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With veto override, Act 250 reform bill becomes law

People seating in a row of desks look sideways at a man standing to speak in the foreground
Glenn Russell
Rep. Amy Sheldon, D-Middlebury, center, listens as Rep. Seth Bongartz, D-Manchester, left, urges the House of Representatives to override Gov. Phil Scott's veto of an Act 250 bill during a veto override session at the Statehouse in Montpelier on Monday, June 17, 2024.

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

Lawmakers have overridden Gov. Phil Scott’s veto of a marquee housing and land-use bill that makes broad reforms to Act 250, Vermont’s signature development review law.

That means H.687, a bill that seeks to balance promoting housing growth and environmental conservation, will now become law.

“We kept our eye on the twin goals of environmental integrity and the immediate short and long term needs of the people we serve,” Rep. Seth Bongartz, D-Manchester, one of the bill’s authors, told colleagues on the House floor ahead of the vote on Monday morning.

In the House, 107 lawmakers voted to override the veto, while 38 voted against it. In the Senate, the override received 21 “yes” votes and eight “no” votes. Overrides require a two-thirds majority in each chamber.

For years, state leaders tried and failed to find a path forward to update Act 250, a law that has governed development in Vermont for over half a century. Proponents for housing growth have long argued that the regulation adds time, cost and risk to the development process, throwing cold water on Vermont’s efforts to encourage more housing construction. Meanwhile, some environmentalists have reasoned that Act 250 could do more to protect sensitive habitats as the climate changes.

H.687 represents a compromise between those interests. It will relax Act 250’s reach in existing development centers, a move proponents hope will clear red tape and encourage compact housing development amid an acute housing shortage. It also lays the groundwork for extending Act 250’s protections in areas deemed ecologically sensitive.

Scott has long beaten the drum on deregulation, arguing that loosening Act 250 will help boost more housing growth. But throughout the 2024 legislative season, the Republican governor repeatedly criticized lawmakers’ latest attempt to overhaul the land-use law, claiming that H.687 places more emphasis on conservation than on promoting more housing, particularly in rural parts of Vermont.

That disapproval reached a fever pitch late last week, when Scott vetoed the bill. “Despite almost universal consensus, I don’t believe we’ve done nearly enough to address Vermont’s housing affordability crisis,” Scott wrote in a letter to lawmakers explaining his decision.

In a statement on Monday, Scott lambasted lawmakers’ override of his veto, writing that legislators “have failed to meet the moment on housing.”

“They have passed an expansion of Act 250 that will make it harder, and in some cases impossible, to build and restore homes and grow businesses in smaller, rural communities, pushing them even further behind.”

A woman stands to speak into a microphone and holds a piece of paper
Glenn Russell
House Minority Leader Rep. Patricia McCoy, R-Poultney, urges the House of Representatives to sustain Gov. Phil Scott's veto of an Act 250 bill during a veto override session at the Statehouse in Montpelier on Monday, June 17, 2024.

Republican lawmakers repeated many of Scott’s concerns on Monday, arguing that certain aspects of H.687 — like a new “road rule,” which will trigger Act 250 review for larger-scale private road construction, a measure meant to deter forest fragmentation — constitute an expansion of Act 250’s reach and will hinder building.

But Democratic backers of the bill countered that characterization, arguing that H.687 in fact makes significant Act 250 rollbacks for the first time in the law’s history.

“For the first time since its passage, we now recommend relinquishing jurisdiction for the purposes of building housing in areas that meet certain conditions,” Bongartz said. He noted that local planning and zoning rules have evolved considerably since the state-level review law was passed in 1970, as a response to rapid development in Vermont.

“Act 250 has been a significant part of shaping the Vermont we know and love today,” said Senate President Pro Tempore Phil Baruth, D/P-Chittenden Central, in a written statement. “However, Vermont’s chronic housing shortage has made it abundantly clear that this fifty year old land use law must be reimagined in order to identify necessary reforms to promote housing development while also protecting Vermont’s natural resources.”

H.687 sets in motion a process to chop Vermont into a series of “tiers” that will dictate how development is treated under Act 250, easing the law’s reach in some already-developed areas and strengthening its protections over sensitive ecosystems. That’s a fundamental shift in how Act 250 works now: Broadly speaking, projects trigger review under the law based on how big they are, rather than where they’re located, whether that’s in the middle of a city or on a country road.

The actual boundaries of the new Act 250 tiers will be hashed out in a years-long mapping and rulemaking process. In the meantime, the bill sets up a number of interim exemptions from Act 250, including one for all housing projects within the state’s 24 designated downtown areas until January 2027, and for projects of up to 50 units around dozens of village centers around the state.

Both economic development boosters and advocates for protecting Vermont’s environment – who worked together to hash out a compromise last summer that shaped debate over Act 250 this legislative session – lauded the bill’s final passage on Monday.

Megan Sullivan, a lobbyist for the Vermont Chamber of Commerce, applauded the exemptions for housing. Not having to get an Act 250 permit will remove costs for developers, she said. And, developers won’t need to worry about an Act 250 appeal killing a project.

“Knowing that that’s off the table to be able to do development in neighborhoods, is hopefully going to remove some of the risk and get people excited to develop new housing in Vermont,” she said.

Brian Shupe, a lobbyist for the Vermont Natural Resources Council, celebrated the creation of a new, professionalized board that will oversee the administration of Act 250 going forward, along with measures to address the fragmentation of forest and agricultural land in Vermont’s countryside.

Getting major Act 250 reform passed has been long overdue, he said.

“The Legislature has been struggling with this for at least a decade,” Shupe said. “And they got it over the finish line.”

The sprawling bill carries far more than just Act 250 changes. It also includes broad reforms to the state’s designation incentives program, a new tax on second-home buyers, funding for eviction prevention programs, flood disclosure requirements for home sellers and landlords, and more.

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Corrected: June 18, 2024 at 3:58 PM EDT
An earlier version of this story misstated when housing exemptions to Act 250 will expire.

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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