Standing on a verdant slice of hillside near downtown Montpelier, real estate developer Gabe Lajeunesse sketched out with his hands where he'd like to build 61 homes. Lajeunesse, managing director of Aacred Development, envisions a tidy neighborhood of mid-priced single-family homes and fourplexes on 20 acres of the 72-acre forest he and his partners own between two busy roads. The site sits high above the flood-prone downtown and is easy driving distance to grocery stores, retail shopping and the Central Vermont Medical Center. This location, Lajeunesse said, makes the wooded spot a perfect place for some much-needed housing. But construction costs are so high that the developers say they cannot build moderately priced homes unless Montpelier residents are willing to invest, as well. City officials are considering asking taxpayers whether the city should borrow about $2 million to supply water, sewer, roads, sidewalks, lights and stormwater drainage, all of which would lower the cost of developing the site. "Unless you want us to build $850,000 homes, which is not what we set out to do, we need to work on something together," Lajeunesse said. He and his partners would like to build houses that sell for $350,000, he added. Vermont has been hit hard by the nationwide shortage of affordable homes. Escalating home prices (up 38 percent between 2019 and 2023) have pushed people to leave the state, blocked others from moving in to take jobs and contributed to record levels of homelessness. Very little mid-priced housing is being built, despite the efforts of state lawmakers to create incentives and ease development restrictions. Now, more and more towns like Montpelier are looking for ways to address a crisis that has left the state needing 24,000 to 36,000 new homes by 2029. Some as small as Montgomery, just south of the Canadian border, are investing public money in community wastewater systems to make it less expensive for developers to build. In June, Waitsfield voters approved a $15 million bond to improve the town's wastewater system to encourage more housing. Other communities are considering making town-owned land available for housing. In the southern Vermont ski town of Dorset, where nearly half of all dwellings serve as second homes, that means planning an engineering study to see whether the land it owns would be suitable for a compact subdivision. Dorset Town Manager Rob Gaiotti said the reasons for taking that step are…