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Lawmakers look to limit drawn-out legal battles over new housing developments

Houses and a green lawn.
Charlotte Albright
Vermont Public File
The Safford Commons in Woodstock, Vt pictured in September 2015.

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

Nearly two years ago, the town of Putney approved a new affordable housing development on Alice Holway Drive. The project would bring 25 energy-efficient apartments to an area the town had earmarked for growth, and was designed to preserve some beloved community gardens and the local farmers market nearby. Local permit in hand, the developers had hoped to break ground before the end of 2022.

But a few weeks after the town gave the project the green light, a single neighbor across the street appealed the permit, said Kathy Beyer, senior vice president for real estate development at Evernorth, which is working on the Holway Drive project with the Windham and Windsor Housing Trust. Reporting from the time described residents’ concerns around losing green space and increased traffic.

It took 11 months for the state’s environmental court to resolve the appeal in the developers’ favor. Then the neighbor appealed that decision to the Vermont Supreme Court – which affirmed the lower court’s ruling last July. This past fall, the developers got a thumbs up from the state that the project wouldn’t need to undergo Act 250 review because of a long-standing carve-out for certain mixed-income housing projects. But then that decision got appealed, too.

Drawn-out appeals battles like this one are not uncommon in Vermont. Beyer harkened back to another affordable housing project in Woodstock that neighbors fought for over a decade, arguing the new homes would “mar the natural setting,” according to a 2015 Vermont Public Radio report.

In Putney, the ongoing, years-long saga has cost the developers an estimated $1.5 million in legal fees and construction costs that have ticked up with inflation, Beyer said. A for-profit developer might be able to pass that added cost along to the eventual renter. But an affordable housing developer can’t.

“We have to go out and ask to use more public resources,” Beyer said. “That’s a finite pool. So if we have to gather up more public resources to build 25 apartments in Putney – that means we’re going to build less apartments elsewhere.”

As Vermont faces an acute housing shortage, lawmakers and members of Gov. Phil Scott’s administration are eyeing a host of measures to clear the path for more residential development. Among the tools they’re considering: reforming how neighbors can challenge a project.

Currently, state law allows any 10 people in a municipality to launch an appeal against a project — or a single person “in the immediate neighborhood of a property,” like in the Putney case, who can show potential negative impacts in their personal interest.

“You could imagine a lot of scenarios where, if there’s low-income housing coming into a community, 10 folks from the other side of town who can’t even see it could get together and say, we want to band together to appeal this project,” said Alex Farrell, commissioner of the Department of Housing and Community Development.

An administration-backed omnibus housing bill in the House – and a complementary draft bill in the Senate – propose raising the threshold to 10% of a municipality’s population.

Last year, lawmakers approved a change that bars residents from appealing a zoning permit for an affordable housing project on the grounds that it affects “the character of the area.” This year, they’re considering measures that go a step further, precluding people from appealing residential projects that contain up to 25 units in areas served by municipal water and sewer infrastructure or ones located in state-designated development areas.

Legislators are also looking across state borders for other models to tackle appeals. Rep. Tom Stevens, D-Waterbury, has introduced a bill to create a new Housing Board of Appeals, modeled after a similar approach that New Hampshire has adopted in recent years.

The move would take municipal zoning appeals out of the court system, which Stevens said can be “slow moving because of the lack of capacity and the amount of backup that exists.” The bill would create a new body dedicated to handling local-level appeals, and would set a strict timeline: Hearings would need to be held 90 days after the board gets notice of an appeal, and the board would need to make a decision on it within 60 days afterward.

“Shortening the appeals process, in terms of time, would allow these projects to get built – and to not have to suffer through re-budgeting, re-financing, and all the things that have happened in the past when projects are delayed,” Stevens said.

More from Brave Little State: Vermont is changing. Should Act 250 change with it?

Lawmakers are also considering an “appeal bond,” patterned after a Massachusetts policy, which would require an appealing party to put up money to the state. If the appeal is denied, the permit applicant would get a chunk of the money to cover the costs associated with a project’s delay; if the appeal is found to be “frivolous,” they’d get a larger payout.

“This is really just to encourage folks from tossing in an appeal just because they’re unhappy,” Farrell said, adding that people who couldn’t afford to put up a bond would be able to ask for a waiver.

Both the House omnibus housing bill and the draft Senate version spell out timelines for decision-making on appeals at the municipal and state levels, taking into account the reality that many housing projects must get both local approval and state approval via Act 250. Both bills seek to exempt more housing development from the state’s land use law.

“The centerpiece of all of this is deduplication of Act 250 and other permits, so that you’re not experiencing double jeopardy, essentially – you’re not having the exact same argument multiple times with multiple timelines,” said Sen. Kesha Ram Hinsdale, D/P-Chittenden Southeast.

While some of these appeal reforms might curtail the ability of neighbors to express their opposition, proponents say they in fact uphold democratic values.

“We could have a vast majority of a community vote to support a project, and then it can still be appealed,” Ram Hinsdale said. “We have to figure out when to say enough is enough and democracy has been realized. People have had their say, and everything beyond that amounts to extortion.”

Have questions, comments or tips? Send us a message.

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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