S.100 now limits housing growth to 0.3% of Vermont

Editor’s note: in this April 18 letter from the Vermont House of Representatives Rural Caucus, the quad-partisan group of rural lawmakers urge House Speaker Jill Krowinski to raise the Act 150 review exemption to 25 units. S100, this year’s major housing bill, is being reviewed this week by House Environment and Energy, the committee with Act 250 jurisdiction.

The cost of housing is crushing Vermonters. As the leaders of the non-partisan rural caucus, representing Republicans, Democrats, Independents, and Progressives across Vermont, we are asking our legislative colleagues to come together and make necessary changes to how we regulate housing production in the  state so that we can create more housing for Vermonters.

Over 2,000 Vermonters are unhoused and thousands more spend over 30% of their income on rent. TheVermont Housing Finance Agency has identified the need for a whopping 40,000 additional housing units needed to meet current demand. We must build more housing in every corner of the state, including our small rural communities.

We’ve been underinvesting and overregulating the development of new housing for decades. And with total project costs up 30% since 2019, there’s little return for developers who might invest in the “missing middle” housing for middle-income households throughout the state. Vermont’s smaller, more rural towns face additional hurdles, including limited or no town water and wastewater infrastructure and limited capacity for  navigating permitting, zoning updates and funding opportunities.

While the Legislature can’t address all of the barriers that developers face, such as the cost of materials and availability of labor, there are things we can do. Over the last two years, we have come together and made historic investments of over $338 million in creating affordable housing and initiatives to house the most  vulnerable low-income Vermonters. We must continue that work.

We must also address the regulatory barriers that exist on the local and state level, including reducing the barriers to environmentally thoughtful development that have been caused by Act 250. Ironically, the regulation designed to protect Vermont’s environmental integrity against overdevelopment is also discouraging the kind of smart, environmentally responsible development we need, and adding to low density building and sprawl, especially in smaller towns where the housing crisis is most acute.

The Act 250 application process often takes more than six months, costs tens of thousand dollars upfront and often requires expert preparation and lengthy studies. This alone is enough to stop the development of rural housing projects. If the application is rejected, the time and money poured into the process is lost. If the permit is appealed, it could go to the Vermont Supreme Court—more time and money. If the project is approved, the permit may contain so many conditions that the project becomes impossible. For small communities with smaller-scale development plans, the risk just isn’t worth it. And so, no new housing is built.

Act 250 development triggers, like the 10-5-5 rule, which requires a developer to go through Act 250 review if they create 10 or more housing units in a 5-mile radius in a 5-year period, disincentivize the kind of housing solutions we need right now.

Having recently completed a nine-unit housing project in downtown Fairlee, for example, the same developer can’t so much as build a duplex in town within the next 5 years without triggering Act 250. In Bennington, another developer just brought seven units back up to code using funding from the new Vermont Housing Improvement Program, but decided against rehabbing another five units nearby because of the 10-5-5 rule.

The tragic irony of this is that smaller developments in village centers have minimal impact on Vermont’s landscape and character. Dense, compact development in these areas is just the kind of sustainable growth we want. 

The housing omnibus bill (S.100) passed last week by the Senate makes significant investments in housing programs, makes meaningful reforms to local zoning regulations, and reforms Act 250. We applaud the Senate for their good work.

That said, the bill, as passed by the Senate, only exempts designated downtowns, neighborhood development areas, and growth centers which limits the bill impact to 0.3% of the land in Vermont. This leaves out most of Vermont.

If we want to address regulatory barriers and create more housing for all of Vermont, S.100 should:

– Increase the 10-5-5 threshold to 25-5-5 for all designated areas, including village centers with permanent zoning and subdivision bylaws. 

– Exclude projects of 4 units or less from counting towards the 25-5-5 limit 

Legislators from all parties, businesses in all industries, and communities across the state agree that housing is what Vermont needs most right now. The shortage creates a cascade of interconnected challenges, like workforce and childcare shortages, that prevent Vermont communities from thriving. Increased remote work and concerns about climate change have made Vermont an increasingly desirable home base, so pressure continues to rise.

We call on the House to pass S.100 with regulatory reform for all designated areas including village centers.

Respectfully submitted,

Rep. Lisa Hango, Co-Chair

Rep. Laura Sibilia, Co-Chair

Rep. Katherine Sims, Co-Chair

Rep. Monique Priestley, Clerk

Rural Caucus Members

Rep. Ashley Bartley

Rep. Erin Brady

Rep. Michelle Bos-Lun

Rep. Lucy Boyden

Rep. Tesha Buss

Rep. Scott Campbell

Rep. Melanie Carpenter

Rep. Ela Chapin

Rep. Caleb Elder

Rep. James Gregoire

Rep. Bobby Farlice-Rubio

Rep. Jim Harrison

Rep. Larry Labor

Rep. Kate Lalley

Rep. Saudia LaMont

Rep. Josie Leavitt

Rep. Jed lipsky

Rep. Kate Logan

Rep. Logan Nicoll

Rep. Dan Noyes

Rep. Kelly Pajala

Rep. Henry Pearl

Rep. Tristan Roberts

Rep. Heather Surprenant

Rep. David Templeman

Rep. Dara Torre

Rep. Chris Taylor

Rep. Jonathan Williams

Rep. Terri L Williams