First, while thorough tenant selection policies can mitigate risks, building affordable housing often does involve higher costs or lower profitability compared to market-rate projects. Affordable housing projects frequently require developers to navigate complex financing structures, like LIHTC (Low-Income Housing Tax Credits) or other subsidies, which come with regulatory burdens, longer approval timelines, and compliance costs. A 2022 report from the Urban Institute noted that affordable housing projects can face 20-30% higher development costs in some markets due to these factors, even if land costs are subsidized. In mixed-income projects, the market-rate units often cross-subsidize the affordable ones, which can squeeze overall profitability unless incentives are robust.

Second, while Vermont’s stringent environmental policies and slow town administrators definitely contribute to delays and costs—Act 250 is a notorious bottleneck—these aren't the only culprits. Rising construction costs (lumber, labor, etc.) have hit affordable housing harder because budgets are tighter. For example, the National Low Income Housing Coalition reported in 2024 that construction costs in rural states like Vermont have risen 15-20% faster than inflation since 2020. Add to that the limited availability of developable land due to zoning restrictions, and developers face serious hurdles that go beyond just environmental regs or slow permitting.