Vermont’s housing goals are at risk. This week, Let’s Build Homes submitted urgent testimony to the Senate Committee on Natural Resources and Energy regarding the implementation of Act 181. While the law promised a "grand bargain" between conservation and growth, early data suggests a troubling trajectory: less than 2% of the state’s land is currently being mapped for new homes—a footprint smaller than the current interim exemptions allow.

We cannot accept a step backward. To avoid a looming "housing cliff" and ensure sustainable growth, we are calling for immediate technical fixes this session, including extending interim exemptions and establishing a unified regulatory map.

Read our full testimony below.

Let’s Build Homes advocates for pro-homes policy in Vermont to address our acute housing shortage that is driving record levels of homelessness, housing instability, unsustainable demographic shifts and a host of related social and economic problems.

Our organization was formed, in part, to monitor Act 181 implementation and to engage the mapmaking process. An enormous amount of skilled work is being invested in this effort by many public servants, and we believe there are elements of the legislation that are important and hold considerable promise for the future of the state.

However, it is also increasingly clear that legislative fixes must be made this legislative session or the state’s housing goals will be negatively impacted. LBH is concerned that the current implementation of Act 181 is deviating from the legislative goal of balancing new conservation measures with an urgent and substantial expansion of homes in growth areas. While mapping is ongoing, current data suggests that Tier 1 areas—the primary engine for new homes—may encompass as little as 2% of the state’s land. Without immediate legislative fixes, Vermont faces a "housing cliff" where the expiration of interim exemptions, combined with overly restrictive Tier 1 mapping and broad application of the Road Rule and Tier 3, will negatively impact the housing pipeline. Adoption this session of the recommendations below will help ensure that the full implementation of Act 181 represents a step forward for Vermont homes.

Finally, while the balance of this letter is focused on Act 181 fixes, we would like to note the relevance of the ROOT Zone proposal to this topic. ROOT Zones, done right, would give municipalities a clear and straightforward way to expand Tier 1 areas over time – something the early data is showing will clearly be needed – and will ensure that after the enormous public effort to map Tier 1 areas is complete, we maximize the value of these areas by modernizing the local zoning and fixing the permit appeals system within them.

High-level concern: On our current trajectory, the state’s Future Land Use Map will Fail to Meet the State’s Housing Goals

While the mapping process is not complete, the emerging picture of the likely, first-ever Future Land Use (FLU) Map is troubling:

• Vermont Digger recently reported that Devon Neary, the Board Chair of the Vermont Association of Planning and Development Agencies, “expects 2% to 2.5% of the state’s land to end up falling in Tier 1. That’s less land area than currently falls under current temporary exemptions to Act 250, he said.”
• The Vermont League of Cities and Towns (VLCT) estimates that 2.1% of the state will be Tier 1 eligible, with some regions having as little as .5% of eligible land.
• Further, despite the very low percentage of the state being mapped as Tier 1 eligible, the Land Use Review Board has been substantially reducing Tier 1 eligible areas in the early maps it has received from several Regional Planning Commissions (RPCs). Our understanding from VAPDA officials is that the LURB reduced the Tier 1 eligible land by approximately 10% in Chittenden County, and 20% in Rutland County.

If after a massive, expensive, multi-year process only 2% of the state is mapped as Tier 1 the FLU Map will amount to a step backwards on housing opportunity, the state will not be well positioned to meet its critical housing targets, and the justification of Act 181’s sweeping new land use restrictions as a “grand bargain” will collapse.

The specific recommendations detailed below are offered as steps that can and should be implemented this session to attempt to avoid this policy failure.

Specific Legislative Fixes

We propose the following technical changes to Act 181:

• Accept the Rural Caucus’s revised deadlines and notice requirements for Tier 3. VAPDA testified earlier this week that 40% of the state’s future housing will be built outside of Tier 1 areas. LBH believes this figure can be lowered through responsible expansion of Tier 1 areas, however this projection underscores the need to take great care that Tier 3 mapping and the Road Rule are not implemented in a manner that becomes a de facto ban on rural infill. LBH strongly supports the Rural Caucus’s amended deadlines and notice requirement to ensure that the state and the public has the time and the information needed to get this critical regulation right.

• Require the LURB to create and maintain an accurate, unified, statewide regulatory map clearly delineating all Tier 1A, Tier 1B and Tier 3 areas: VAPDA has requested an amendment to Sec. XX. 24 V.S.A. § 4348a (12)(J) to remove the requirement that Tier 3 areas be mapped on the FLU maps that the RPCs are responsible for. We are sympathetic to this VAPDA request as we understand there are practical challenges with RPCs maintaining these maps. However, to ensure regulatory clarity, there must be one, unified regulatory map that clearly articulates to the public the boundaries of Tier 1A, Tier 1B and Tier 3 areas. If the RPCs are relieved of this responsibility to generate and maintain a coordinated map, this requirement must be added to the LURB’s responsibilities.

• Shift Tier 1B to an "Opt-Out" Model: The creation of Tier 1B housing growth areas represents one of the strongest actions the state has taken to date to try to address its acute housing shortage. If land meets the statutory requirements to be Tier 1B eligible, it is in the state’s interest for that designation to be the default status, requiring a municipality to actively opt out if they wish to decline it. Municipalities seeking to opt-out of tier 1B eligibility mapped by the RPCs should be required to notify the RPC and hold a duly-warned public hearing 30 days before action by the legislative body to opt out of Tier 1B.

• Clarify the definitions of the land use categories to support new smart growth beyond "Historic" Centers with existing civic facilities and mixed-use buildings: The current definitions of land use categories in Sec. XX. 24 V.S.A. § 4348 are causing the LURB to reduce Tier 1 eligible areas being mapped by RPCs, and, if unchanged, will result in Tier 1 areas that are too small to meet the state’s needs. The current definitions will limit the ability of communities to respond to emerging flood issues and practice smart growth. LBH strongly supports all of the changes in this section recommended by VAPDA in their recent communication to you.

• Remove Requirement that Municipalities Enforce Existing Act 250 Permit Conditions in Tier 1A: A late addition to Act 181 required municipalities to enforce existing Act 250 permit conditions in their Tier 1A areas. Municipalities have expressed practical and substantive concerns about their ability to do this and what this language requires of them. LBH agrees with the Rural Caucus that Sec. 4. 24 V.S.A. § 4460 (h) is an obstacle to the creation of the Tier 1A areas the state needs to meet its goals. LBH will submit an alternative amendment to this section by separate cover.

• Establish a Fast-Track Tier 1 Amendment Path: Even when all of the issues detailed above are addressed, it is clear that the initial FLU mapping process will result in a very small percentage of the state being Tier 1 and the ability expand Tier 1 areas in the future with reasonable administrative effort will be critical. LBH strongly supports VAPDA’s recommendation to amend Sec. XX. 24 V.S.A. § 4348(n) to create a process for Tier 1B status requests. In subsections (2) to (n) VAPDA recommends a 60-day timeline for LURB approval after a municipality and RPC have acted to issue a Tier 1B amendment. Given that multiple public hearings and a large amount of public process will already have taken place at the local and regional level before the RPCs submit an amendment to the LURB, LBH would prefer to see a process that is deferential to the actions of the municipality and RPCs. The LURB could be given the direction to grant ministerial approvals of amendments within 15 days submission unless a specific finding of regional plan noncompliance is identified by LURB staff and warned for Board consideration. At the least, language should be added to this VAPDA amendment to make clear that if the LURB does not act in this time the Tier 1B amendment should be deemed approved.

• Extend Interim Housing Exemption areas to 2030: The temporary exemption areas contributed to a burst of housing development as development after passage because developers had three years of certainty about Act 250 exemptions. That certainty is now gone for projects starting today as no one can say with certainty what the Tier 1 and Tier 3 maps will contain a little more than a year from now. Further, with the recent reports that only about 2% of the state will be Tier 1 eligible, that the LURB is systematically reducing the size of the Tier 1 areas the RPCs have mapped, and that the projected Tier 1 area will be smaller than the temporary exemption areas, it is clear that considerable additional, time-consuming work will be needed to get the Tier 1 maps right. Extending the Interim Housing Exemptions until January 1, 2030, independent of the status of final FLU maps, will address this issue.

These adjustments are technical in nature but critical in impact. By refining the statutory definitions to allow for broader growth areas and unifying the mapping process, the Committee can ensure Act 181 delivers on its promise of a sustainable, housed Vermont.