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Site Work: Bills Would Chip Away at Rules Curbing Home Construction

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Published March 8, 2023 at 10:00 a.m.
Updated April 11, 2023 at 2:34 p.m.


DIANA BOLTON
  • Diana Bolton

There's strength in numbers, and Sen. Kesha Ram Hinsdale (D-Chittenden-Southeast) showed them on March 1 when she assembled nearly 20 supporters for a press conference. The topic: a housing bill that the committee she helms had drafted as its sole task in the first two months of the legislative session.

S.100 seeks to make it easier to build housing in Vermont at a time of worrisome shortage. It would revise Act 250, Vermont's 50-year-old land-use law, and require the state's cities and towns to allow more housing in areas suited for denser development. It would also remove redundancies that force developers to apply for similar permits from both local and state entities for the same project, adding to the cost.

In so doing, the bill would dismantle some of the regulations that have created bucolic villages and towns where homeownership is increasingly inaccessible to all but the wealthy.

"We are sharing the responsibility between state and local government about how we get rid of this housing crisis," Ram Hinsdale said at the event. Her Senate Committee on Economic Development, Housing and General Affairs advanced the bill unanimously last month.

Vermont has had a housing shortage for years now, but the pandemic — and the influx of people to the state that resulted — worsened the crisis considerably. The median price of a Vermont home jumped 15 percent last year, to $310,000, according to the Vermont Housing Finance Agency — the largest annual percentage increase since 1988, when the Vermont Department of Taxes started publishing home price data. The median price of a newly built Vermont home jumped 21 percent, to $555,000.

The VHFA says Vermont needs to build 40,000 new housing units by 2030 in order to meet demand — a large number for a state with just 645,000 residents.

S.100, and its House counterpart, H.68, have been months in the making. The House bill, sponsored by Rep. Seth Bongartz (D-Manchester), takes aim at local control but doesn't include any changes to Act 250. Both bills would limit the power of residents to appeal projects on the grounds that they threaten local "character." The bills would also loosen municipal regulations that set minimum parking requirements, designate areas exclusively for single-family homes and restrict the number of units allowed per acre.

A third bill, H.111, the work of the legislature's Rural Caucus, would adjust housing programs governing grants, incentives and regulations to ensure that small towns are eligible and could obtain the administrative help they need to apply for them. That assistance is critical, said Karen Horn, the director of public policy and advocacy for the Vermont League of Cities & Towns. Right now, she said, state and federal incentives favor nonprofit housing developers that tend to build large, multifamily projects.

"H.111 is our favorite of the [housing] bills right now," Horn said in an interview. "You have to make it easier for small developers, even individual property owners, to build one or two units in small communities; that's how you're going to increase the housing stock in those places."

Permits and regulations aren't the only reasons it's so expensive to build or buy a home. Prices for land, labor and construction materials have soared in the past few years, making it difficult for developers to earn a profit building mid-price homes.

But lawmakers can't do much about the pricing of Sheetrock, lumber and plumbing fixtures. Meantime, there is widespread agreement in and out of the Statehouse that permitting processes — in particular, measures that allow neighbors to challenge housing construction — have blocked projects for years. Through the use of Act 250, which allows an appeal as long as any 10 locals sign on, neighbors have demanded that developments be scaled down to the point that they're not financially feasible, prompting developers to drop them.

Ram Hinsdale has worked to convince skeptical members of her committee that sweeping measures are in order. Since January, she's invited employers, builders and advocates in to testify about the ways that the housing shortage is creating racial inequity and suppressing economic growth.

Evan Langfeldt, president and CEO of the South Burlington-based development company O'Brien Brothers, told the committee on February 9 that costs for building a typical unit of housing have risen $120,000 in the past three years. City and state permit fees run about $25,000 for each 2,000-square-foot home in an O'Brien development under construction in South Burlington.

"That's not engineering, not architecture, not legal — just straight-up fees," Langfeldt said, noting that South Burlington recently added an impact fee of up to $12,500 for a four-bedroom home. Developers say it typically takes more than three years to usher a development through the permitting process.

"Obviously, the costs get transferred to the buyer at some point," Langfeldt said.

The bill Ram Hinsdale and others touted has broad backing. Among the attendees who showed their support on March 1 were Josh Hanford, Gov. Phil Scott's housing and community development commissioner; Mark Hughes, a racial justice activist based in Burlington; and Megan Sullivan, the vice president of government affairs for the Vermont Chamber of Commerce.

Hughes said the Senate bill would help create homes for low-income people.

"Most poor people are white, but most Black people are poor," Hughes said. He added that Act 250, by limiting where housing can be built in order to preserve Vermont's forests and open spaces, has ended up creating zones where few people can afford to live. The housing shortage has also driven up prices for renters and home buyers.

Legislation that sets out to dismantle local control counters the work of the Vermont League of Cities & Towns, which had staff members at some of the meetings at which the housing bills were crafted but has not endorsed them. Horn stood near the podium with Ram Hinsdale during the recent press conference and said the league recognizes that change is needed.

"We know that we have work to do in towns with zoning," Horn said.

But she also pointed out that even in the several dozen Vermont towns without local zoning, no new housing developments have been built recently. She blamed the costs associated with Act 250 and the history of appeals.

Horn added that Vermont's village centers, where the state wants to encourage growth, only make up 41 of Vermont's 9,600 square miles.

"This is not a lot of already occupied land to wedge 40,000 housing units into," Horn said. She recommends that lawmakers first take aim at Act 250 proceedings, not local zoning reviews. "It will not come close to happening if Act 250 jurisdiction continues to apply in those designated areas."

Nearly 100 cities, towns and villages have recently received grants to help them update their zoning or subdivision bylaws, Horn said. Those towns — and the many others working on their regulations — are seeking to remove obstacles to housing on their own, she said.

"The work is being done today," Horn said in an interview. "We believe that encouraging towns to continue that work and providing flexibility will be more effective in providing housing than one-size-fits-all zoning mandates in state laws."

Horn acknowledged that the league is treading a thin line by working to maintain local control for its member municipalities while tackling a broader housing crisis that is creating problems for those members, too.

Under existing law, developers must apply for an Act 250 permit for a project of 10 housing units or more. S.100 would expand that number to 24 units, one of many measures that Horn will be watching closely as the bill makes its way through the legislative process. For example, she said, the league wants the bill to retain a measure that would make it easier for towns to let housing developers build in predesignated downtown areas with only local zoning approval, exempting the projects from review under Act 250.

"If there is not relief from Act 250 in S.100, we can't support it," she said.

Permitting is a touchy subject. While many environmental advocates acknowledge it's time to update Act 250, they also resist efforts to do so, and none of them stood behind Ram Hinsdale at the March 1 event. The bill her committee voted out is now before the Senate Committee on Natural Resources and Energy, a panel that traditionally has not favored weakening Act 250.

Many agree that Act 250 has helped Vermont hold the line against unsightly modern realities such as billboards, big-box stores, strip malls and sprawling housing developments. Yet municipal zoning regulations — such as those that allow only one home per lot per acre, five acres or 10 acres, depending on the municipality — have also contributed to sprawl.

"Municipal zoning — and I really believe it's not intentional — can and does have a discriminatory impact," Bongartz said in an interview. "A lot of our zoning was done 50 years ago, and we now know that it can exclude low- and moderate-income people from living in downtowns."

S.100 is under close scrutiny in the natural resources committee. Brian Shupe, executive director of the Vermont Natural Resources Council, asked the panel last Friday to toss the changes to Act 250 altogether, noting that one study of the land-use law is under way and another is planned. It doesn't make sense to tinker with Act 250 until those are completed — if at all, he said.

"There's a lot of anecdotal information about how terrible Act 250 is," Shupe added. "The statistics don't bear that out."

At that hearing, Sen. Mark MacDonald (D-Orange) questioned the assumption that Vermont needs to focus new development on compact downtown areas, essentially questioning the state's approach.

"We're worried about where young people are going to live, and we're trying to put them into a compactor and squeeze them into downtowns," MacDonald said. "Meanwhile, outside of town, people with plenty of resources are pretty much unfettered in building multiple driveways up hillsides, causing erosion and whatever, going through game trails left and right, looking for views."

Senate President Pro Tempore Phil Baruth (D/P-Chittenden-Central) has acknowledged the challenge of addressing housing needs while maintaining environmental protections. "That's a notoriously tough balance, but I have no doubt that we will strike it in the Senate," Baruth said.

The Senate bill — which also contains $90 million to build or rehabilitate housing — has run into stiff opposition from the South Burlington Land Trust. It objects to a pro-development provision that would require towns to allow at least four units of housing per acre in areas served by municipal water and sewer systems. South Burlington has that infrastructure in places that the land trust and city regulations define as important natural resource areas.

Land trust member Rosanne Greco testified in February before the Senate committee that Ram Hinsdale chairs that encouraging development along South Burlington's water and sewer lines would hinder attempts to meet the state's climate goals. Some have charged that the land trust's opposition is based on a reluctance to allow more housing, but Greco denied that.

"This issue is about saving the land versus building houses on it. Calling folks NIMBYs diverts attention away from the issue at hand," she said in an email.

During her testimony, Greco said she was speaking on behalf of the environment.

"The more we destroy our natural environment with housing, future generations are going to suffer," she said. "Those trees, those grasses, the wildlife, they all provide us with what we need to live. In the climate crisis, we need more of that."

Bolstered by Baruth's support, S.100 is expected to pass the Senate. The House version will run a gauntlet that includes the House Committee on Environment and Energy, whose chair, Rep. Amy Sheldon (D-Middlebury), did not return messages last week. House Speaker Jill Krowinski (D-Burlington) has also pledged to support efforts to streamline the home construction permitting process.

Correction, March 8, 2023: A previous version of this story misidentified the House Committee on Environment and Energy.

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