A wide-ranging housing bill that seeks to pave the way for more construction by overhauling state and local building regulations is moving forward.
The Senate Economic Development, Housing and General Affairs Committee on Wednesday unanimously advanced omnibus legislation that would make substantial revisions to Act 250, Vermont’s landmark land-use law, and require municipalities to allow for denser housing in certain areas.
Nationally and in Vermont, permitting and zoning are increasingly seen as primary drivers of the housing crisis. Supply is not meeting demand, and the argument from a growing coalition of activists, academics and housing advocates is that duplicative and onerous regulations slow development to a crawl while certain municipal rules, particularly in more affluent communities, effectively outlaw cheaper, denser housing.
The bill, in many ways, is an attempt to strike a grand bargain between those (like municipalities) who point the finger at the state’s regulations, and those (like certain environmental groups) who blame municipal rules. The legislation also includes $90 million, the bulk of which would be used to build or renovate housing.
Sen. Kesha Ram Hinsdale, D/P-Chittenden Southeast, the committee’s chair, said the bill is attempting to touch “every piece of the housing supply and housing creation continuum.”
“Everything needs to be re-examined, scaled back, if we’re going to get housing development where we want it,” she said. “So if there’s no one thing we’re blaming in the system.”
The legislation has a long way to go — and it is expected to run into significant opposition. It must next pass before the Senate’s natural resources and appropriations committees before hitting the full Senate floor. The Vermont House has not yet reviewed it.
For Brian Shupe, the executive director of the Vermont Natural Resources Council, the committee’s bill is a “mixed bag.” The environmental group is generally very supportive of most of the municipal zoning reforms included in the legislation, which Shupe called “reflective of a national dialogue” about how zoning has constrained affordable housing and kept certain communities segregated.
“That is a conversation that is overdue,” he said.
But the Act 250 reforms contemplated, he argued, have not been “well crafted.”
The Legislature approved smaller Act 250 carve-outs last year. Better to wait and see how those are working, Shupe said, and tackle broader changes next year, when a package of studies commissioned by lawmakers will be in hand.
“We would not be saying ‘let’s delay’ if we didn’t think that the zoning provisions that are in the bill are going to have a very significant impact on housing — much greater than Act 250 is going to have,” he said.
Attempts to make significant changes to the 50-year-old law have fallen prey, year after year, to a succession of disputes between lawmakers, environmentalists and Gov. Phil Scott’s administration. Ram Hinsdale, for her part, argues that it’s unacceptable to once again punt on reform given how dire Vermont’s housing crisis has become.
“When we looked at ‘Are we putting the cart before the horse?’ because we should wait for Act 250 studies, I simply said ‘We are the horse.’ At some point the state has to lead,” she said.
Municipal groups, meanwhile, remain resistant to the bill’s major zoning changes as an encroachment on local control. The bill, for example, would likely override a set of controversial zoning regulations enacted in South Burlington intended to take most of the city’s remaining open land out of consideration for development. Rosanne Greco, a member of the South Burlington Land Trust board of directors, said in an interview that the housing crisis was a “temporary, short-term problem” and that the bill would attempt to solve it by “endangering the long term crisis that we’re facing with climate change.”
Scott has long been beating the drum of deregulation to address the state’s housing crisis. His housing commissioner, Josh Hanford, on Wednesday said that while the Republican governor might have liked even more aggressive reforms, those included in the bill were nevertheless “impressive.”
“This is the farthest we’ve gone to make housing the priority that it should be,” he said. The administration has often taken aim at the so-called “10-5-5 rule,” which triggers Act 250 review when a developer seeks to build at least 10 units within a five-mile radius in a five-year period, and Hanford said he was particularly pleased with a provision in the bill that would increase that threshold to 25 units.
The Vermont Housing Finance Agency estimates that the state needs to make 40,000 new housing units available by 2030 if it wants to return to a healthy market. And Maura Collins, its executive director, said achieving that goal will be “all but impossible” unless Vermont invests more money and overhauls its regulatory environment.
“There’s no way we can just appropriate our way out of this problem,” she said. “We need to pair those investments with making sure that communities are housing-ready.”
Collins complimented the bill’s comprehensiveness, but also singled out a few municipal zoning updates as particularly impactful, including provisions that would require municipalities to allow at least four units to be built per acre in residential areas already served by water and sewer, and that would make duplexes legal anywhere single-family homes were allowed. (In areas served by water and sewer, triplexes and fourplexes would have to be allowed.)
“That’s going to really help our communities add more housing units and not necessarily have to look a whole lot different than they do now,” she said.
She also pointed to a section that would prevent municipalities from requiring more than one parking space per dwelling unit, although that maximum would increase to 1.5 in areas without sufficient public or on-street parking.
The bill also would set aside a little over $90 million in one-time funding, primarily to build or rehab housing. Major proposals include:
■$20 million to VHFA for a Missing Middle-Income Homeownership Development Program, which would provide subsidies for new construction or rehabilitation of affordable owner-occupied housing for purchase by income-eligible homebuyers.
■$20 million to VHFA for a Middle-Income Rental Housing Revolving Loan Program, which would provide subsidized loans for rental housing that serves middle-income households.
■$20 million to the Vermont Rental Housing Improvement Program, which would fund grants for up to $50,000 per unit to private landlords for the rehabilitation of eligible rental housing units.
■$25 million to the Vermont Housing and Conservation Board to fund affordable mixed-income rental housing and homeownership units, make improvements to manufactured homes and communities, recovery residences, and farmworker housing.
■$2.5 million to help tenants pay for rental arrears and prevent eviction for nonpayment of rent.