On January 10, Governor Scott and a tripartisan group of legislators presented H. 719, dubbed the BeHOME Act.  This bill may constitute the most ambitious reform effort to date to address Vermont’s inadequate housing supply through various permit reforms, tax exemptions and appropriations. 

The bill proposes a number of far-reaching reforms, both large and small. While it is certain that any housing and permit reform bill enacted by the General Assembly this session would modify elements of this bill, it is important to understand what is on the table. A summary of the bill’s key elements follows:

Act 250

• Housing projects within designated centers – or within a half mile of a designated center – would be exempt from Act 250 review. The half-mile extension provides some additional flexibility to encourage housing near these centers but outside of flood-prone areas because many existing designated centers are located along rivers and streams.

• The Act 250 jurisdictional threshold of 10 units being constructed within 5 miles within 5 years would be modified. Instead, a developer would be able to construct less than 30 units within 2 years without Act 250 review if located within a municipality “feasibly served by water and sewer infrastructure.” In other locations, the threshold would be altered to 10 units being constructed within 5 miles within 2 years.

• Hotels and motels converted to permanently affordable housing would be exempt from Act 250 review.

• Municipalities with “high-quality zoning bylaws that are functionally equivalent” to the Act 250 criteria would be able to pursue delegation authority allowing robust local review to supplant the need for duplicative Act 250 review. The Natural Resources Board would develop guidelines for granting this authority by July 1, 2025.

Municipal Zoning

• Currently, a group of ten people in a municipality have standing as “interested persons” in zoning appeals even if they would not be directly impacted by a project within the municipality. This group standing requirement would be modified to 10% of the municipalities population.

• The right to appeal a zoning permit authorizing housing or mixed-use development within a designated center that allows residential development would be eliminated.

• The right to appeal a zoning permit authorizing “residential and mixed-use development containing up to 25 dwelling units within areas served by municipal sewer and water infrastructure” would be eliminated.

• The right to appeal a zoning permit authorizing permitted residential and mixed-use development that does not require conditional use review would be eliminated.

• Parties seeking to appeal the zoning permit for a housing project would need to post a bond sufficient to cover half of the appeal costs and other expenses incurred by the applicant if the appeal fails and is deemed nonfrivolous. If the appeal is deemed frivolous, the appellants would be liable for all of the costs and expenses.

• Zoning decisions would need to be issued within 60 days after the filing of a complete zoning application, otherwise, the permit will be deemed approved. This would replace the current rule that an application is deemed approved 45 days after the closure of the hearing if no decision is issued.

• In areas served by municipal sewer and water infrastructure, municipalities would need to allow at least 1 dwelling unit for each 1/5th of an acre (i.e., 5 units per acre applied proportionately).

• Municipalities would need to allow for lot coverage of at least 50% in areas served by municipal sewer and water infrastructure, with a 20% bonus on lots that allow access to new or subdivided lots without road frontage.

Environmental Division Appeals

• To have standing to appeal a zoning permit to the Environmental Division, a party would have to allege an injury-in-fact that would be suffered if the project were to proceed. This is stricter than the current “particularized interest” standard.

• On appeal, the Court would need conduct its merits hearing within 60 days of the filing of the appeal, with a decision to be issued within 90 days thereafter. This would compare to current appeals, which typically last anywhere from 9 to 24 months.

Property Tax Exemption

• For purposes of state education taxes, new and rehabilitated housing within designated districts would be exempt for five years from an increase in assessed value realized through the housing improvements.

• To qualify for this exemption, the housing units constructed would need to be designed as principal residences, not short-term rentals. If multiple units are being constructed within a single structure, they would need to qualify as mixed-income housing under 10 V.S.A. § 6001(27).

• Municipal voters could likewise approve a parallel exemption relating to municipal property taxes.

Appropriations

• $8,000,000 for the Housing Infrastructure Revolving Loan Fund.

• $6,000,000 for the Vermont Housing Improvement Program.

• $5,000,000 for the Vermont Affordable Home Development Program.

• $2,000,000 for the Manufactured Home Improvement and Repair Program.

• $1,000,000 for the Healthy Homes Initiative.

• $250,000 to assist municipalities with adjusting their zoning bylaws.

It is inevitable that, during the course of the upcoming legislative process, changes will be made to the provisions of the BeHOME Act. In truth, there is no guaranty that such sweeping reforms will ultimately be enacted by the General Assembly. Simply put, the highway is strewn with unsuccessful permit reform efforts of the past. Other legislative proposals will assuredly emerge over the coming weeks. Nonetheless, the BeHOME Act constitutes perhaps the most ambitious effort to date to chart a path forward which would meaningfully address Vermont’s increasingly dire housing shortage, a shortage which affects all of Vermont’s communities and citizens.