Workforce Housing

The Senate Natural Resources and Energy Committee combined the Senate’s housing bill with the House’s Act 250 modernization bill, creating a 171-page omnibus bill. While much of the legislation incorporates a historic compromise on Act 250, a substantial poison pill remains. Appeals of Act 250 permits would move from the environmental courts to a newly established professional board. The Vermont Chamber is advocating against this transition. A legal appeal of a complicated development process requires a legal review in a court, not an informal review by a politically appointed quasi-judicial board that does not have legal expertise.

The Vermont Chamber has supported a compromise of establishing a working group to dig into underlying issues that result in Act 250 appeals leading to timely and expensive disputes and ultimately development delays and how best to address them. The Senate Economic Development, Housing, and General Affairs Committee has done a walk-through of the bill and is looking at opportunities to bolster parts of the bill that will address Vermont’s housing crisis. With only weeks remaining in the session, the bill still has several more hoops to jump through before reaching the Governor’s desk. As it currently stands, it is poised for a veto.

H.687 was the subject of lengthy, and at times fiery, House floor sessions this week. The bill establishes a plan and timeline to modernize Act 250 with a tiered and location-based jurisdiction, including exemptions in smart growth areas. The proposed changes for Vermont land use would take place over the coming years to allow for considerable public outreach and input. In total, there were 11 amendments to the bill with all but one passing. This included an amendment to extend Act 250 housing exemptions passed last year in the HOME Act. The bill was ultimately passed by the House on a split voice vote, sending a message to the Senate that further changes will need to be made if the bill is to garner enough widespread support to withstand a potential veto.

The bill will now go to the Senate, where the Natural Resources Committee has been reviewing S.311, the Senate’s housing and Act 250 omnibus bill, in anticipation of receiving H.687. The Vermont Chamber testified before the committee this week in favor of the approach to Act 250 appeals that S.311 makes, keeping appeals to Act 250 decisions in the court with increased support. The committee is likely to make H.687 the final vessel for Act 250 modernization this session.

In response to stakeholder concerns on the version of the House Act 250 modernization bill that was voted out of the committee last week, the House Energy and Environment Committee has taken up an amendment to that bill. It will include important provisions related to the timeline of how Act 250 changes are implemented and is based on the significant package of compromises made by stakeholders before the session in the Necessary Updates to Act 250 report. Changes in the timeline ensure that the growth and protection provisions move in concert with each other, as agreed upon by stakeholders. The Vermont Chamber remains concerned about language that would transfer the responsibility of hearing Act 250 appeals from the environmental court to the new Environmental Review Board.

Meanwhile, the Senate Natural Resources Committee took up the “Be Home” bill, S.311, this week which was passed out of the Senate Economic Development, Housing, and General Affairs Committee with changes to Act 250, local zoning, and housing programs. Builders and developers testified regarding regulatory hurdles and housing market dynamics. They emphasized the importance of regulatory clarity and streamlined processes to expedite housing construction while ensuring compliance with environmental standards. Bill sponsor Senator Kesha Ram Hinsdale also testified, reiterating the need for evaluation of Act 250’s efficacy. In particular, she emphasized the need to incentivize development projects that cater to various income brackets, creating more diverse housing options, from affordable rentals to multigenerational housing.

When the House Act 250 bill makes it to the Senate, pulling them together will be a focus of the Senate Natural Resources Committee for much of the remainder of this legislative session. The Vermont Chamber will be engaged and at the table to ensure businesses are represented in this process.

The House Energy and Environment Committee has spent much of the first half of this session working on an Act 250 modernization bill. As passed out of committee this week on an 8-3-0 vote, it incorporates some of the provisions within the Necessary Updates to Act 250 report. Unfortunately, it does not yet include other important provisions from the significant package of compromises made by stakeholders before the session. These compromises were based on exemptions in smart growth areas, which are implemented alongside protections. When it is presented on the floor, Rural Caucus members have indicated that they plan to propose amendments. After passing through the House, the bill will be considered by the Senate Natural Resources and Energy Committee, along with the Senate’s version of a housing and Act 250 bill. The five Senators on this committee have the responsibility to implement changes that more effectively balance the efforts invested in this historic compromise.

While there is no single solution to Vermont’s housing crisis, modernizing land use regulations is a crucial step to encourage housing development and meet workforce needs across all income levels. The version of H.687 that the House Environment and Energy Committee approved introduces a vital framework for a tiered, location-based approach to Act 250. However, the current criteria for a smart growth area to qualify for Tier One status are too stringent, likely limiting the number of communities that can receive the exemption benefits.

Additionally, the proposed “road rule” as a new jurisdictional trigger would come into effect years before any area exemptions are approved. This timing means the road rule’s broad application could pose immediate challenges to large-scale housing development in our downtowns, villages, and neighborhood development areas. Implementing this trigger before the Tier One exemptions undermines the compromise agreed upon by stakeholders, and would add additional trigger in places where there has been broad consensus that expedited growth is necessary.

Furthermore, the bill proposes the establishment of an environmental board to decide on appeals to Act 250 decisions, shifting this responsibility from the environmental court. While having a professional board is crucial to ensuring Act 250 becomes a regulatory program that is fair, predictable, and timely throughout the state, assigning it the additional role of hearing appeals may lead to complications, as it would review decisions made by its own staff. This concern echoes the backlash from mayors, town managers, developers, housing advocates, and community leaders when a similar proposal was put forward in 2022, highlighting fears that it could complicate essential housing developments.

Work on the House Energy and Environment Committee’s Act 250 modernization bill continued this week as legislators considered input on measures to encourage development in areas that will lead to better smart growth outcomes for all Vermont communities. The Vermont Chamber is committed to remaining engaged in the process to secure swift and strategic positive outcomes for the Vermont business community.  

In the new version of the bill that was introduced this week, the original sections remain largely unchanged, but the bill now includes language reflecting the outcome of the Designation 2050 report that the Vermont Chamber served as an advisor for.  A section-by-section version of the bill is available online. The Vermont Chamber remains highly engaged on this issue and will be advocating for planned growth area designation requirements that are accessible to communities across the state and are large enough to encompass the thousands of housing units Vermonters need. Additionally, we will support the creation of a professional board with a mission of creating an Act 250 process for applicants that is fair, timely, and consistent across all district commissions and leaves the legal determinations of appeals with the environmental courts. In the second tier (which will be areas outside of the downtown and village planned growth areas) we will continue to support the compromise that incentivizes dense development through the creation of a road rule and forest protections that have support for working lands and rural businesses. 

Legislative leadership has made a cross-chamber commitment that there will be an Act 250 package this session that modernizes the land-use and development law to meet the needs of Vermonters by enabling the creation of new housing. Work continued this week on the Be Home bill, H.687, and S.308. Each of these bills contains initial committee perspective that will play a role in reaching a final compromise.

Work on the Be HOME bill continued in the Senate Economic Development, Housing, and General Affairs Committee where members worked to hammer out interim Act 250 relief for housing development while a larger Act 250 statewide mapping project would happen over the next several years. Due to procedural requirements, that bill was voted out of committee today but will be recommitted back to the same committee next week to receive further drafting. In addition to land use, the BE Home bill includes housing programming, local zoning changes, and taxation changes.

The House Energy and Environment Committee is shifting from taking lengthy testimony on H.687 which covers Act 250 and the summer land use studies, to implementing feedback and stakeholder considerations. With six weeks until the crossover deadlines for bills to move from one chamber to another, the committee will have significant time to refine the bill. The Vermont Chamber will continue to advocate for proposals that are more closely in line with the compromise made in the Necessary Updates to Act250 report.

The Senate Natural Resources Committee is also working on a bill concerning Act 250 and weaving together the three land use reports that were done before the session. It is unclear how the two Senate Act 250 bills will come together. There was also a joint hearing between the House General and Housing Committee and the House Human Services Committee this week on affordable housing initiatives.

On March 14, the Vermont Department of Housing & Community Development and statewide partners will hold a summit on the Homes for All Toolkit that will address community housing and affordability concerns. The toolkit includes a Missing Middle Homes Design Guide, a series of five Vermont Neighborhood Infill Design Case Studies, and a Builders’ Workbook.

With three different Act 250 modernization proposals under discussion in three different committees, stakeholders are optimistic that this could be the year for meaningful reform that includes exemptions. The BE Home bill, H.687, and S.308 each lay out a tiered approach to Act 250 jurisdiction, but differ in the details of how those tiers will be determined and what they include. The Vermont Chamber is encouraging collaboration and voicing support for policies that incentivize new development in and around our community centers as outlined by the Vermont Natural Resources Board report on necessary updates to Act 250.

The Vermont Chamber testified throughout the week before the House Energy and Environment Committee, advocating for sizable, planned growth area designations throughout the state. These would designate both large and small communities, include Act 250 exemptions, and should be large enough to build a substantial number of resilient housing units. Clear housing goals and a comprehensive data-informed plan must be established to address the changing demographic and housing needs. Legislators have an opportunity to leverage resources such as the Vermont Futures Project and VHFA’s Housing Needs Assessment to inform their decisions.

While there seem to be more housing bills introduced this session than housing units being built in Vermont, the Senate Economic Development, Housing, and General Affairs Committee took testimony throughout the week from various stakeholders to inform ongoing work on the “BE Home” bill. Early drafts of this session’s omnibus housing bill include amendments to Act 250, such as the issuance of permits contingent on other approvals and the establishment of new tiers. The proposal also addresses taxation adjustments, introducing modifications like property tax exemptions and sunset clauses for specific tax exemptions. Committee work on the proposed legislation is expected to continue next week to meet the Chair’s expectation of having a bill by early February.

The Vermont Chamber is advocating for solutions that encourage more housing to be built in viable locations, without appropriating large sums of money. In particular, for policy that incentivizes new development in and around our community centers as outlined in the Vermont Natural Resources Board report on necessary updates to Act 250.