Heather Koontz
With a shortage of options, increasing demand, and a median value higher than the national average, Vermont’s housing market is reaching a boiling point.
According to the Housing Vacancies and Homeownership annual statistics released by the United States Census Bureau, Vermont has consistently fallen well below the national average for available housing. The state tied with New Hampshire in terms of lowest available homes in 2025, only above Connecticut and Minnesota, and rental vacancy rates are even lower. In fact, Vermont is nearly leading the nation in lowest available rental units, right behind Maine.
The city of Montpelier is attempting to address a portion of this housing shortage with the substantial Country Club Road development project, but there are still challenges to overcome before the project is off the ground. To help prepare a solid foundation, the capital city may benefit from observing Vermont municipalities that have taken on projects of similar scale.
Northern Neighbor Leads by Example
One example of a town leaning into the need for housing and growth is the city of St. Albans in northern Vermont. With a 2024 population estimate of 7,031, the city is only slightly smaller in size to Montpelier and has a similar distribution of available housing.
In 2024, residents approved an $11.4 million bond to support upgrades to the city’s downtown area that would facilitate a new workforce housing unit behind city hall. With around 90 apartments, the project was proposed as affordable housing for residents who make between 80% and 120% of the median income. Paid for through tax increment financing, the plans also included parking solutions underneath and adjacent to the lot.
In 2025, the St. Albans City Council agreed to a deal that would bring an additional 87 workforce housing apartments to the former Fonda manufacturing site. Also in 2025, Reid Commons, a 33-unit development for adults aged 55 and older, officially opened. The affordable housing project was funded through a mix of federal, state and private dollars.
This push for housing was due, in part, to a report published by the Northwest Regional Planning Commission in March 2023. The report found that Grand Isle and Franklin counties — in which St. Albans is located — needed to add 3,350 new or improved housing units to meet the needs of current residents. This number did not account for the needs of incoming residents.
In addition, the report estimated that 7,600 households in those two counties alone have unmet housing needs and may be unhoused or living in poor conditions.
It Takes a Village to Build One
Despite the obvious need, access to affordable housing wasn’t the only factor that helped St. Albans spark growth. According to Denise Smith, executive director of the Vermont Council on Rural Vermont and longtime St. Albans resident, the process started decades ago and has taken the entire community to realize a better future.
“We were in a crisis moment as a community. The businesses were boarded up, the streetscape wasn’t looking good,” Smith said. “It was not a community that people were moving to.”
In a small city where impactful change often takes years, there are multiple factors that can stall growth — including a decline of investment in infrastructure. Smith said that limited budgets had led to crumbling streets, unsafe sidewalks and the departure of residents and retailers. To put the city back together, it was going to take more than local government.
“It took a real effort for the community to band together and work on what we wanted to change,” Smith said. “We reimagined what the future could look like and what we wanted our transformational story to be.”
Alongside her own small business, Smith said local business owners and elected officials partnered with the community to bring new energy to the city of St. Albans. New storefronts opened, a downtown committee was created, events brought people to the area, tax credits were utilized and economic development began.
“There was a vision and the right people in the right places to adopt and move that vision forward,” Smith said. “We knew what we didn’t want. We didn’t want a crumbling downtown with sidewalks no one cold walk on. We wanted something better for our community.”
Smith is proud of St. Albans’ success and believes similar transformations are possible with the right vision, strategy and resources. And perhaps, most importantly, with people who want Vermont to continue to thrive.
“This work requires people who want to see change and are committed to working on that change,” Smith said. “Bringing the community together is where magic starts to happen.”
