MONTPELIER, Vt. (WFFF) — Vermont is ending its pandemic-related emergency housing in hotels and motels for some of the homeless population because the program is not sustainable, hotel capacity is shrinking and it was never meant to be a permanent solution, said Human Services Secretary Mike Smith on Tuesday.

Roughly 700 people, or about a third of the homeless people put up in motels during the coronavirus pandemic, will no longer be eligible on July 1, officials estimate.

“This was possible because the public health and travel restrictions essentially closed Vermont tourism and hotels and motels stepped up,” Smith said during the governor’s weekly coronavirus briefing. The Federal Emergency Management Agency is reimbursing the state for the nearly $79 million cost of the program, he said. It was projected to rise to $108 million in fiscal year 2022 if changes weren’t made while federal reimbursement is uncertain, he said.

“Hotels and motels have been a valuable resource for Vermonters experiencing homelessness, but they were never intended to be a permanent solution,” Smith said. “Those living in hotels for an extended period of time experience isolation, and difficulty accessing services such as meals and mental health or substance use treatment,” he said, adding that local emergency services are strained responding to needs of the expanded program.

The Legislature asked the Human Services Agency to create a work group to come up with a transition plan, Smith said. The plan was accepted by the legislature and includes a more expansive program than before the pandemic — estimated to cost $41 million, compared to $6 million pre-pandemic, he said.

The new rules provide 84 days of emergency housing for families with children, households with a person who is disabled or over age 60, pregnant women, and households fleeing domestic or sexual violence, he said. Families with children and some disabled households will be able to stay longer.

Homeless service providers are working with households who will lose their hotel voucher eligibility to develop plans, and the state is giving out a $2,500 payment to each household, which also have access to up to $8,000 in housing funds per household, Smith said. Other state benefits are also available, he said.

“The goal is to transition households to other housing options, whether it’s permanent housing or other shared living arrangements,” he said.

The state is investing $120 million to build this housing while also encouraging shelters to reopen and expand, he said.

“We’re trying to make sure there’s a compassionate way that we move forward in a program that’s both sustainable and affordable, and is a transition period toward affordable housing,” said Sec. Mike Smith.

Smith says this won’t be a quick fix and recognizes the state’s housing crisis. The legislature plans to spend $250 million on affordable housing over the next three years, something the governor calls the largest investment in housing in Vermont’s history.

“If this is an emergency situation as we all perceive it, we need to pave a way for that to happen,” Gov. Scott said. “We’ll need to take some steps to allow developers to put some of the housing that we need into place.”