Vermont’s legislative session adjourned at the end of May and once again one of the most consequential pieces of legislation to pass this year was the housing and land use bill that Let’s Build Homes (LBH) focused its efforts on: S.325.

This outcome seemed unlikely when the session started. After the Home Act in 2023, Act 181 in 2024, and the creation of the Community Housing and Infrastructure Program last year, at the beginning of this session we were hearing from some legislators that we needed to take a break to focus on health care, education and other priorities.

We understand the competing pressures legislators face, but our housing shortage is far from solved, and housing affordability is a major driver of healthcare costs, school enrollment, and economic stability. Vermonters agree—the poll we released in February showed that housing remained the #1 issue on the minds of Vermonters and that 75% of them wanted the legislature to take further action, so it was clear that this was not the time to take a break.

Let's Build Homes, along with other allied organizations and the farmers, landowners, and engaged residents who showed up and spoke out, led the way to deliver this critical bill. The bill that passed overwhelmingly through both chambers just before the gavel fell and is now headed to the governor’s desk includes three big wins for homes:

Bigger and stronger housing growth areas

Since 2024 it has been official state policy that we want to build many more homes in and near existing downtowns and village centers in what the state calls "Tier 1" or housing growth areas. Regional Planning Commissions and municipalities spent the last year drawing maps to designate these areas. However, as 2026 began the Land Use Review Board (LURB), which reviews and has the final say on those maps, made a series of decisions shrinking these areas by 10-30% on the first maps they reviewed.

Mid-session, LBH published an analysis showing the state has been consistently missing both the overall housing targets and its geographic housing targets since 2021. Cutting back large swaths of the housing growth areas mapped by our cities and towns would clearly only make these goals harder to achieve.

Thankfully, the legislature responded to this concern and adopted a series of important definitional changes that should result in the LURB approving larger housing growth areas. It should now also be faster and easier to expand housing growth areas further in the future. While the initial housing growth areas should be considerably larger and more impactful as a result of these changes this complex mapping issue (that per Act 181 requires three levels of governmental approvals) is not settled and we expect more legislative action will be needed in the future.

S.325 also helpfully extends the current interim exemption areas until 2028, giving us two more years to get the permanent housing growth areas right.

We are grateful to the Vermont Association of Planners and Development Agencies (VAPDA) and the Vermont League of Cities and Towns (VLCT) for their leadership and partnership on this issue.

Tier 3 and the “road rule” repealed in support of rural homes

LBH’s 2026 Legislative Platform raised concerns about the impact of Tier 3 and the road rule on rural areas and joined the Rural Caucus’ call for implementation delays. As the session developed, new information was released by the LURB and we completed our analysis of where homes are being built. We became increasingly concerned that these broad, restrictive new rules could actually worsen our shortage by making permitting of homes in a large swath of the state more expensive, slower, and less predictable.

In early February, LBH formally amended its platform to support the growing grassroots calls to repeal Tier 3 and the road rule. We are very grateful that the legislature heard these concerns and responded decisively to them with complete repeals of these new rules.

In this debate, rural Vermonters figured out and brought attention to a big problem with the way we frequently regulate land in this state: qualitative, subjective land use rules are costly, slow and inequitable, as they require people who want to build to hire experts and invest large sums to determine what the law means for their property. This problem has broad implications for the housing shortage: we need a clearer, fairer, objective way to protect our valuable natural resources and other priorities and meet our housing goals.

Progress toward “by right” housing

LBH’s ROOT Zones concept (Residential Opportunity Overlay Towns)took a big step forward, as S.325 calls on the Department of Housing and Community Development (DHCD) to assess the negative impacts of discretionary review, and the value of a state-supported model code. The bill also names Let's Build Homes as an advisory party for this report—the first time our coalition has been formally recognized in Vermont law!

ROOT Zones would give towns a clear path to speed up housing approvals by replacing unpredictable discretionary review with objective standards. In recent months we have been working closely with several Vermont municipalities to start thinking through the details of what this model code could involve. The progress of this work, combined with this official S.325 legislative report, means the ROOT Zones concept now has real momentum – we should have much more on this soon.

LBH is committed to continued public investment in housing and the state is making another year of major investments with most programs funded at levels comparable to last year. Our coalition partner, the Housing and Homelessness Alliance of Vermont just published this comprehensive summary of this year’s housing funding. Here is where some of the funding details we focused on landed:

• VHIP added to base funding - The popular Vermont Housing Improvement Program, which provides $50,000 grants to property owners to build ADUs and other small scale home development, has been added to the structural base budget for the first time.

• The homebuyer down payment assistance program passed and will continue indefinitely.

• The popular Downtown and Village Tax Credit Program will be expanded from $3 million to $3.5 million. LBH has called for removing the cap on this program as a strategy for strengthening our Tier 1 areas and welcomes this step.

What’s Next?

We still have a lot of work to do to enable our housing growth areas to succeed. Our analysis on where housing is actually getting built in Vermont makes clear that we are currently falling far short of the state’s statutory goal of building the substantial majority of new housing in designated housing growth areas. We are still facing major barriers, like regulatory uncertainty, infrastructure constraints, and cost, to building in the places we’ve collectively decided we want growth to happen. 

If we’re serious about housing growth areas as Vermont’s primary strategy for meeting our housing targets, we need to do much more to unlock them. This summer and fall, we will be working with our coalition to develop a package of policies designed to make it faster and less expensive to build housing in the places Vermont has already said it wants homes built. We'll be working to build the analytical case for each policy so we can bring a sharp and evidence-based platform to the legislature in January.

Wetlands Reform in housing growth areas

The debate over wetlands policy that has been intensifying for the last year is an example of the kind of difficult but necessary work we are going to need to do if we want our housing growth areas to thrive.

Vermont has a lot to be proud of in terms of environmental conservation and stewardship, and protecting wetlands is part of that legacy. At the same time, Vermont’s unique wetlands regulation system can create serious delays, costs and uncertainty for the development of new homes.

We are optimistic that there is a way to stay true to the spirit of Vermont’s legacy of environmental stewardship and make it easier to build the homes we need. Vermonters are too: Let’s Build Homes’ polling shows that Vermonters believe we can build more homes while protecting the environment by focusing growth in and near existing communities. 

That is why Let’s Build Homes supports the proposed solution that would reduce wetland buffers from 50’ to 25’ and tie the regulatory system in housing growth areas to definitive state wetlands maps. Our housing growth areas make up only 2-3% of the state’s land area, and this change would unlock housing in the places that Vermont has collectively decided it wants growth to happen, without compromising the wetlands protections that matter. 

LBH is certainly open to supporting other solutions to this critical challenge, but this problem is urgent and we cannot accept that the status quo is the best we can do.

Make housing an issue this election season

This summer, state legislative primaries will determine who appears on the November ballot, and the general election will decide who represents your community in Montpelier next session. As candidates come to your door, show up at community events, and ask for your vote, make sure housing is part of the conversation. Ask them where they stand on the reforms we've been fighting for. The progress we made this session happened because legislators heard from constituents, and it’s important for our leaders to know that housing needs to be a top priority.

With the session behind us, we're excited to focus on other parts of this work. We will be back in touch again soon with more about the fall elections and opportunities to get involved.