Real estate leads the way

Vermont Business Magazine, Jun 01, 2004 by Barna, Ed

In May, the National Association of Realtors reported that between 10 and 20 urban markets would be experiencing double-digit price inflation for residences, as historically low interest rates combined with a growing population and a recovering economy to create a seller's market.

The Rutland region is no exception: sales of real estate of all kinds are booming, with pressure from those seeking something more affordable in a rural location adding to the effects of Vermont's traditional scarcity of good non-farm, nonmountainous building sites.

One of the best indications that the Rutland area has rebounded comes from the way people and businesses are buying in. This is particularly true when large national or regional chains decide to build branch operations, a decision usually made after doing sophisticated market research.

The hope now is that Rutland County's attractions will also appeal to businesses that pay living wages. Under William McGrath, the Rutland Economic Development Corporation has begun a carefully targeted campaign to recruit new manufacturing concerns, following the loss of several important job providers in the past few years.

"I think that every type of property, whether residential, commercial, manufacturing space - everything is at a premium right now," said Betty Ann Martin at Ryan Realty in Rutland.

Home Is .... Where?

As for prices, "I think they're at an alltime high right now," Martin said. In the housing market, "it would have to be in pretty bad shape to be under $100,000."

Also, "there's a big jump from the lowest level to the next," which makes it hard for people to move steadily up the home-owning "ladder" as their careers bring improvements in their financial sitnations. That situation is reinforced by the way smaller builders gravitate to the higher-end projects, and then are unavailable to help complete more economical plans.

Lauren Hughes, principal broker at Century 21 Premiere Properties in Rutland, said things haven't reached the point of inventory being hard to come by, but the market has been "very strong" and looks to be again this year. While a starter home used to be in the $100-120,000 range, now that's jumped to $120160,000, she said.

There's "a tremendous amount" of out-of-state interest, Hughes said. It ranges from retirees to second home owners to people wanting to be close to their children to people seeking to telecommute. What they have in common, she said, is that the amount of equity in a 3,000-square-foot house in Massachusetts or on Long Island will buy a 6,000-12,000- square-foot house here.

Her agency has a rental management company with about 200 units, so Hughes knows it's hard finding good rental housing, too. A two to three-bedroom family apartment costs about $650 a month now, plus utilities.

Affordable housing. "There really is a need for it," Martin said. "There needs to be someone willing to do it."

John Ruggiero was willing last October to put 63 units of manufactured housing on 12 acres along Stratton Road, a much-used connector between Route 4 East and the Rutland Regional Medical Center. It would be middle-class senior housing, for those 55 and older, he said.

When the concept came before the Zoning Board of Adjustment, about 100 neighbors packed a three-hour meeting (a firefighter had to be called in because the number violated the building's fire code) to say that even if the plan met that age group's needs, it would increase traffic, decrease property values, pollute an already polluted brook nearby, and damage the character of the neighborhood.

By November, Ruggiero had had enough. He pulled the application, saying the permit process was tough enough without such neighborhood opposition.

Nonprofits have done what they could to create or maintain affordable housing:

* Rutland West Neighborhood Services has a long track record of helping people to maintain their residences, weather eviction crises, and do financial planning that leads to home ownership. Having expanded well beyond the towns close to Rutland City, they recently won a major grant through the town of Brandon to facilitate their work.

* The Bennington-Rutland Opportunity Council has a long record of helping with weatherization, an Issue of renewed importance with oil prices on the rise.

* The Rutland County Community Land Trust quietly owns and operates a variety of residential properties. For instance, Brandon agreed to apply for a Community Development Block Grant to do major repairs on an apartment house there. But the Land Trust's big effort recently has been to renovate the downtown Rutland Tuttle Block, for which they have received $1.3, million in tax credits from the Vermont Housing Finance Agency; $616,600 from the Vermont Community Development Program; and more than $1 million in other grants, appropriations, historic preservation tax credits, and miscellaneous funds.

As soon as the last tenant's new business space is ready for his move, work will begin to turn the century-old structure's upper stories into 13 apartments for individuals earning $22,000 a year or less, or couples earning $25,000 or less. There will also be room for a Land Trust headquarters office and for retail business on the ground floor. Meanwhile, owner Reiko Tuttle said the price paid for the run-down structure - $110,000 would be donated to the local College of St. Joseph.