Act 250 Overhaul (S.311) - March 27, 2024

Gus Seelig (Executive Director, Vermont Housing and Conservation Board) was first to testify In the Senate Natural Resources on Wednesday Morning on S.311 after Chairman Bray gave some housekeeping remarks. The bill aims to overhaul the Act 250 land use system and install a tiered mapping system that makes it clear which land is available for development and which is not.

Seelig outlined the history of the Vermont Housing and Conservation Board (VHCB) and explained how they both protect the Working Landscape and pursue Smart Growth principles. Bray claimed that “VHCB is the largest developer in the state” but this rebuffed and Seelig who pointed to EverNorth and other partnerships that perhaps constitute a large segment of the overall development.

He reminded the Committee that he was “not here as a critic of Act 250 at all. You all know that the passage of the statewide land use plan failed, twice.” He added that Senator McDonald was heavily involved in the development of Act 100, which created a “bottom-up land use process” through “local and regional planning.” He followed this by stating that legislators need to “build upon that kind of bottom-up planning to provide the housing we need today.”

He also discussed the changes in the housing market, land use, real estate markets, labor rates, and materials inflation. Interest rates alone have more than doubled, going from 3% pre-pandemic to about 7% today.

Shortening the appeals process is one of the key things that would help with this, he believes. While this bill may not be his preferred mechanism, he still supports it. He mentioned the New Hampshire Housing Board of appeals.

The problem with how slow the system is now is that it acts as a deterrent against capital finance and the appropriate choice of smart growth sites. Finding a balance between growth and local planning so that every case is not a wholesale surprise to neighbors (stakeholders). He gave an example of a homeless shelter that was being sited across the street from an existing one and an appeal claimed that it would “change the nature of the area.”

Delays in permitting also result in cost impacts and affordability of the finished units.  He pointed to the average wage scales of a childcare workers and teachers, saying that the “market is producing housing at a rate that neither of these occupations can afford.”

NOTE: Teacher’s salaries actually exceed private sector wages as detailed in the 2021 CFV report on public sector wages. Public sector employees are in the top 25% of income earners in Vermont.

He also asked Legislators to increase the funding in the bill as he believes it is insufficient. While he gets that “times are tight,” he claimed that this is not an area to by “stingy” or they will set themselves up for disappointing and slow results responding to the need for rational housing prices and availability.

Senator McCormack reiterated is long-held stance that they need to “shorten the appeals does not lessen the rights of Vermonters.”

Senator MacDonald was curious about the Property Transfer Tax (PTT) being scaled up for higher value property to tax wealthy residences more heavily and raise revenues for housing. Seelig referenced the “other body’s proposals” (assuming he is referring to H.687 here). Bray chimed in asking if the PTT proposals are “more progressive” and aim to raise revenues? Seelig confirmed that they are doing both.

 

Chris Cochran (Director of Community Planning Revitalization, Department of Housing and Community Development) and Jacob Hemmerick (Community Planning & Policy Manager, Department of Housing and Community Development) were up next.

Hemmerick spoke extemporaneously about the nuances of zoning. “Local zoning really needed to modernize,” he concluded, saying that it was “stuck in the mid-20th century.” He mentioned a pilot project they had contracted with the Congress for the New Urbanism (CNU) to run in an attempt to modernize.

Cochran also mentioned a study regarding Land Banks, a complex policy area requiring more study but offers potential solutions for agriculture mitigation, village centers, and development density. He also sees the downtown and village tax credit program as fitting into this, in order to incentivize local action towards development.

He also had a number of other requests, including increasing the caps on the existing tax credit program and incentivizing flooding mitigation.

 

Sandrine Kibuey (Director - Housing Advocacy Programs, Champlain Valley Office of Economic Opportunity) spoke next, explaining CVOEO’s programming and mission. She advocated for expanding their Mobile Home technical assistance program and rental stabilization services.

Bray asked about recent work on a flood bill about her work and perspective on mobile home park resettlement issues.

Kibuey stated that “you cannot force people to move away from their home,” however you need to have is an answer to the question “where will you move them to?” Being able to offer alternatives and infrastructure improvements on-site is far better than restoring a bad situation without providing resiliency.

 

Next was Brian Shupe (Executive Director, Vermont Natural Resources Council) who launched into a recent history lesson to provide political context for their perspective.

He encouraged the Committee to step back from S.311 for a moment and praised them for approaching the Act 250 issues identified in 2019 in the Act 250 recommendations report from the Act 250 Commission.

He was excited about the prospect of “future land use mapping process [that is] consistent across the state.” Mapping and regional planning has been done but he lamented that these were not done a “structured” way that included a “regulatory component.”

Vermont Natural Resources Council (VNRC) has been one of the staunchest supporters of Act 250 over the years and were disappointed with several of the “reforms over the last 20 years, esp. with governance.” They apparently see this bill as a fix for that.

Shupe is a big fan on the new tiering, statewide mapping, Governance, and jurisdictional parameters in H.687 and will be looking to integrating much of these “meat and potatoes” issues into the final legislation. “We believe 687 is the approach the Committee should take… there are similarities (with S.311)… but we think 687 does a better job in several respects.”

Some of the differences he pointed to is that the House bill defines the tiers more clearly in legislation and less is left up to the Administration to determine. They also think that we think the “exemptions on 311 are not targeted, not necessarily Smart Growth and no protections against impacts on certain state resources.”

He clarified that they were supportive of putting temporary exemptions in place until the reforms are finalized, but just not the ones currently presented in S.311. Bray somewhat agreed with this.

He does agree with Cochran on some points, such as the zoning requirements in the HOME Act from last year need corrections (although he was not prepared to expand on this) and fully funding downtown tax credits.

 

Last up was Jon Groveman (Policy and Water Program Director, Vermont Natural Resources Council) who brought a marked-up copy of the bill. Many of his comments echoed Shupe, such as adopting the H.687 approach to mapping.

As an interim move, they would support exemptions for developments of up to 50 units on 10 or less acres within default map areas within Designated DTs and Village Centers, within ½ mile radius of DTs and ¼ mile of Village Centers. This would allow existing vetted areas to be used as governance tools. Legislators will “be surprised at the amount of land within that area,” he claimed. He added that these development spaces are substantial, permanent, and allow for immediate movement to develop while also likely dovetail with the coming Tier 1B exemptions in the new land use framework.

Bray asked for a brief explanation of Tiers 2 & 3 as they have primarily been discussing Tiers 1B. Groveman explained that it was consistent with the Act 250 Commission report except for the road rule provision.

Tier 3 lands are Critical Resource Areas that the state has an interest in protecting. Groveman noted that this was “a difficult debate in the House.” It was decided that this should include watersheds (messy and transient by nature), riparian areas, river corridors, habitat connectors until a formal rulemaking process could happen in 2027.

McCormack wondered what was so special about Tier 3 (above and beyond the existing Act 250 framework. “We have always given special protection to headwaters, habitats, altitude, road lengths, so what is the difference between Tier 3 and what is already in place today?” he questioned. This Tier 3 protection was supposed to be the trade-off for making Tier 1 land easier to develop on.

Groveman explained that the mapping will be more definitive than the altitude and other methods used for jurisdictional triggers today; he feels the 2500 feet is not definitive enough alone. In addition to that, more forest protections and critical habitat fall into the new Tier 3.


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