Tuesday

On Tuesday, Gus Seelig (Executive Director, Vermont Housing and Conservation Board) spoke to the Senate Natural Resources Committee about their version of S.100.

He commented on the state’s failure to pass statewide land use planning back in the “Act 250 days.” Specifically, he pointed to the abundance of opportunities during the permitting process for folks to increase costs and raise objections that lead to a lack of affordable or lower market rate housing generally.

He pointed out that the Vermont Housing Conservation Board (VHCB) is the financing arm of the state’s housing development efforts and recanted some stories about a designated smartgrowth site in Putney adjacent to the food coop. The same person came forward and appealed at two different stages of the process. Both times they won the initial appeal against the objections, but now it is headed to the Vermont Supreme Court. The town of Putney was all on board, however the resulting delays will be 18 months by the time the appeals play out, and it will raise the per unit cost by an estimated 20% (originally expected to be $400,000).

Seelig gave additional scenarios of similar situations in Hyde Park and Hartford. He would like to see a Housing Appeals Board that can act more quickly (New Hampshire has something like this) than the court systems.

A recent VHFA study showed a post-Covid increase in market rates with an average price of $315K, which went up 15% last year alone. Newly constructed homes average even higher, at $555K. 

He finished with a personal anecdote about his daughter. “We are at a place where the market has just completely shifted,” he said. Working staff at hospitals, food services, etc. have no available cost-effective options. 

Radical market shifts may result in overall pressures on the countryside rather than concentrated in planned and densely populated areas. Although he doesn’t claim to be an Act 250 expert, he thinks raising of thresholds from 10 to 25 in downtown areas could be effective.

Chairman Bray asked if designated downtown areas lead to a sense of complacency about planning in other areas of a town. Seelig wasn’t sure but restated that they support designations as a tool to add value and lower cost. He commented generally that he has “seen Act 250 stop bad development. I haven’t always seen it add value when it is imposed.” 

Ultimately, he wants a faster permit appeals process whether it be local municipalities, the Agency of Natural Resources, the Department of Environmental Conservation, etc. “We need faster resolutions,” he said.

Some witnesses were delayed so Legislative Counsel began walking through draft amendment of the bill. The new draft increases density requirements for areas with water and sewer service.

Senator MacDonald asked how discharges would increase related to this change. Bray said they would flag that for expert testimony late. Senator McCormack explained they are merely allowing for “adequate sewerage” (not clear that’s actually what it does) and wondered if “some design requirement data” would make him see it differently.

There was a fair amount of discussion around re-introduced language that a group of 10 persons could form an appeal of a municipal zoning change. Legislative Counsel suggested they could narrow the language by defining the types of interests those persons must have in the proposed changes. Senator Watson agreed with that idea and suggested that they require a “common” interest (this way the group could not appeal if they all had separate individual impacts from the proposed changes).

Another significant change is to limit town’s ability to adopt energy codes that are stricter than the statewide ones. Currently the Public Service Department can allow these exceptions. Watson was asked to comment as she has some familiarity with towns that already have these stronger energy codes and some who wish to adopt them but are uncertain of their authority.

She asserted most municipalities are interested in energy sources and heating sources being regulated at the town level (some even have Energy Committees) and she believes they may be better dealing with these at another venue. Senator White agreed but wasn’t clear if they want to strike the draft language or they are in favor of it. The language was drafted by the Senate Economic Development Comment in response to developers asking they not allow a patchwork of energy codes across the state.

Bray and McCormack agree the Strike allows for some local choice not available now. Although, this “choice” requires a charter change which has to go through the legislature.

MacDonald questioned if this rule would only affect new construction or also rehabilitations of old buildings. Legislative Counsel believed the language would impact both. There was a back and forth between members of the committee but ultimately they decided to strike the requirement to have energy standards approved by the state if they are more strict.

White shared an amendment creating a 25-unit Act 250 trigger regardless of whether or not a project is within a designated area. Bray noted that he discussed this Legislative Counsel the previous day and the language currently in the draft amendment essentially does this.

McCormack asked a question about how the bill treats prime agricultural soils and he and MacDonald devolved into a lengthy debate over the topic. Josh Hanford (Commissioner, Department of Housing and Community Development) arrived and Bray asked him to respond to some of these questions. Hanford commented that the designation programs lessening demand for agricultural soil in designated areas because there is diminished farm activity. Bray agreed some municipalities are likely planning to lose some of these land parcels for designation purposes. MacDonald jumped in suggesting caution because of potential damages to agriculture. Legislative Counsel offered that municipalities will need to differentiate between permitting and designating (designation does not automatically permit all uses) and these statutes should be looked at as parallel paths.

Wednesday

The Committee came back to this topic on Wednesday. Many written comments have been submitted and the Committee did not have time to hear from all potential witnesses.

One of the sponsors of the companion house bill, Representative Campbell, reviewed the current statutes on Commercial Building Energy Codes (CBEs) and Residential Building Energy Codes (RBEs). Commercial codes have been in place since 1997 and RBE’s since 2007 but have had no central administration and hence not truly enforced. Building codes generally are enforceable by the Department of Public Safety, but energy codes to not fall under this jurisdiction.

Campbell quoted a past President of the Homebuilders Association who was anxious to have enforcement because he competes with builders who don’t follow them. Bray mentioned meeting with Chairman Stevens, who was encouraging them to move enforcement mechanisms forward, Bray agreed. White asked about previous study groups and Campbell said these went well and arrived at a recommendation to move towards registration, which he failed to explain. 

White stated that she wants money in this bill and, as a much as she likes the direction of provision, she would like it more with money. However, she wondered if this would disrupt the other bill (she didn’t specify which one) about energy codes. Campbell confirmed he thought having money here would possibly upset the trajectory of his bill. Bray indicated they may fold Campbell’s bill into S.100.

Jay Greene (Racial Equity Policy & Research Analyst, Office of Racial Equity) spoke next, saying they were generally supportive of all the items in the bill which directs policy towards racial justice. The also spoke about homeless programs as helping to provided equity protections – the bill protects hotels which provide housing assistance from being punished with zoning bylaws. Watson expressed enthusiasm for these items.

Xusana Davis (Director, Office of Racial Equity) gave a closing statement essentially saying Act 250 has been perpetually studied and tweaked since she has been in office. She wanted to remind the Committee of the big picture, that zoning and land use is something we should think deeper and longer about (she didn’t call it racist but was hinting that if we act without understanding the “broader context” it will perpetuate racism). They want to be certain when the upcoming report on land use comes out it is actually read and heard. Lots of volunteers have been involved wish to know they are heard.

Bray agreed that they would like to wait but there also an immediate need to attempt to mitigate the current housing crisis in the state. He went out of his way to point out the several provisions that sunset in the bill which will “allow them to revisit” these topics following the report.

She mentioned her irritation at the use of reports as a stalling tactic, a common practice in the Statehouse.

McCormack asked what if any sections here in the bill she would have them delete in anticipation of the report. She responded that she was not prepared to share that yet, but “the best people to answer that are going to be the most directly impacted communities.”

Miro Weinberger (Mayor of Burlington) had submitted written testimony, which the Committee reviewed. He argued against the delay in the enhanced designation program (the current draft pushes it out to 2025). He also wanted to limit appeals and expand eligible municipal codes and ordinances for these enhanced designations. Finally, he dedicated much of his testimony to urging the Committee to restore the 25-unit threshold for Act 250 jurisdiction. The current draft amendment lowers this limit to 10.

Bray added that the Mayor had a push for the broader concept of municipal administration if the municipality adopted a higher standard of regulations that Act 250. Bray believed they did not have the time for such a “complex proposal” and suggested that Weinberger may have better luck in the House.

Next, Legislative Counsel presented a new summary of the bill.

MacDonald asked why they aren’t using a percent of the population instead of the 10 or more persons threshold required to appeal municipal land use changes. White was opposed to pursuing that idea but wondered where “particularized interest” language used in the draft actual meant. Legislative Counsel admitted there is no definition but will look into it.

Building energy codes turned out to be contentious as MacDonald was critical that “we are compromising rapidly” due to “artificial deadlines.” He wants more time to consider these provisions. Bray pointed out that this is a process that currently exists but requires charter changes. Deleting the language here will remove the Department of Public Service process requirement and leave in place the need for referendum and charter change, which is cumbersome. White agrees and supports these provisions. She sees local energy committees as being able to do this well.

They moved on the 25-unit trigger for Act 250. MacDonald asked for an explanation of the sunset provision, questioning what would happen if someone obtained a permit during the effective period but construction didn’t happen. Legislative counsel couldn’t answer the question, but suggested a future legislature could make these abandoned permits perpetual.

MacDonald does not support any exemption but if the Committee supports the amendment with the sunset he will support it begrudgingly. McCormack and MacDonald opposed but were overruled by the other members of the Committee.

The Committee’s fifth instance of amendment was a new section which adds an enhanced village center designation and includes a new 50-unit trigger on priority housing projects located in enhanced village centers. This is a temporary provision that sunsets on July 1, 2026.

Consensus was generally established yesterday here. Watson noted many centers may not have the required water and sewer so perhaps the House can address these limitations further. McCormack and MacDonald opposed this provision, but were again overruled.

The final instance of amendment deleted the wastewater permit connection sections of the bill and inserted in their place language from H.332 which would create a summer study committee to study how to increase compliance with the building energy codes.

After a break, Legislative Counsel returned with v3.1 of the draft bill. After a brief walk-through a vote was called for. The vote was 4-1-0 in favor, with McCormack voting against.

Friday

The Senate Economic Development Committee reviewed the amendment to S.100 from the Senate Natural Resources Committee on Friday. The new draft makes several changes, including:

1. Raising the density requirement from 4 units per acre to at least 5 for zoned residential areas served by water and sewer infrastructure.
   
   
2. Restoring the ability for a group of 10 or more people to appeal municipal planning decisions. However, the new language adds the requirement that all ten have a “common injury” that is protected under statute.
   
   Several members of the Committee jumped on this, worrying that this doesn’t meaningfully change current law because individuals who can demonstrate injury already have standing. The Committee does not appear to be in favor of this language and will likely push back on it.
   
   
3. Removing a section that allows the Department of Public Service to approve the adoption of municipal building energy codes that are stricter than the state’s. Instead, these would require charter changes (which go through the legislature).
   
   Senator Brock and Senator Cummings pointed out that would possibly be counter to the Senate’s energy code goals. Other Senator’s agreed that, from the perspective of housing, it creates a negative incentive when adopted by municipalities. Brock added that the Committee eliminated that ability because their “goal was to increase the production of housing and to do so in an affordable way in the short term because of our critical needs… This allows towns to adopt more restrictive energy codes and will result in producing less of it (housing).”
   
   
4. Adding a new Act 250 trigger for developments of 25 units or more of housing in designated development areas. The amendment would also remove the cap on the number of priority housing units that are exempted from those districts. Both provision sunset on July 1, 2026.
   
   Senator Harrison inquired if this was “any type of housing.” Legislative Counsel confirmed that it was. Brock commented that takes three years to go through the local process so developers would just be getting in Act 250 about the time those provisions sunset.
   
   Cummings wondered where in Vermont we have any places inside these designated areas where 25 new units would even fit. She called the bill “the biggest power grab I have seen (taken) from the local Towns in a long time and I am pretty sure I am not going to vote for the housing bill.” She continued on to say that “no matter what their character is” we are going to force them to allow duplexes and other types of development without giving up any control up by the state and Act 250.
   
   Chairwoman Ram Hinsdale reflected on those comments and suggested there much to discuss and ponder over the weekend here. All the members nodded.

There are additional changes to the bill not discussed by the Committee on Friday. A full description can be found here.