This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.
A key Senate committee has advanced a major bill that includes updates to Act 250 and a range of policies intended to encourage more housing development in Vermont. But hours before the vote, Gov. Phil Scott argued that the legislation does not go far enough to promote housing growth and signaled a potential veto.
Multiple bills aimed at modernizing Vermont’s half-century-old land use law have circulated around the Statehouse this year, drawing intense debate over how to protect Vermont’s natural resources in an era of climate change while also lowering barriers to more housing development.
Now, those bills have become one. On Wednesday afternoon, after a marathon of closely-watched hearings, the Senate Committee on Natural Resources and Energy effectively merged the two leading bills taking on Act 250 reform this year. The committee used H.687, a bill passed by the House last month, as its vehicle, adding housing policies from S.311, a bill advanced by the Senate Committee on Economic Development, Housing and General Affairs in February.
The hybrid bill, running nearly 200 pages long, must clear several more committees before it reaches a full vote in the Senate.
The natural resources committee forged ahead with merging the bills despite hints of a veto from Scott.
At a press conference Wednesday, the Republican governor called the House’s version of H.687 “a conservation bill,” arguing that it would expand Act 250’s reach and make it more difficult for municipalities to add housing stock, particularly in rural areas. (The bill’s proponents in the House contend that it strikes the right balance between promoting compact housing development and protecting Vermont’s ecosystems). Scott also argued that the Senate committee’s work on H.687 was “moving in the wrong direction.”
“It should be a surprise to no one that I will not accept any bill that makes it harder, slower, or more expensive to build housing,” he said.
Asked if he would veto the merged version of H.687, Scott said that would depend on the final version of the bill, and whether it incorporates all of S.311 and other changes suggested by his administration.
“But as it stands right now, from what I’ve seen, it would very likely reach a veto,” Scott said.
Rules for development in the next three years
Both H.687 and S.311 take as their basis a compromise hashed out last year between environmental groups and housing proponents. That compromise calls for chopping Vermont into a series of “tiers” that would dictate how development is treated under Act 250, loosening the law’s reach in some municipalities and strengthening its protections over “critical natural resources areas.”
That high-level trade-off left plenty of room for lawmakers’ interpretation, though.
One unresolved question has been how to set up interim exemptions from Act 250 to allow more housing development while the new “tier” system gets hammered out.
When it advanced H.687 in March, the House extended some narrow, interim exemptions to Act 250 passed in last year’s “HOME” law. S.311 envisioned much broader Act 250 exemptions over the next five years.
The Senate Natural Resources Committee took a middle path. It advanced interim exemptions until July 2027 for housing projects up to 75 units within a half-mile radius of some state-designated growth areas, as long as those areas are not in “mapped river corridors and floodplains.” It also allows up to 50 units of housing within a quarter-mile radius of designated village centers or along some transit corridors. The bill also maintains longstanding exemptions for some mixed-income housing projects in designated areas that have no unit caps in municipalities of over 10,000 people.
Proponents of those changes argue they can move the needle on housing production over the next few years.
“I think it is making good progress — it’s going in the right direction,” said Charlie Baker, executive director of the Chittenden County Regional Planning Commission, who helped craft the language around interim exemptions in the bill.
But members of Scott’s administration back the wider-ranging interim exemptions in S.311.
Sen. Kesha Ram Hinsdale, D/P-Chittenden Southeast, chair of the Senate Committee on Economic Development, Housing and General Affairs, had not yet seen the newly-merged bill on Wednesday afternoon. But, she said, “those interim exemptions are, I think, the place where we will be having the most back and forth” as the Senate finalizes its version of the bill.
More towns could qualify for projects that skip Act 250
The natural resources committee also made changes to how communities will secure Act 250 exemptions for housing in the long term: a hotly debated topic on the House floor last month.
So-called “Tier 1A” status would grant areas within some municipalities full exemption from Act 250 review — if cities and towns can show they can adequately review future development on their own. The Senate committee relaxed some of the requirements for municipalities to secure these top-tier benefits.
“I think it is much more inclusive than maybe what it was when it left the House,” Baker said, adding that he hopes somewhere between 20 to 50 municipalities could meet the revised Tier 1A criteria.
The committee also made “Tier 1B” benefits more accessible, Baker said. Regional planning commissions will map out these areas — intended to be roughly akin to existing “village centers,” as designated by the state — and there, housing development under 50 units on less than 10 acres will be exempt from Act 250 review. Municipalities would have to formally opt out of Tier 1B status if they do not want those exemptions.
“Almost all the towns in Vermont should be able to qualify, one way or the other,” Baker said.
The committee left the contours of Tiers 2 and 3 up to further deliberation.
“Tier 2” is expected to constitute most of the land in the state. 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, a measure intended to slow down forest fragmentation. The bill directs a report to flesh out the details of this tier.
In “Tier 3,” lawmakers intend to further protect “critical natural resources,” though H.687 leaves much of the decision-making around this tier up to a newly established Land Use Review Board. H.687 doesn’t specify where, exactly, these resource areas will be — they may include “river corridors, headwater streams” and “habitat connectors of statewide significance” — and instead directs the new board to establish a process for mapping out these places over the next few years, and to determine exactly how Act 250 jurisdiction would work there.
Treatment of Act 250 appeals, housing tax breaks
Along with setting in motion the new tier system, H.687 overhauls the current body that oversees the administration of Act 250 — the Natural Resources Board, made up of citizen volunteer members — and replaces it with a professionalized Land Use Review Board. This new board would take up appeals to Act 250 decisions instead of a judge.
This shift away from the courts was another point of contention in the House, and runs against the Scott administration’s recommendations. It also marks a departure from S.311, which sought to keep Act 250 appeals in the judicial system.
The natural resources committee opted to try and speed up appeals in the courts now while a longer transition to a new board takes place. Its version of H.687 would provide funding for an additional judge position in the court in the short-term, which S.311 had earmarked. Sen. Christopher Bray, D-Addison, chair of the committee, said the thinking there was to bolster the capacity of the current system to accelerate appeal timelines, while setting a longer-term course to shift appeals to a separate board.
The committee left much of the remainder of S.311 untouched. They left intact tax breaks favored by the Scott administration that are intended to encourage redevelopment of blighted properties, as well as appropriations for affordable housing programs. The committee left alone a measure that raises the threshold on how many neighbors can band together to appeal a new development on the local level, though removed language barring local appeals altogether for certain kinds of housing projects.
Overall, those involved in the compromise hashed out last year — from the Chamber of Commerce to the Vermont Natural Resources Council to regional planners — feel that bargain holds.
Jon Groveman, a lobbyist for the VNRC, said the bill accomplishes what it set out to do: to remove duplicative regulations on housing in some areas, and better protect natural resources threatened by climate change.
“I think the bill does both of those things,” Groveman said. “It’s very frustrating to continue to hear that there’s not enough for housing.”
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