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Tri-partisan group of lawmakers joins Phil Scott to pitch sweeping housing proposal

Gov. Phil Scott talks into a microphone at a podium. He is surrounded by a group of legislators.
Natalie Williams
Gov. Phil Scott talks about Vermont's housing crisis while surrounded by a tri-partisan group of legislators and other advocates at the Statehouse on Wednesday, Jan. 10, 2024.

This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.

Gov. Phil Scott and a tri-partisan group of lawmakers on Wednesday pitched a sweeping housing proposal that they hope will ease regulatory barriers and hasten the pace of housing development across Vermont.

“Right now, due in part to our antiquated regulatory system, it takes far too long and costs far too much to build,” Scott said at a press conference in his Statehouse office, surrounded by a broad coalition of legislators and administration officials.

The bill, H.719, tackles everything from permit reform to tax policy to funding for housing programs. Primarily, though, it takes aim at Act 250, Vermont’s half-century-old land-use law.

For years, critics of the law have argued that it throws cold water on housing development and contributes to Vermont’s acute housing shortage. A crop of studies completed ahead of this year’s legislative session have stirred up fresh debate over the law — and a flurry of new bills looking to modernize it — as the session gets underway.

H.719 would exempt all housing development in “designated centers” — and a half-mile buffer around them — from Act 250 review. The move is intended to allow for more housing development in areas where municipalities have already decided they want to see growth through existing state designation incentive programs.

The half-mile radius expansion is intended to allow for more development slightly outside of existing downtowns and village centers, where much of 2023’s historic flooding was concentrated, according to Alex Farrell, commissioner of the Department of Housing and Community Development.

Beyond those fairly small areas, the bill calls for raising the threshold of a contentious Act 250 policy: the 10-5-5 rule. Currently, when a single developer wants to construct at least 10 new units of housing within a five-mile radius in a five-year time frame, Act 250 kicks in. The bill would change the unit cap to 30 in areas “feasibly served by water and sewer infrastructure,” eliminate the mileage metric, and lower the time trigger from five years to two. (The Legislature tackled some of these approaches on a time-limited basis last year, but H.719 would make them permanent.)

“The idea is: Let’s stop pushing development out into sprawl and let it concentrate,” Farrell said in an interview.

The bill also proposes a process by which a municipality could have a chance to bypass Act 250 altogether if it already has robust local zoning in place, an idea Chittenden County leaders pushed for last year.

“Year after year, our city leadership has asked for municipal delegation and to withdraw themselves from this duplicative process with the Act 250,” said Rep. Taylor Small, a Progressive/Democrat from Winooski. “And now, I finally see a path forward with this tri-partisan effort to make that come to fruition.”

The bill also takes on the appeal process for proposed development at both the local and state level, placing time limits on how long a project can remain under review and raising the threshold for the number of people who can launch an appeal. It also calls for the creation of an “appeal bond” process where those seeking an appeal would have to put up money.

Some housing developers have said they avoid housing projects that would be subject to Act 250 review because of the risk they could get appealed at the last stage in the process.

“Do we really want communities where just a couple of folks can say, ‘No, we don’t like the types of folks that might come into this neighborhood’?” Farrell said. “That’s not appropriate. We need to raise the bar and change how people approach appealing a housing project.”

The bill also includes tax breaks that Farrell said are intended to encourage redevelopment of blighted properties into mixed-income housing.

“It’s just an extra incentive for folks to invest in these structures that — it might not otherwise pencil out to turn it into housing, but now it can,” he said.

The bill also includes regulatory changes to encourage the conversion of hotels and motels into affordable housing, a move state human services officials have suggested could provide longer-term solutions to Vermont’s motel program for unhoused people.

While the bill includes some additional funding for housing programs, such as the Vermont Rental Housing Improvement Program, it’s something of a departure from legislation over the last few years that funneled millions of dollars — largely from federal pandemic relief coffers — into affordable housing.

“We’re thrilled by the momentum behind this bill and hope to see it coupled with investments in affordable housing and services when the budget comes out,” said Chris Donnelly, a spokesperson and lobbyist for Champlain Housing Trust.

Despite the bill’s tri-partisan support, the Legislature’s Democratic leaders declined to immediately weigh in on the measure. Conor Kennedy, chief of staff to House Speaker Jill Krowinski, a Democrat from Burlington, did not provide comment. Senate President Pro Tempore Phil Baruth, a Democrat/Progressive from Chittenden County, referred comment to Sen. Kesha Ram Hinsdale, a Democrat/Progressive from Chittenden County, chair of the Senate Committee on Economic Development, Housing and General Affairs.

Ram Hinsdale said her committee is working on complementary legislation and would be meeting with members of the House, as well as administration officials, later this week.

Maura Collins, executive director of the Vermont Housing Finance Agency, said it’s notable that a wide array of lawmakers have joined hands with the administration to push this housing proposal.

“I’m just very optimistic coming into the session right now,” she said. Last year, Collins said, lawmakers took a big step forward with the HOME Act, which primarily focused on local zoning reforms to allow for greater density.

“Now, it feels like there’s another leap coming,” Collins said. “And it’s needed. Because the needs of housing Vermont’s workforce are only getting bigger every day.”

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Carly covers housing and infrastructure for Vermont Public and VTDigger and is a corps member with the national journalism nonprofit Report for America.
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