Dorset Commons. VBM photo.
Vermont Business Magazine The Champlain Housing Trust announced today that it has acquired a 15-acre property with 105 apartments on Dorset Street in South Burlington. Dorset Commons, which was originally built in the late 1970s. It was sold by Catic Exchange.
“Across Chittenden County, rents continue to rise and vacancy rates remain very low,” said Michael Monte, Chief Operating and Financial Officer at the housing trust. “Purchasing these apartments preserves this stock of housing as affordable for the tenants who live there.”
Monte told VBM, "The idea is to stabilize rents in properties like these for workforce housing."
According to CHT, bank financing was provided by TD Bank, N.A. In order to keep the rents moderately affordable, financing was also provided by the State of Vermont Treasurer’s Office Local Investment Program, the Vermont Community Foundation, and the Sellers, with an equity grant provided by the Vermont Housing and Conservation Board.
Monte provided VBM with the following financial information via email:
- Primary Debt: TD Bank ($10,640,000, 5.05%, 34 year term, first year interest only)
- Second Debt: Treasurer, Vermont Community Foundation, Others ($1,875,000, 3.5% interest only)
- Equity: VHCB ($860,000)
"This is not necessarily the purchase price but our cost of ownership. Meaning it includes expenses, initial capital improvements, capitalized reserves, etc," he said.
A number of rental properties in this area, over the past several years, have been demolished and redeveloped, or seen rents rise beyond what people could afford, leading to displacement of tenants.
“While the increased construction in Chittenden County is, in general, a good thing, there continues to be a lack of housing for low and moderate income individuals and families. We felt it necessary to step in and save this property,” added Monte.
Properties such as the one acquired by the housing trust are sometimes referred to as “naturally occurring affordable housing” since there were no public funds invested in constructing the development or restrictions on rent or incomes of tenants. The average rent for a two-bedroom at the Dorset Street property is currently $1,200 – Fair Market Rent in the region is $1,442. The location is across from South Burlington Middle/High School and next to the city offices.
All the current tenants will have their leases honored and rent kept stable. New mangers and maintenance staff have been onsite to introduce themselves to the residents. As with all tenants of the housing trust, residents will automatically become members of the organization giving them access to free credit counseling and homebuyer education classes. Members also are invited to a summer picnic each year, and an annual meeting and awards dinner to elect the board of directors.
“All Vermonters deserve safe and affordable housing options,” said Vermont Treasurer Beth Pearce. “The Treasurer’s Office is committed to working with our partners, like Champlain Housing Trust, to identify capital gaps and leverage State dollars to fill the need and improve Vermonters’ quality of life.”
The Champlain Housing Trust has nearly 3,000 homes under its stewardship, including approximately 2,300 apartments. CHT serves the communities of Chittenden, Franklin and Grand Isle counties.
Source: Champlain Housing Trust 8.15.2018