Act 181 was passed in 2024, with the intention of alleviating the double-burden of Act 250 review in designated “Tier 1” areas, a proxy for where the state wanted to see housing growth. At the same time, it would establish more restrictions outside of those areas, with the goal of protecting critical natural resources. However, in recent weeks it’s become clear that the impacts of those restrictions outside Tier 1 are set to create unintended consequences for landowners that may restrict housing development in those areas.

Additionally, under Act 181, the expectation is that the housing growth required by statewide targets—which call for building between 5,573 and 8,237 units annually to meet our need—will be concentrated heavily in the designated "Tier 1" growth areas, with projections estimating that roughly 60% of future housing will land inside those boundaries.

But two questions remain unanswered even at this point in Act 181’s implementation: what will be the impact on statewide housing growth if we further restrict housing growth outside of Tier 1? And is Tier 1 even on track to be large enough to accommodate the housing growth we expect of it?

To begin trying to answer these questions, we've published a new interactive data report examining Vermont's housing production from 2021 to 2025. Using the Act 181 temporary exemption maps as a proxy for future Tier 1 boundaries, we can see how recent development compares to the areas where the state expects future growth to concentrate.

The data reveals a significant gap between where we are and where we're aiming to be.

The Reality of Recent Growth

Over the last five years, 59.1% of all new housing units were built outside these temporary exemption areas. The disparity is sharper still for specific housing types: a striking 88.0% of single-family homes were built outside the designated growth areas.

These numbers surface two major concerns about how Act 181 is being implemented.

1. The risk of constraining the "outside"

Right now, the areas outside the Tier 1 proxy area are the backbone of Vermont's housing production. That raises hard questions about the push to apply new regulatory barriers—like the road rule and Tier 3 designations—to those exact locations. Moving ahead with broad new restrictions on the places producing most of our housing, without a clear and data-backed understanding of the consequences, is a reckless approach.

2. The capacity of the "inside"

At the same time, we need to take a hard look at the Tier 1 areas themselves. Hitting the 60% projection means these geographies will have to absorb a massive increase in housing volume. Are their boundaries drawn broadly enough to offer real development options? If the growth areas are too small to hold the housing Vermont needs, that development doesn't simply disappear—it gets pushed outside, directly into the new barriers being erected around it.

The Path Forward

At a moment when Vermont desperately needs growth, our policy framework should focus on pulling development into the places we want it, through incentives and regulatory streamlining—not on restricting it with barriers in the places we don't. This reinforces our position that the road rule should be repealed, and that Tier 3 should be substantially narrowed or repealed as well.

We also are left with further questions to explore in the future: Is the lack of growth we’ve been seeing inside the temporary exemption areas due primarily to the burden of Act 250 review that is being removed? Or are many of those areas already built out?

We invite you to explore the full data report to see the numbers, charts, and maps for yourself.