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House passes Act 250 overhaul, while Gov. Phil Scott says it misses the mark

A building with green siding and brick exterior
Carly Berlin
VTDigger and Vermont Public
Zephyr Place, an affordable housing development in Williston run by Champlain Housing Trust, on Oct. 23, 2023.

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

A bill that would make major changes to Act 250, Vermont’s half-century-old land-use law, is headed to the Senate after it survived a marathon debate on the House floor this week.

The sprawling bill, H.687, would relax Act 250’s reach in some municipalities, allowing new development to proceed without triggering review under the state law. It also would direct a process for mapping out new “critical natural resource” areas, or places deemed so ecologically sensitive that putting a shovel in the ground would trigger Act 250. The bill would overhaul the current body that oversees the administration of Act 250, replacing it with a professionalized board that would take up appeals to Act 250 decisions instead of a judge.

Following a series of 10 amendments, the House voted 89-51 Wednesday night to advance the bill. It passed third reading Thursday evening.

The bill is one of several in play this legislative session taking on the signature law that has governed and guided development in Vermont since 1970, and it is the first to pass either chamber.

Lawmakers are considering legislation that would encourage housing development in town centers where there is already water and sewer. This new apartment building in Morrisville will include below-market-rate rentals.
Tedra Meyer
Vermont Public
A new apartment building in Morrisville, pictured under construction in 2023, will include below-market-rate rentals.

Critics of Act 250 have long argued that the landmark law stymies new housing construction by adding cost and time to the development process, at times duplicating reviews that happen at the local level. Proponents of H.687 argue it would strike the right balance between promoting compact housing development and protecting Vermont’s ecosystems.

“No bill can solve every land use issue in and of itself,” said Rep. Seth Bongartz, D-Manchester, one of the bill’s co-sponsors, on the House floor on Wednesday. “This bill doesn’t solve the housing crisis, but just like the regulatory relief bills we’ve passed over the course of the last couple years in particular, it will make a real difference.”

“This bill doesn’t solve the housing crisis, but just like the regulatory relief bills we’ve passed over the course of the last couple years in particular, it will make a real difference.”
Rep. Seth Bongartz, D-Manchester

Detractors of H.687 — Gov. Phil Scott chief among them — contend it introduces new bureaucratic hurdles to building housing, and would be particularly detrimental to housing growth in rural areas. They also point out that the Act 250 exemptions in the bill would not kick in for several years, “doing nothing to address the housing shortage we are facing today,” Scott said in a statement earlier this week.

“The system is not failing. Act 250 is doing exactly what it was enacted to do: slow growth in our state. However, it is failing the need of our people,” said Rep. Ashley Bartley, R-Fairfax, when explaining why she voted no.

H.687 proposes chopping Vermont into a series of “tiers” that would dictate how development is treated under Act 250.

Municipalities could apply for “Tier 1A” status that would grant areas full exemption from Act 250 review – if the cities and towns can show they meet requirements like zoning bylaws, water and sewer capacity that can accommodate more development, wildlife habitat planning rules, and adequate capacity to review development locally.

In “Tier 1B” areas — which would need to meet a shorter list of qualifications, and would be mapped by Regional Planning Commissions — housing projects with 50 units or fewer on 10 acres or less would bypass Act 250 review.

“Tier 2” would constitute the majority of the state, according to the bill’s authors. There, Act 250 jurisdiction would remain mostly the same as now, except for a newly established road rule: Act 250 review would kick in for private road construction over 800 feet. The bill directs a report to flesh out the details of this tier.

A green sign with yellow lettering reads "State of Vermont Agency of Natural Resources, Act 250"
April McCullum
Vermont Public
The Act 250 District 4 office is based in Essex Junction and helps review development projects under Vermont's land-use law.

In “Tier 3,” jurisdiction under Act 250 would become automatic, meaning any new development would trigger review under the law. H.687 doesn’t specify where, exactly, the “critical natural resources” of this tier would be — they may include “river corridors, headwaters streams” or “habitat connectors with Statewide significance” — and instead directs a newly-established Environmental Review Board to establish a process for mapping out these places.

Much of the hours-long debate on the House floor on Wednesday centered around how much of Vermont would ultimately fall into each tier — and how easy or difficult it might be for smaller towns to earn exemptions for new housing.

“I'm sitting here, you know, and I’m thinking about my real small towns,” said Rep. Joseph Andriano, D-Orwell. “When I think about a bill that would make it extraordinarily difficult for many of my towns that I represent to grow — and to meet the challenges that we face as a state right now — I just can’t do it.”

“Tier 1A” status is likely only accessible for municipalities with robust zoning and development review already – like those in Chittenden County. But “Tier 1B” status is meant to be a much lower, more achievable threshold, Bongartz said.

“We bent over backwards to make sure that 1B status is attainable for a lot of towns,” he said.

Several lawmakers cited claims that the vast majority of Vermont — 97% — would fall under “Tier 3,” effectively blocking areas from any new development. Their point echoed comments by Scott earlier this session: In early February, the governor produced a map of Vermont at a press conference, mostly shaded red to indicate where H.687 would make future development off-limits.

But Bongartz deemed the argument as misinformation. The bill does not go as far as to define what “Tier 3” would constitute in detail, and only a small portion of the state would likely fall into that category, he said.

A landscape with mountains, a field and a fence
Amy Kolb Noyes
Vermont Public File
A field in Jeffersonville in 2016. A provision of H.687 would make Act 250 review automatic for any new development in areas with "critical natural resources."

Lawmakers worked through a long list of amendments to the bill before reaching a vote. They narrowly passed several additional carve-outs for housing construction: conversions of hotels and motels into permanently affordable housing would not need to alter an existing Act 250 permit, nor would conversions of commercial buildings into apartments, if they include 29 units or fewer. A new provision to allow “accessory on-farm businesses” to bypass Act 250 also passed. A major amendment to keep appeals under Act 250 in the court system failed.

The bill will likely head to the Senate Committee on Natural Resources and Energy, which is already workshopping other Act 250 bills that originated in the upper chamber.

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Updated: March 29, 2024 at 11:28 AM EDT
This article was updated March 29 to reflect the bill passing the House.
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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