Act 250 and Housing - Jan 10, 2024

On Wednesday, three different Committees took up housing and land use issues. The Senate focused on a new proposed Act 250 framework that would change the incentive structure and land access for housing. The House Committees covered some of this as well, but also heard from non-profits asking for more investments in permanently affordable rental housing. 

Senate Economic Development Committee

On Wednesday, Chairwoman Ram-Hinsdale introduced Sabina Haskell (Chair, Natural Resources Board) and Peter Gill (Executive Director, Natural Resources Board) to the Senate Economic Development Committee.

Haskell reviewed a presentation on the work done since Act 47 of 2023 (the ‘HOME Act’) around Act 250 modernization. The steering committee included the Natural Resources Board (NRB), State Commissioners, and other stakeholders. She opined that an ‘environmental justice’ criteria might be added to the current Act 250 oversight framework. Ram-Hinsdale agreed that the “cumulative impacts” of regulatory burdens should be equitably felt.

Senator Cummings noted that the “respect for local emotions” has been part of the problem because what got us here was a system where opposition (not in my back yard) has dictated the lack of housing.

The report suggested adopting a location-based jurisdiction framework using tiers of development intensity that tailor the “appropriate level” of Act 250 review based on the “characteristics of the area.”

Senator Clarkson hoped that this mapping of planned growth areas would lead to some “buy-in and investment with the community.” Haskell agrees a different attitude will be a big change and is expecting some with the incentives and proposals based on this jurisdiction framework.

Clarkson suggested a “band” around already designated Village Centers that can be incrementally expanded outward in 2-3 year increments. She noted that villages were generally built around rivers and need to be expanded out and up (for flood resiliency). There was some general agreement from Gill and Haskell about the basic idea that.

Senator Brock questioned if the 5% of the state’s land mass that these planned growth areas would cover was sufficient to “create the 40,000 units needed?” He worried that “these changes may not even carry the ball,” and they we be 2-3 years out before they even know.

Clarkson references third tier in the recommendations which identifies areas for development based on science instead of community input, which she believes might be a much larger than the other tiers. Ram-Hinsdale asked about “undeveloped lands” along Route 7, that now are being described as “turkey vulture habitat” under an Act 250 process. She wondered if these types of issues would be worked out under a Tier 3 designation.

NOTE: The implication RAM is making here that the science-based approach may not block development because of a habitats for non-endangered species.

She thought they needed to hear from an environmental justice expert about the impacts of the current system when a wealthy landowner has the means to appeal a permit using an environmental excuse like “rare bird” habitats.

Clarkson asked about funding NRB and Haskell acknowledged that ARPA funds Gills’ position (and 2 others) but that the funding runs out this year. The Legislature will need to backfill with state funds in order to keep the pre-application process going. She noted that they want these to be human staffed and not simply a web portal. This is an intimidating process and people want to speak with a person, she argued.

Senator Harrison chimed in that she would like to see fewer limitations on who can participate in a permit challenge. She also suggested the need for a placard at the property when an application is pending like with local Zoning permits.

Wrapping up, Gill reviewed recommendations around “Agricultural Soils Mitigation Ratio” which the board recommended be 1:1 for Forest Processing site permits rather that 2:1 or 3:1 like for other site permits. This is apparently a way to evaluate soil quality, presumably to make sure that development doesn’t occur on prime agricultural soils.

Ram-Hinsdale noted that there is a draft bill in front of the Committee to serve as a starting point. She would like the next iteration to include flood responsiveness and “friction” against environmental justice concerns.


House Environment & Energy Committee

On Wednesday, Chairwoman Sheldon introduced Catherine Dimitruk (Chair, Vermont Association of Planning & Development Agencies) along with Charlie Baker (Executive Director, Chittenden County Regional Planning Commission) to the House Environment & Energy Committee. They gave a presentation similar to what they provided in the Senate Committee earlier in the week.

Representative Patt asked about disagreements between local and regional authorities about the moves we took in 2023. The witnesses confirmed they would address that.

Sheldon asked about consistent land terminology in the future. They explained it was a tool for targeting future growth by acknowledgement of existing enterprise areas outside the designations. Mapping will be consistent with Act 171 (forest fragmentation) and Act 59 (conservation goals).

Baker noted at S.100 banned municipalities from decreasing the number of allowable housing units within a zoning district. This allowed some predictability and consistency and still does.

Representative Morris asked about how the Regional Planning Commissions (RPCs), who oversee Act 250 permitting, work with municipalities that disagree with them. It sounds like the Natural Resources Board (NRB) is the backstop to this process and can mediate disagreements.


House General and Housing Committee

On Wednesday, Chairman Stevens introduced Gus Seelig (Executive Director, Vermont Housing and Conservation Board) who presented to the House General & Housing Committee. He noted that they have 500 more proposed homes and two mobile home parks already proposed. They will not have enough funding from Act 81 (2023) to service these projects and are asking for another $20M in funding.

They would likely not spend those funds this fiscal year but sends the right signal to developers that the system is continuous and predictable. It is a policy decision to send this on behalf of Legislature and Governor to community developers.

He reviewed the conservation of the Burlington’s Northgate apartments via a $22M deal where they supplied some $3M and for 30 plus years it has been a great place to live. Preservation avoided the replacement cost of $160M estimated for that set of units.

Seelig mentioned a few examples where a private developer paid off his (subsidized) mortgage and then doubled rents; noting that this was a cause to appreciate the permanent “affordability” that is part of VHCB mission and rules. He added that “fiscal conservatives like [our program] because it recycles public funds.”

Seelig also mentioned a list of shelter housing they are now financing regularly. These include medical partnerships with independent living, transitional housing, and recovery housing have also been financed in recent years.

Representative LaBounty asked about the college buildings at Lyndon State. With building 3-4 “just sitting there” he wondered what could be done and whether opportunities like this were being reviewed. Seelig confirmed they were already in-progress on a Johnson State building and had spoken to the state colleges already about others. Some are compatible for housing, and some are less so.

There was some debate about the cost of infill housing, which the Administration pegs at $130K – $190K per unit. Seelig also advocates taller development with speedier permitting access for housing to push higher densities.

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