Vermont Asks Builders to Copy Fairlee's Model—But a $500K Tax Bomb Says Otherwise
Beneath the story of Fairlee's $170K "miracle" units lies sweat equity, family loans, and a navigation of state and federal bureaucracy that, by the developer's own account, were nearly ruinous.
In the small Orange County town of Fairlee, developer Jonah Richard is building. In a state starved for housing, his work—over 50 new homes built or planned—has been held up as a model. According to a report by Connecticut Public Radio, produced in partnership with VTDigger and Vermont Public, state officials are “desperate to convince more people to follow his lead” and wish to “clone Jonah Richard.”
The story is compelling: a fourth-generation Fairlee native returns from a high-paying New York City consulting job to revive his hometown, where he “watched shops shutter and home prices rise.”
But for Vermonters trying to understand if this model can truly be replicated across the state’s 251 towns, a deeper look is required. The reality on the ground in Fairlee reveals that Richard’s success is the product of a unique set of personal skills, a sophisticated business structure, and a willingness to navigate a state and federal bureaucracy that is, by his own account, nearly ruinous.
His story is less a simple “how-to” guide and more a stark illustration of the fundamental paradox at the heart of Vermont’s housing crisis.
More Than a “Hometown Hero”
To understand the Fairlee projects, one must first understand the developer—and he is not a typical small-town builder.
According to his public testimony and other reports, Jonah Richard is an Ivy League-educated chemical engineer who spent years in management consulting with Accenture. It was during this time, according to Seven Days, that he began investing in duplexes in New Jersey, building capital and experience before returning to Vermont in 2020.
His operation is also far more complex than a single “small construction company.” Public records and project applications show a sophisticated, vertically integrated business model:
Village Ventures: This is his primary development firm, which manages property acquisition, permitting, and financing.
Réal Hazen Construction: A general contracting company he co-owns, which then serves as the builder for his projects. This structure gives him direct control over costs and timelines—a significant advantage most developers do not have.
Appleseed Development: For one of his largest projects, the 22-unit “Denison” on the former Colby Block site, Richard formed a separate partnership with three other individuals, likely to manage the $6.4 million project’s specific risks and capital needs, as reported by the Valley News.
This combination of a specialized financial and engineering background, pre-existing capital, and a complex corporate structure makes Richard a uniquely capable operator, far from the “hometown hero” archetype.
The Real Fairlee: A Village Transformed
The scale of the development in Fairlee is often misunderstood. News reports frequently cite the town’s population of “about 1,000 residents.”
This figure, however, refers to the entire 20-square-mile town of Fairlee. According to U.S. Census data, Richard’s work is concentrated in the small village center, a Census-Designated Place (CDP) that spans just 0.6 square miles and had a population of only 198 people in 2020.
This distinction is critical. Adding nearly 65 new housing units is not an incremental change; it is a demographic transformation that could increase the village’s housing stock and population by a third or more.
This transformation is happening, in part, because the town’s leadership was actively seeking it. According to the Connecticut Public Radio report, Fairlee’s municipal government had a pre-existing goal of adding 100 new housing units and had already “loosened its zoning rules in recent years” to encourage precisely this kind of infill development. Richard did not just arrive and start building; he stepped into a regulatory environment that his town had intentionally prepared.
The $170,000 Unit: A Costly Myth
Much of the excitement around the Fairlee model is based on a reported “astoundingly low” construction cost of “around $170,000 per unit” for his first 8-unit project at 501 Main Street.
However, this figure is a dangerous outlier for anyone trying to replicate his work. The developer himself has acknowledged that this initial project was aided by his own “sweat equity” and financing from “extended family.” Other reporting from Seven Days noted that project ran $200,000 over budget, costing about $1.4 million.
This is not a scalable benchmark. In reality, Vermont’s development costs are notoriously high, with subsidized affordable housing units often costing between $400,000 and $500,000 to build, according to Seven Days. In his own legislative testimony, Richard places his current efficient building cost between $250,000 and $350,000 per unit—a figure still far below the non-profit average, but nowhere near the $170,000 number that captured public attention.
For Vermonters, the lesson is that even an efficient, vertically integrated builder cannot escape the state’s high costs for labor and materials.
The Systemic Barrier: A $500,000 Tax Bill
The single most important “missing piece” from the simple success story is the systemic financial trap that nearly ended Richard’s work.
In written testimony to a Vermont House committee in January 2025, Richard detailed a “cautionary tale” that is far more than a simple “foible.” To make an affordable housing project work, he accepted $1 million in state and federal grants. Because he is a for-profit developer, this grant money was treated as income by the IRS and the state.
The result: he was “hit with a surprisingly huge tax bill” of $500,000.
This single event, he testified, “almost sent me into bankruptcy” and forced him to take out a 30-year loan just to pay the taxes on the grants he had received to build affordable housing.
This is not a problem unique to Jonah Richard. It is a direct consequence of the 2017 federal Tax Cuts and Jobs Act. It is the central, crippling barrier that makes the “Jonah Richard Model” nearly impossible to replicate. Any small builder or local entrepreneur who follows the state’s advice and applies for these grants could be met with a tax bill that instantly bankrupts them.
Vermont’s Two-Faced Housing Policy
This tax trap highlights a fundamental paradox: Vermont’s government is simultaneously pushing small-scale development with one hand while crushing it with the other.
The “Giving” Hand: State leaders and the Agency of Commerce and Community Development are actively promoting a “Homes for All” toolkit, for which Richard provided input. In 2023, Governor Phil Scott signed the HOME Act (S.100), a historic law that reforms zoning to allow duplexes, streamline permits, and reduce parking requirements—all designed to make small-scale infill projects easier.
The “Taking” Hand: At the very same time, the system’s financial rules create impossible hurdles:
The Tax Trap: As Richard’s testimony shows, the tax liability on grants makes public-private partnerships financially hazardous for the private partner.
Locked-Out Funding: In his testimony, Richard noted that crucial funding from bodies like the Vermont Housing & Conservation Board (VHCB) is often restricted to non-profits, even if a for-profit builder can build units for less.
The “Experience” Catch-22: The Low-Income Housing Tax Credit (LIHTC) is a critical tool for building affordable housing. According to Richard, the state’s 2025 rules were updated to require developers to have prior experience with the LIHTC program to be eligible. This, he testified, is a “huge blow to rural communities” because it locks out the very new, small-scale developers the state claims it wants to “clone.”
Conclusion: What Is the Real “Fairlee Model”?
Jonah Richard’s work in Fairlee is significant and necessary. But he is not a simple model to be “cloned.” He is a unique operator whose combination of elite education, professional experience, access to private capital, and high-risk tolerance allows him to survive a system that is fundamentally broken.
For Vermonters, the lesson from Fairlee is not to wait for more “hometown heroes” to save their towns. The lesson is that Vermont’s housing policy is deeply incoherent. The state is celebrating a developer for his success while simultaneously maintaining the very financial and administrative barriers that nearly bankrupted him.
If Vermont is serious about solving its rural housing crisis, it must stop focusing on “cloning” a single person. Instead, it must fix the systemic flaws he has exposed. The solution is not finding more Jonah Richards; it is fixing the tax code and funding rules so that any competent local builder in any Vermont town can have a chance to build.