. That’s about 12% of the 3,897 vouchers the housing authority currently administers.
Because future funding is generally tied to past spending, Berk fears this year’s reduction in vouchers could lead to a “downward spiral” in the number of Vermonters getting rental aid in years to come.
As Vermont sees housing prices escalate and homelessness increase, federal housing vouchers play a key role in sustaining housing for low-income people who can’t afford market-rate rents. Voucher recipients pay a third of their income toward rent; a local agency administering the federal program pays for the rest.
The need is great. At 3,379 applicants, the state housing authority’s waitlist for vouchers nearly matches the number of households who currently have them. The waitlist has been closed since late January, when the housing authority first anticipated federal cuts.
The housing authority does not plan to take away vouchers from people who currently have them, Berk emphasized. Instead, it hopes to reduce its load primarily through attrition — by not giving out new vouchers when someone retires one. It is taking a few additional steps to hasten that process, as outlined in a memo to community partners sent out on Wednesday.
The authority will stop taking referrals for special rental assistance programs for veterans, young people exiting the foster care system, and families at risk of separation because of their lack of housing. It will also pause an initiative that allows people who live in homes where a subsidy is attached to take their voucher and move elsewhere after a year. (The housing authority does plan to keep moving new tenants into these subsidized units when they become vacant.)
That move struck Jess Horner, program director at John Graham Housing and Services in Addison County, as particularly alarming. John Graham has 18 of these subsidy-attached apartments, which they often rent to people who are “hard to house,” she said. The organization offers wraparound support to help these renters become successful, and then the tenants can take their housing subsidy and move elsewhere.
Cutting off their ability to move their voucher creates a bottleneck, Horner said.
“These units are going to be occupied by the folks who are in them now until voluntary exit, death, or eviction,” she said. “Which means that there aren’t any opportunities for other people to try their hand at an affordable unit.”
Some of the state housing authority’s cost-cutting measures mirror moves taken by the Burlington Housing Authority in January, after HUD first signaled a possible funding reduction. BHA acted proactively, suspending vouchers from some 70 households looking for housing and taking a staunch stance against allowing rule-breakers second chances.
Now, the Burlington Housing Authority — the state’s second largest, behind VSHA — is not making additional policy changes, according to executive director Steven Murray.
“I’m patting myself on the back, because we got a lot of heat for what we did,” Murray said.
Berk said she does not wish the state housing authority had taken action sooner. In the past, she has secured special funding from HUD to help fill shortfalls when voucher costs have increased unexpectedly – something she might pursue again, she said.
But given that the Trump administration has signaled its desire to essentially end the Section 8 program as it currently exists — cutting federal rental aid by about 40% and diverting that money to states to spend as they see fit — she isn’t sure she ought to trust the past.
“There are unprecedented times,” Berk said. “To what extent prior experience helps is questionable — but we’ll continue to fall back on that.”
