With veto override, Act 250 reform bill becomes law

Bill is hailed as a compromise between advocates
for housing and environmentalists

By Carly Berlin

Lawmakers have voted to override Gov. Phil Scott’s veto of a marquee housing and land-use bill that makes broad reforms to Act 250, Vermont’s signature development review law.  That means H.687, a bill that seeks to balance promoting housing growth and environmental conservation, will now become law. 

“We kept our eye on the twin goals of environmental integrity and the immediate short and long term needs of the people we serve,” Rep. Seth Bongartz, D-Manchester, one of the bill’s authors, told colleagues on the House floor ahead of the vote on Monday morning. 

In the House, 107 lawmakers voted to override the veto, while 38 voted against it. In the Senate, the override received 21 “yes” votes and 8 “no” votes. Overrides require a two-thirds majority in each chamber.

For years, state leaders tried and failed to find a path forward to update Act 250, a law that has governed development in Vermont for over half a century. Proponents for housing growth have long argued that the regulation adds time, cost and risk to the development process, throwing cold water on Vermont’s efforts to encourage more housing construction. Meanwhile, some environmentalists have reasoned that Act 250 could do more to protect sensitive habitats as the climate changes.

H.687 represents a compromise between those interests. It will relax Act 250’s reach in existing development centers, a move proponents hope will clear red tape and encourage compact housing development amid an acute housing shortage. It also lays the groundwork for extending Act 250’s protections in areas deemed ecologically sensitive. 

Scott has long beaten the drum on deregulation, arguing that loosening Act 250 will help boost more housing growth. But throughout the 2024 legislative season, the Republican governor repeatedly criticized lawmakers’ latest attempt to overhaul the land-use law, claiming that H.687 places more emphasis on conservation than on promoting more housing, particularly in rural parts of Vermont.

That disapproval reached a fever pitch late last week, when Scott vetoed the bill. “Despite almost universal consensus, I don’t believe we’ve done nearly enough to address Vermont’s housing affordability crisis,” Scott wrote in a letter to lawmakers explaining his decision. He claimed that H.687 would in fact expand Act 250 regulation “at a pace that will slow down current housing efforts.”

Republican lawmakers repeated many of Scott’s concerns on Monday, arguing that certain aspects of H.687 — like a new “road rule,” which will trigger Act 250 review for larger-scale private road construction, a measure meant to deter forest fragmentation — constitute an expansion of Act 250’s reach and will hinder building.

But Democratic backers of the bill argue that H.687 in fact makes significant Act 250 rollbacks for the first time in the law’s history.

“For the first time since its passage, we now recommend relinquishing jurisdiction for the purposes of building housing in areas that meet certain conditions,” Bongartz said. He noted that local planning and zoning rules have evolved considerably since the state-level review law was passed in 1970, as a response to rapid development in Vermont.

H.687 sets in motion a process to chop Vermont into a series of “tiers” that will dictate how development is treated under Act 250, easing the law’s reach in some already-developed areas and strengthening its protections over sensitive ecosystems. 

The actual boundaries of the new Act 250 tiers will be hashed out in a years-long mapping and rulemaking process. In the meantime, the bill sets up a number of interim exemptions from Act 250, including one for all housing projects within the state’s 24 designated downtown areas through January 2027, and for projects of up to 50 units around dozens of village centers around the state.

The sprawling bill carries far more than just Act 250 changes. It also includes broad reforms to the state’s designation incentives program, a new tax on second-home buyers, funding for eviction prevention programs, flood disclosure requirements for home sellers and landlords, and more.

Editor’s note: This story, by Report for America corps member Carly Berlin, was produced through a partnership between VTDigger and Vermont Public.