Submitted by tim on Sun, 04/13/2025 - 16:02 DEW Construction plans to complete work on the new Burlington Technical Center at Burlington International Airport by late summer. Photo: DEW Construction. A mix of meticulous planning and expecting the unknown despite challenges of tariffs and workforce shortage by Olga Peters, Vermont Business Magazine Anyone who has tried to hire a tradesperson in Vermont knows two things: 1. From the sole proprietor to the three-person homebuilders, to the large multi-state companies, trades people are busy. 2. There’s not enough of them. The good news is that the industry closed out 2024 on a good note. This construction season is expected to be another good year providing the industry can acquire the materials it needs. Oh. Right. Tariffs. A major uncertainty that prompt professionals to add a “but” or “knock on wood” to many of their predictions. Contractors are keeping an eye on April 2 when the Trump Administration plans to enact 25 percent tariffs on goods from Canada and Mexico. “We’ve been working with multiple developers across the state, and it looks like it's going to be another good year,” Richard J. Wobby, Jr. Wobby serves as the executive Vice President, director of safety training and member services for the Vermont chapter of the Associated General Contractors (AGC/VT). “Owners are still sending out projects to the marketplace, so there's still a lot of activity and opportunity for everybody,” said Matthew Wheaton, executive Vice President, principal with DEW Construction. “Our outlook looks great for ’25, knock on wood.” TJ Kingsbury had a slightly different take highlighting the ongoing challenges of increased materials costs. “I'll tell you how Vermont's going. It's pretty anemic right now,” he said. “There's not a lot of work out to bid.” Kingsbury Companies is a heavy civil construction company and handles a lot of public infrastructure work such as water and wastewater. The company is making substantial wastewater upgrade at the Swanton wastewater treatment plant, and a force main in Colchester, which is part of a larger sewer project. In 2025, the company picked up projects in New Hampshire and New York State. Several of his responses to RFPs, however, have been over the owners’ budgets. For Kingsbury the issue seems to be owner’s budgets have yet to catch up with the reality of higher costs of inflation, materials, and the pandemic wage bump. Joshua Reap, president and CEO of Associated Builders and Contractors of New Hampshire and Vermont (ABC NH/VT), said one of the industry’s strengths, however, is adapting to change. “There's some uncertainty when it comes to material sourcing, in relation to the tariffs that the federal government is imposing on certain goods that are coming in from Canada and Mexico,” Reap said. “You know, our industry is fairly resilient. We'll adapt.” Wobby is determined to keep a cool head about the future. Borrowing trouble goes against a contractor’s ethos. “If we react to any of it, we're bringing drama to the conversation, and contractors generally don't bring drama to a conversation,” Wobby said. “They plan for the future and see what we can do to best supply our developers or our contracts along the way.” Wobby explained that every construction project mixes careful planning with unknowns. Contractors develop plans whether they’re digging in a field or renovating a house, he continued. When the project starts, professionals have a detailed understanding of what’s under the ground or inside the walls. But, until the digging starts or the sheet rock is pulled away, nothing is certain. Creating a Plan B (And C, D, and Even E) in Preparation for Tariffs For Vermont-based contractors, tariffs on supplies coming from Canada were the biggest concern. Wobby said AGC’s members are proceeding as if the building season will be busy. Many communities and the state are still working through their ARPA and IIJA ( Infrastructure Investment and Jobs Act) funded projects. Several transportation projects are still funded, he added. “We're working with the government agencies here in state and trying to get a clear pathway as to what they're going to expect over the next 12 to 18 months and moving forward,” he said. Tariffs, federal funding freezes, and other uncertainties aside, Wobby said the industry appears to be “on the better side of growth.” At the end of the day, local contractors are more concerned with “finding work and delivering that work ethically and competitively and profitably for the communities in which we live and work,” Reap said. DEW aims for a diverse project portfolio. Right now it includes a couple court houses, a brewery, a few medical projects, and approximately 600 units of multi-family housing projects across three states. The company has won bids on projects in Massachusetts, Maine, Vermont, and New Hampshire, Wheaton said. Photo: Rendering of new brewery and pub being built in Manchester. Photo: BMA Architects & Planners. Wheaton said when dealing with the unpredictable, backup plans are critical. Tariff-related worries have led to conversations about how to protect clients and yourself, Wheaton said. Contract language around “what if” has become even more important. “We just are very unsure of how it'll play out over time,” Wheaton said. “We're hopeful that it's all manageable, but it's still very new.” In seminars Wheaton has attended, his takeaway is that adapting to potential tariffs is less about avoiding the higher costs than about preparation and managing risk with project partners. Given the focus on housing nationwide, Wheaton hoped that the federal government might remove tariffs on “products necessary to continue the housing push and not penalize that industry which they're trying to support or develop or grow.” He is encouraged by the fact that despite the uncertainty, few owners have cancelled their projects. This leads him to believe the market will adjust. Items will be modified or purchased locally. One way the industry is considering dealing with potential tariffs is to add a contingency into their contracts. While a necessary measure, it can mean more expensive projects. Michael Monte, chief executive officer, Champlain Housing Trust said, “We’re concerned about tariffs and the impact tariffs will have on costs and how developers and builders are all looking to create a contingency, which is fairly high.” The plan hasn’t always worked for contractors either. Dave Dancosse, president of All Seasons Construction Corp. based in Springfield, said the industry had finally reached a new baseline after the pandemic years. Now, tariffs. “We don't know what that looks like yet, but we do expect that it's going to wreak havoc with the cost of materials, which is something the industry really doesn't need and the consumer certainly doesn't need,” Dancosse said. Dancosse said he’s formulating a tariffs response plan. He’s been asked if he’ll pre-buy materials but his company lacks the space to store them. At pre-bid meetings architects are asking companies if they’ll offer contingencies. Dancosse plans to address material costs as they arise. There’s enough work that he’s willing to take the risk of losing work. He remembers agreeing to contingencies during the pandemic. “Nobody knew what it was going to do to the supply chain and the costs of the goods, but it crushed us,” he said. “One project, I had fierce negotiations with the contractor and with the architect, and finally had to settle on if the materials went up 20 percent or more, we could get reimbursed for it. Under that [percentage] we had to eat it and that was a big hit on that job.” When it comes to the executive orders and funding freezes coming from the Trump Administration, the Champlain Housing Trust is on alert. “We're holding steady, but I can imagine others or not,” Monte said. So far, the tax credit programs the housing trust accesses appear stable. The trust has seen the loss of some EPA programs, a few energy programs, and congressionally directed funding that was removed from the latest budget deal. “So there was a whole bunch of resources that were coming through the state to different locations, and those funds were lost. So we're starting to see some impact at this point,” Monte said. Some funding sources have disappeared overnight. It messes with developers’ desire for certainty, he added. The Champlain Housing Trust and their project partner Evernorth have several housing projects at various stages. Under construction is a 94-unit project in Shelburne. When completed the Bay Ridge project will include a mix of homeownership and rental housing. Photo: Bay Ridge Apartments under construction in Shelburne. Photo: DEW Construction Construction has just started on the Post Apartments, on the site of the Howard Plant VFW Post 782, in downtown Burlington. Close to completion is the 10th Calvary Apartments, Colchester. In partnership with Evernorth, this project is a historic adaptive reuse of three dorms purchased from St. Michael’s College and part of the Fort Ethan Allen Historic District. A 70-unit project called Cambrian Rise is a neighborhood in the pre-development stages. Monte said as long as the tax credits hold out and the state provides the necessary resources, the housing trust will continue to build housing in Chittenden and Franklin Counties. Wobby is also watching new federal regulations that could limit access to materials, add extra retrofitting costs, or shorten the work day based on temperatures. For example, he anticipates new mining regulations will impede the overall ability to mine product needed for concrete or ready mix, or needed for asphalt or pavement. OSHA has enacted higher air standards that require air monitoring within confined spaces such as manholes. There is also a new PPE fit rule — personal protective equipment — in place that will require outfitting workers with new equipment. Finally there are new rules around heat and cold stress. The Vermont Legislature is considering a more stringent version of the rule, Wobby added. Kingsbury, and advocate for renewable energy, takes a positive view of the tariffs. If the tariffs raise the price of energy originating in Canada, he hopes the situation will spur Vermont to “wake up and provide homegrown renewable energy.” Workforce Issues Have Stabilized But No Victory Yet On the positive side, many contractors have semi-stabilized their workforce despite the industry’s overall shortage, Wobby said. Although, he stressed “semi-stabilized” was far from a victory. Instead of taking on an array of projects, contractors have focused on focusing on a niche and aligning projects with the existing workforce’s skills. “As we look at expansion or further growing our companies, that's where we're hitting that workforce cliff,” Wobby said. Last year, AGC/VT spent considerable time building relationships between contractors and Vermont’s Career Technical and Education centers (CTEs). Wobby said those relationships paved the way for CTE students to enter internships and mentorships with members. Some interns extended their placements into the fall as work study jobs, he added. “Those relationships and those pathways allowed our contractors to better utilize some of the assets within their communities to backfill and to fill in some of the gaps they were experiencing based on previous years,” Wobby said. AGC/VT’s training center in Montpelier has provided more trainings year-to-date than it has in prior years. “We are on the edge of a record training season right now,” Wobby said. “Between the contractors, the plumbers, the electricians, the fuel dealers, this place is hopping.” He continued, “So people are gearing up and getting their workforce trained in any new methods of production and as you see that happening, you see the way the season is going to go.” This spring ABC/NH&VT opened the Vermont Construction Academy, a 10,000-square-foot training facility in Winooski (see sidebar). All Seasons is booked through the fall. Anchor projects for the upcoming season include a state-funded renovation project in Windham County, a building for the town of Brattleboro’s Recreation and Parks Department, and 2,400-square-foot house in western Vermont. The company just hired three laborers. “Unfortunately, I think it took this labor crisis and everything we've been going through to make people aware that they needed to change,” Dancosse said. “And so we pay everybody more than we ever paid them, and the benefits are tremendous, and I think that's probably why we've been able to keep the guys that we have.” AW Clark Builders is a third generation company based in the Mad River Valley. The three-person team focuses on residential and light commercial projects. Last year, the company celebrated 70 years in business. Allen Clark, Jr started the company in 1954. Grandson Brooks Clark said the company has enough work for the next couple of years. The company has maintained a backlog of projects since the early days of the COVID pandemic, Clark said. The biggest hamper to growth is workforce. The company intentionally keeps its team small, Clark explained, so the most it would take on is one or two people. That said, the area lacks qualified workers, so even if the company wanted to expand, it is hamstrung by a lack of workers. AW Clark serves areas with a high population of vacation homes. So far, these projects have not been impacted by the higher building costs. Because the company works mostly with vacation homeowners, Clark said the state’s housing shortage typically doesn’t factor into their projects. Except, he adds, in the realm of workforce. The density of the second home market does impact workers’ ability to buy a primary residence in the local area, he said. Wheaton said advancements in technology have helped companies bypass a shrinking labor pool. In DEW’s case, the company is buying pre-assembled components. The company has also adjusted project schedules to account for less workers. Owners seem to understand that their projects will take longer as a result. DEW conducts outreach to attract new workers, too. Along with job fairs and working with the state’s CTEs, the company also visits elementary schools with the hope of capturing students’ interest at a young age. Kingsbury said, “Not much has changed and this always loops back to housing in Vermont and it continues to be a problem, and affordability of housing in Vermont continues to be a problem.” Kingsbury’s in-house internship program continues to funnel new workers into the company. This year a recent intern joined Kingsbury as a full-time project engineer. Six students enrolled in the company’s new on-site, state-certified apprenticeship program. The company has added baseline competency training. “We're getting a lot of outside of industry interests — you know, dishwashers, you name it — some of these folks have come in that really have no understanding at all of what we do and how we do it,” Kingsbury said. Last season three workers completed programing through ABC NH/VT and have moved into foreman roles. Another two students are enrolled in ABC NH/VT’s FLiC program (Future Leaders in Construction). Housing and Regulation Updates When evaluating the housing landscape, the Champlain Housing Trust’s big question is: How will this effect affordability? “In order for us to do well as a nonprofit housing development for permanent affordably housing, we need equity sources and grant sources in order to reduce the cost of the development,” Monte said. CHT’s recent development in Shelburne had 17 different sources of funding, Monte noted. Housing is considered affordable when it costs 30 percent or less of a household’s income. In order to charge rents considered affordable, housing trusts try to keep building costs as low as feasibly possible while balancing against the expenses of operating and maintaining properties. “Even if we started where everything was free in terms of the cost of development, construction, the cost of operating and maintaining, things between insurance and taxes, utilities and maintenance and capital improvements and snow removal and all of those things still means that rents need to be somewhat up there enough to pay for those things,” Monte said. That said, for most people to afford CHT’s rents, they need to be working or receive a direct rent subsidy. Housing trusts and private developers are the same from a development perspective and face many of the same hurdles such as higher material costs and the regulatory environment, Monte said. Where they differ is in funding sources. Nonprofit housing trusts often access federal or state tax credits or different forms of philanthropy. Banks tend to be private developers’ first stop. “Like all developers, we want a clear path, and it's not always that easy for us,” Monte said. “We need to put together a wide variety of resources in order for us to make anything affordable.” Housing Commissioner Alex Farrell said data shows Vermont’s housing stock is moving in the right direction. Farrell oversees the state Department of Housing and Community Development. Consulting firm IBIS World notes that in 2024, the number of building permits issued in Vermont totaled 2,646, which represented a 12.1 percent growth rate between 2019 and 2024. Farrell said normally it takes decades to change a housing market. He is fascinated by the speed at which housing projects are happening around the state. He credits the uptick in projects to recent regulatory changes to local zoning – allowing for more duplexes and ADUs – and Act 250. “What's astonishing is we have seen evidence of projects that scaled up because all of a sudden, regulations enabled them to or they saw that they could stay under an Act 250 trigger even with a higher unit count,” Farrell said. “So that's been really exciting to see people adjusting in real time and scaling up housing.” Positive news aside, Farrell said reversing Vermont’s housing shortage still faces headwinds: national trade policy, Vermont’s construction industry never fully recovering from the Great Recession, and a smaller than ideal workforce. “If we wanted to build 7,000 units this year, we couldn't, necessarily, because we don't have the people,” Farrell said. “But what's exciting about what we're seeing in terms of projects scaling up is that folks are doing it.” In his mind, the regulatory changes Farrell feels spurred the most change were kicked off by the HOME Act of 2023. The act contained a provision to increase density by allowing parcels on municipal water and wastewater to have at least five units per acre. Another provision allows for the creation of duplexes wherever local zoning allows single-family homes. “So the HOME Act is really a pretty exciting bill, because it kicked this effort off in a spirit of unity,” Farrell said. In Act 181, Farrell points to the interim Act 250 exemptions for downtown village centers, neighborhood development areas and the like that allow for increased unit limits from 24 to 74. “It's pretty, pretty amazing. Because we always tell folks, remember, construction projects take three to five years from planning to groundbreaking. The fact that we had folks deciding to scale up that quickly is really astonishing,” Farrell said. Still, contractors feel hampered by the permitting process. Reap pointed to Act 250 as the industry’s biggest barrier to developing the amount housing the state needs. He praised the Legislature and Governor Scott for reforming Act 250. For the reforms to really show results, however, he said the exemptions need to be extended for a couple more years to ensure new projects have a chance to go from planning to shovel-ready. Wobby described Vermont’s housing shortage as “pushing a wet rope uphill.” Vermont must pull multiple leavers, such as permit reform and materials market stabilization to rapidly reverse the shortage. “We cannot address the housing situation without some sort of permit reform,” Wobby said. “We need to be able to build multiple houses, multiple family dwellings, on plots of land.” The cost of building, especially materials right now, is one of the factors that make housing expensive, he added. The other factor is the state’s tight market. Housing prices will keep increasing until enough excess housing exists to cause prices to drop. “This is going to sound stupid as hell, but as long as people buy houses, people are going to increase the market rate of houses until we can build a glut of houses,” he said. Wobby has followed a housing project in Milton that he believes took seven years to move through the development and permitting state. AGC/VT helped find funding for a wastewater treatment facility in Montgomery so the community could expand housing. However, now that the permits are ready, a few residents are holding up the project, he said. Kingsbury is developing a few small housing “passion projects.” A 14-unit development in Waitsfield, four units in Middlesex, and 10 units in Waterbury are in the permitting phase. Most of the housing is duplexes geared toward workforce housing. “I gotta tell you, it's just one roadblock block after another,” Kingsbury said. “I read these articles about how we're going to pull back some requirements of Act 250 and make it easier. Well, none of that's working, none of it's happening.” He said the 14-unit project (seven duplexes) is already $100,000 into the permits and engineering. Regulations in New York and New Hampshire tend to be as abundant as Vermont’s but more user friendly and black-and-white, he said. Farrell concedes that more changes are needed. “Then on top of that, even if you get all your permits, Vermont has such a lopsided appeal system that the risk of either a neighbor or someone who's not even a neighbor, appealing your project is wide open here in Vermont,” Farrell said. “If you're a developer, the things you're thinking about are cost, time and risk, and you know, all of those are increased by our appeal system.” Farrell said that Governor Scott proposed this year several “nuanced and tactical reforms” to the appeal system as well as other permits such as wetlands. This legislative session, the House’s proposed housing bill also modifies the appeal system. Farrell feels that when developers ask to make permitting easier, what they’re really asking for is to make the process more predictable. “I think there's just a lot of room for us to make sure that developers feel that there's some predictability.” Farrell said. Infrastructure Farrell explained the state uses state dollars to leverage the federal tax credits and grants it receives for housing. In contrast to the pandemic years when Vermont experienced an influx of federal dollars, this year, the governor and Legislature are cautious given the Trump Administration’s freeze of some funding and enacting trade tariffs. “The frank reality is, Chittenden County is the one place where housing comes the closest to penciling out,” Farrell said. “By that, I mean the thing is going to appraise at or above what it cost you to build. But it's even close in Chittenden County and in the rest of the state there's still just a big gap there.” This means a lot of housing projects don’t make economic sense and may require public funding to fill in the gaps. For the state it must keep its investments strategic. Ferrell said the state will focus more on infrastructure investments. The federal funding it receives from HUD has traditionally been used as direct investments into housing projects. But, the state also knows investing in infrastructure, such as wastewater, up front can reduce the cost of housing projects and stretch HUD dollars. The state will receive approximately $70 million in disaster recovery funding related to the 2023 floods, he said. However, Vermont communities have approximately $400 million in need. “It's great, it's a windfall in a way, but it's in response to us suffering that much,” Farrell said. “So it really doesn't actually even cover what we suffered from these floods and the needed infrastructure upgrades and housing reinvestments to support more flood resilient housing and to replace the housing we lost.” According to Farrell, 80 percent of the funding is mandated for Washington County and the town of Johnson. The remainder can be spent in other communities impacted by the 2023 floods. Ultimately it will mean a lot of hard discussions, he said. To maintain its sanity, Vermont needs to decide which issues are under its control. Tariffs? No. State-level regulations? Yes. Wobby said the same is true for the construction industry. “You've got 101 other issues inside these companies that the companies can control and can work with and can find the answers to that will help us build for a great season,” Wobby said. “These one or two half a dozen issues that we have no control over? We'll figure them out when we get there.” Olga Peters is a freelance writer from Southern Vermont. To support vital journalism, access our archives and get unique features like our award-winning profiles, Book of Lists & Business-to-Business Directory, subscribe HERE!
