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by Dave Soulia, on FYIVT.com
In 1970, Vermont introduced Act 250, a land-use law designed to manage development in an era when local zoning was limited. Its goal was to ensure that large-scale projects, like ski resorts, didn’t overwhelm small towns or damage Vermont’s rural character. However, over the decades, Act 250 has grown into a broad regulatory framework that has hindered development while providing questionable benefits to the state’s environment and residents.
Supporters of Act 250 often claim it is the reason Vermont’s natural beauty remains intact. Yet, states like New Hampshire, Maine, and upstate New York have retained their rural character without a law as far-reaching as Act 250. Vermont’s natural limitations—mountains, small towns, and a lack of urbanization—were likely sufficient to maintain its character without a law that added layers of bureaucracy. What Act 250 did succeed in doing was regulating and taxing development to such an extent that it has stifled Vermont’s economy and hollowed out its middle class.
The Missed Opportunity for Balance
The original intent of Act 250—to prevent large-scale projects from overwhelming small towns—could have been achieved through simpler, more targeted measures. For example:
- A billboard ban, like the one Vermont enacted in 1968, preserved the scenic character of the state without harming economic growth.
- Local zoning laws, which most towns now have, could have managed development effectively without the need for statewide oversight.
- Infrastructure-heavy developments, like ski resorts, could have been required to fund municipal upgrades through targeted taxes, ensuring small towns were not overburdened by external growth.
Instead, Act 250 created a system that added significant costs and delays to development across the board, disproportionately affecting industries like manufacturing and multi-residential housing. The result has been a decline in economic opportunities for Vermont’s middle class and a concentration of growth in specialized industries like healthcare and finance, which are less reliant on land-intensive development.
The Data Speaks: Act 250’s Unintended Consequences
Two charts illustrate Act 250’s impact. The first chart tracks total projects approved under Act 250 from 1970 to 2024, showing a peak in the late 1980s, followed by a sharp decline. That graph will seem eerily familiar to anyone who has lived in Vermont over the last fifty years. This decline coincides with increasing regulatory complexity and rising taxes, which pushed out industries that traditionally provided middle-class jobs, such as manufacturing and construction.
The second chart compares major housing applications and permits to non-residential development under Act 250. Non-residential projects have consistently outpaced housing, contributing to Vermont’s housing crisis. Developers, faced with Act 250’s high costs and delays, naturally gravitated toward more profitable commercial and industrial projects, leaving multi-residential housing underdeveloped and overpriced. Alarmingly, current housing permits are now below 1970s levels.
Meanwhile, Vermont’s Gross State Product (GSP) has grown modestly, driven largely by federal funding and sectors like healthcare, tourism, and state employment. This reliance on external funding and service-based industries has concentrated economic activity in urban hubs like Burlington, leaving rural areas economically stagnant.
A Law That Chose Winners and Losers
Act 250 has not preserved Vermont’s natural beauty any more than local zoning or targeted policies could have. What it has done is create a system that chooses winners and losers:
- Winners: Industries like healthcare, finance, and state employment that operate outside Act 250’s reach or require minimal land development.
- Losers: Manufacturing, industry, and multi-residential housing, which have been driven out by high costs, delays, and regulatory hurdles.
This imbalance has hollowed out Vermont’s middle class and left much of the state struggling to keep up economically. Without the types of jobs that manufacturing and housing development provide, many Vermonters are forced to rely on lower-paying service jobs or leave the state entirely.
Time for a New Path Forward
As Governor Scott and members of the state government have called for a focus on creating affordable housing and addressing Vermont’s economic challenges, one step toward achieving these goals would be repealing Act 250. By eliminating this outdated framework, Vermont could empower local governments to make decisions that reflect their communities’ needs while fostering growth across all sectors. This approach would encourage private-sector development, create middle-class jobs, and address the housing crisis—all without sacrificing Vermont’s natural beauty.
Act 250 was created for a Vermont that no longer exists. Today, it stands as an obstacle to economic opportunity and a more equitable future. Repealing Act 250 would allow Vermont to modernize its policies, support its residents, and build a more balanced economy. This article is the first in a series exploring the impacts of Act 250. Stay tuned as we examine the policies, numbers, and decisions shaping Vermont’s future.
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Categories: Business, Commentary, Housing, Legislation, State Government
Yea giant poop swimming pools that constantly flood millions of gallons of raw sewage into our swimming and fishing spots and smell up the town on hot days. Extra stresses on our electricity infrastructure. More tax money to expand the police state, spying, harassment, and worthless state employment. More wear and tear on our current infrastructure, needing non stop construction and noise interruption. Water systems poisoning us with chlorine, and Chinese toxic waste with benzine and aluminum contaminated sodium hydrofluorosolicic acid. Inner city DEI housing units that we have to pay millions of dollars for so they can sell drugs and never work, while bringing in vast amounts of crime that we need to pay for.
We don’t need Act 250 to prove legal homesteading precedent were we should be able to live a life of self sustaining self built homes at cost without public subsidy and unsustainable political expansion. If an individual wants to build a house, let them build a house. Maybe cut some red tape for individuals, but don’t let all the government cronies take over the system, steal our money to fund the startup costs, and completely change what Vermont is.
In the likely to come government “study”, find out how many homes are in disrepair because the government made things too expensive for normal people to be able to fix. The government created the problems, and now they are going to fix us reeeeal good.
Act 250 turned in to a mafia form of extortion of money from land owners and you do not have to be too smart as who made all the money.
Another home run by Dave Soulia. Keep writing about this, Dave, and keep it simple, just like this very understandable article..
Manufacturing businesses don’t come to Vermont for structural reasons. Our railroad freight system is ridiculously inadequate. We don’t have a native source of energy, and as a result, electricity is very expensive. The weather here makes road upkeep and maintenance expensive, and so taxes are high. The weather also makes heating costs here high. Our far-left toxic-empathy political climate make government, education, child-care, and healthcare spending exorbitant; which again increases labor costs and taxes. Bringing manufacturing to Vermont to any significant extent is totally delusional.
What unique resources does Vermont have? In business parlance – what is Vermont’s competitive advantage? It has been its clean environment and natural beauty. HAS BEEN is an accurate description because Vermonters have been destroying our bodies of water for decades.
So the last attractive resource we have left is our natural beauty. So those who want to dismantle Act 250 protections are actually working to destroy the last thing the green mountain state can boast about, can sell. The last thing we can be proud of. This makes no sense.
There are other ways we can open up more housing for middle class Vermonters. For instance – increase taxes on second homes, part-time residents, and new residents who don’t provide vocational skills that we need, such as building renovation & maintenance. And stop feeding the nanny state.
Can we get back to smart policymaking rather than knee-jerk lets-give-the-developers-whatever-they-want-even-if-it-shoots-me-in-the head?
While I appreciate your perspective, several points require deeper consideration or additional context.
Vermont did have a thriving manufacturing sector up until the mid-1980s. Manufacturing left not because of structural barriers like weather or rail but due to high taxes and overregulation, particularly the introduction of burdensome policies like Act 250. These policies made expansion prohibitively expensive and time-consuming, driving businesses to more business-friendly states.
Regarding Vermont’s rail system, it supported manufacturing and freight needs for decades. The real issue isn’t the infrastructure—it’s that policy decisions have made it less viable to run manufacturing businesses here. Similarly, Vermont had a reliable energy source in Vermont Yankee. Shutting it down without a replacement plan was a political choice, not a structural inevitability. The resulting energy costs are a direct consequence of policy, not geography.
While Vermont’s climate is challenging, this is true for all northern states. States like New Hampshire and Maine face similar weather but manage to maintain lower taxes and more robust economies. The difference lies in Vermont’s overreliance on taxes and regulatory burdens, not the weather.
Your critique of Vermont’s far-left political climate as contributing to high costs is valid, and this is precisely why repealing Act 250 and other excessive regulations would stimulate growth, attract businesses, and expand the tax base—reducing the need for Vermont’s exorbitant tax rates. Under the current regulatory and tax environment, bringing back manufacturing to Vermont may seem far-fetched. However, this isn’t an inherent limitation—it’s a policy failure. Vermont’s manufacturing base thrived before these policies were implemented, and it could again with the right reforms.
Vermont’s competitive advantage in the past was a combination of its location, workforce, and manufacturing capacity. These advantages still exist but are undermined by policies that discourage investment and development. Regarding Vermont’s natural beauty, water quality challenges are not unique, nor are they worse than many other states. This is an issue best addressed with targeted environmental policies, not broad, outdated regulations like Act 250.
Natural beauty is important, but much of Vermont’s land is privately owned. This beauty exists because property owners maintain and invest in their land—not because of Act 250. To assume Vermont’s scenery “belongs to everyone” diminishes the contributions of private landowners. Other rural states with comparable natural beauty—New Hampshire, Maine, upstate New York—have managed to balance preservation and growth without excessive regulations like Act 250. Reforming or repealing Act 250 doesn’t mean abandoning Vermont’s environmental stewardship—it means removing unnecessary barriers to growth while maintaining modern, targeted protections.
Increasing taxes is not the solution. Vermont’s housing crisis stems from a lack of supply, largely driven by regulatory barriers like Act 250. Adding taxes or restrictions won’t increase housing stock—it will only make Vermont less attractive to potential residents and investors. Based on Act 250 records, it’s clear that this policy has not been “smart” for Vermont’s economy. It has stifled development and failed to deliver on its intended environmental goals. Repealing it—along with other excessive regulations—would be the first step toward creating policies that promote both economic growth and environmental sustainability.
In summary, Vermont’s challenges aren’t rooted in its geography or natural limitations—they’re the result of policy choices. By reforming, or preferably repealing, Act 250 and reducing the regulatory and tax burdens, Vermont could restore its economic competitiveness while maintaining its natural beauty. Let’s focus on solutions that address the root issues, not symptoms.